TIDMTHR
RNS Number : 2224B
Thor Mining PLC
08 January 2018
8 January 2018
THOR MINING PLC
UPGRADED ORE RESERVE AND EXTED MINELIFE
MOLYHIL TUNGSTEN PROJECT
The Board of Thor Mining Plc ("Thor" or the "Company") (AIM,
ASX: THR), is pleased to provide a positive progress update on the
Company's wholly owned proposed Molyhil tungsten/molybdenum mine in
Australia's Northern Territory ("Molyhil").
In October 2017 the Company announced it had commissioned a
revised Ore Reserve study to draw together the technical data from
various positive work completed since the last report prepared in
2014. This report containing an Open Cut Ore Reserve Statement has
now been successfully completed with positive findings increasing
the overall Ore Reserve and extending the Molyhil mine life.
Significantly also, a new and potentially profitable additional
underground mining option has been identified, in addition to the
original plan for Open Pit mining.
Highlights
-- Open Cut Ore Reserve Statement, classified as probable, of
3.5 million tonnes @ 0.29%WO & 0.12% Mo;
-- Molyhil Open Cut mine life extended by 17% to 7 years;
-- Additionally, significant blocks of the resource, in
indicated and inferred resources category, outside and below the
pit shell have been assessed and, subject to further drilling and
other technical reviews, appear to warrant a subsequent underground
mining operation after Open Pit mining has concluded;
-- The Company is updating capital and operating cost estimates
with an objective of further cost reductions and positively
impacting mining and processing economics;
-- Work undertaken confirms increased project viability and
supports the completion of an upgraded Definitive Feasibility Study
(DFS) expected in the current quarter.
Mick Billing, Executive Chairman, commented:
"The successful completion of the Ore Reserve Study is a very
welcome development for the Molyhil project and the Company.
Extending the life of the project, along with evidence that
additional blocks have the potential for subsequent underground
mining, is a major step forward in the commercialisation potential
of Molyhil"
"Discussions with third parties expressing interest in the
Molyhil opportunity confirmed that an extension of mine life was a
key precursor to more proactive engagement and with the findings
announced today we have moved solidly down that pathway. The fact
that this progress has been achieved in an environment when there
is an industry desire to secure reliable supplies of tungsten
concentrates makes the outcomes announced today all the more
timely."
"After a long development road, the board are delighted with the
progress achieved of late and are focused on achieving the best
commercial outcome for shareholders. As with any project on the
commercialisation pathway, shareholders should note that there is
no guarantee of a successful outcome."
Molyhil Open Cut Ore Reserve Statement
Based upon the Resources Estimate reported to the ASX & AIM
on 30 January 2014, and following a re-estimate of costs and
metallurgical recovery factors, mining consultancy, AVCS Pty Ltd
has issued a statement of Open Cut Ore Reserve for the Molyhil
deposit of 3.5 million tonnes averaging 0.29% WO(3) & 0.12% Mo,
classified as Probable. See Table 1 and Attachment 1.
The improved outcome is largely driven by cost savings and
upgraded test results of pre-concentration of ore using ore sorting
technology, reported on 30 October 2017.
Table 1: Molyhil Open Cut Ore Reserve Statement
Classification Reserve WO(3) Mo
'000 Tonnes Grade Tonnes Grade Tonnes
% %
---------------- ------------ -------- ------- -------- -------
Probable 3,500 0.29 10,200 0.12 4,300
Total 3,500 0.29 10,200 0.12 4,300
---------------- ------------ -------- ------- -------- -------
Notes:
-- Thor Mining PLC holds 100% equity interest in this reserve.
-- Estimate has been rounded to reflect accuracy.
-- All estimates are on a dry tonne basis.
-- The reserve estimate extends to a maximum depth below surface of 185 metres.
-- The statement is derived from the Indicated portion of the
resource estimate only, and the Inferred portion is excluded from
the calculations.
-- The long-term prices used were US$300/mtu for 65% WO(3)
concentrate and US$7.92/lb for Mo concentrate at an exchange rate
of US$0.75 to A$1.00.
-- The WO(3) and Mo ore sort losses used was 1.0% and 6.0%
respectively and the ore sort rock mass rejection rate on average
is 39.3%
-- The WO(3) and Mo Processing Recovery post ore sorting used was 84.5% and 72.1% respectively.
Using this Statement of Open Cut Ore Reserve, AVCS has prepared
a 3 stage mining plan to provide Thor with a detailed schedule for
the current estimated life of the proposed open pit operation,
including tonnes of ore and waste removed and the grade of material
mined and sorted. This will be incorporated into a financial model
along with revised operating cost estimates, and revised capital
cost estimates both currently under review.
It is expected that this process will be completed during the
March quarter of 2018.
Potential for Underground Mining at Molyhil
The study also identified portions of the Indicated and Inferred
resource estimate, remaining outside the revised pit shell, which
appear economic for mechanised underground mining techniques.
Whilst the work required to include this material in any mine
schedule is yet to be done, this represents a significant
opportunity for the project and will be the subject of further
investigation.
Enquiries:
Mick Billing +61 (8) 7324 Thor Mining Executive
1935 PLC Chairman
Ray Ridge +61 (8) 7324 Thor Mining CFO/Company
1935 PLC Secretary
Colin Aaronson/ +44 (0) 207 Grant Thornton Nominated
Richard Tonthat 383 5100 UK LLP Adviser
Nick Emerson +44 (0) 1483 SI Capital Ltd Broker
413 500
Tim Blythe/ Camilla +44 (0) 207 Blytheweigh Financial
Horsfall 138 3222 PR
Updates on the Company's activities are regularly posted on
Thor's website www.thormining.com, which includes a facility to
register to receive these updates by email, and on the Company's
twitter page @ThorMining.
Competent Persons Report
The information in this report that relates to the Ore Reserves
is prepared by Andrew Vidale who is a Member of The Australasian
Institute of Mining and Metallurgy. Andrew Vidale is a full time
employee of AVCS and has sufficient experience relevant to the
style of mineralisation and type of deposit under consideration and
to the activity which he is undertaking to qualify as a Competent
Person as defined in the 2012 Edition of the "Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves" ("The JORC Code 2012 Edition"). Andrew Vidale consents to
the inclusion of material within this report by Thor.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Molyhil - Table 1
Mineral
Resource * The Ore Reserve estimate is based on the Mineral
estimate Resource estimate prepared by Runge Pincock Minarco
for conversion reported in the October to December 2013 quarterly
to Ore report.
Reserves
* The Mineral Resources are reported inclusive of Ore
Reserves.
Site visits
* A site visit has not been conducted by the Competent
Person.
* The Competent Person is satisfied that the 3D
topographic data supplied and descriptions of the
site environment and expected operating conditions
are adequate for the completion of appropriate mine
designs and schedules and for the estimation of Ore
Reserves
Study status
* Thor Mining PLc (Thor) completed and published a
Definitive Feasibility Study (DFS) in June 2012. A
JORC 2004 compliant Ore Reserve was published in May
2012.
* In July 2014 Thor published an updated ore reserve
following the completion of a new mine plan by AVCS.
The 2014 mine planning cycle was underpinned by the
inclusion of an XRT ore sorting pre-concentration
stage in the processing stream and incorporated
revised operating and capital cost estimates and
metal prices.
* This 2017 ore reserve estimate is based on another
mine planning cycle incorporating further
improvements to the ore sorting model and the most
recent operating and capital cost estimates and
projected metal prices.
* Thor are currently reviewing capital cost estimates
and all indications point to a likely reduction,
however, the impact on project NPV and IRR are not
expected to be significant.
Cut-off
parameters * An NSR based cut-off policy has been adopted taking
into consideration:
o WO(3) price
o Mo price
o Processing cost
o Metallurgical recoveries
o Transport cost
o G&A costs
* Royalty to Northern Territory government and private
entities were not included in the calculation of the
NSR
Mining
factors * The Ore Reserve has been estimated from detailed pit
or assumptions designs which were based on a preferred shell chosen
from a range of pit optimisation shells. The pit
optimisation incorporated sensitivity analyses on
mining cost, processing cost, revenue, slope angle
and geo-metallurgical recovery.
* The Ore Reserve estimate assumes conventional truck
and shovel open pit mining practices, X-Ray ore
sorting and conventional flotation and gravity
processing practices.
* Pit design slope parameters were sourced from a
report by Pells Sullivan Meynik; "Molyhil,
Geotechnical Open Pit Slope Design Aug 2012. Overall
slope angles for pit optimisation were adjusted for
the likely impact of ramps - these overall angles
aligned well with final pit designs.
* The resource block model provided by Thor has block
dimensions of 1.25m in the east-west direction x 2.5m
in the north-south direction x 2.5m in elevation.
* A mineable resource model was prepared from the
resource model, the mineable resource model
incorporates estimates for mining loss and dilution,
geo-metallurgical stage recoveries, costs and
revenue.
* The mining model was regularised to a 5m bench height
and a value based ore selectivity analysis assuming a
5m x 5m SMU was carried out to determine ore
boundaries.
* An edge dilution of 0.5m was applied to the ore
boundary.
* The net impact[1] of regularisation, mining dilution
and SMU is:
o 102%recovery of mineralised material
mass
o 101% mass recovery of WO(3) (98% head
grade)
o 99% mass recovery of Mo (97% head grade)
* The ore reserve includes approximately 4% by mass of
inferred and unclassified material as dilution.
* The proposed pit is developed in three stages.
o Stage 1 is approximately 70m deep, has
pit floor dimensions of 140m x 35m and
yields 1.1 Mt of ore.
o Stage 2 mining width is typically 60m
to 100m with a minimum width of 25m. The
final pit is approximately 130m deep, including
a 5m deep "goodbye" cut which narrows to
between 25m and 35m in width. A one way
15m wide ramp is used for the final 20m
of the pit.
o Stage 3 mining width is typically 50m
to 100m with a minimum width of 25m. The
final pit is approximately 230m deep, including
a 5m deep "goodbye" cut which narrows to
between 25m and 40m in width. A one way
15m wide ramp is used for the final 25m
of the pit.
* Metallurgical factors or assumptions * Ore processing will consist of crushing, X-Ray
sorting for pre-concentration, grinding, flotation
and gravity separation. These technologies are
industry standards for the type of deposit.
* Drilling, bulk sampling and metallurgical test work
by Thor has been ongoing since 2005.
* The revised ore sorting model features grade
dependent rock mass and metal reject fractions
averaging:
o 39.3% rock mass rejection
o 1.0% WO(3) loss
o 6.0% Mo loss
* Metallurgical recoveries average:
o 84.5% recovery of WO(3) in mill feed
83.7% of ROM feed
o 72.1% recovery of Mo in mill feed 60.2%
of ROM feed
* Copper is a potential penalty element in the
Molybdenum concentrate. Test work indicates the
copper grade will not exceed the allowable limit in
previous off-take agreements hence no price penalty
has been applied.
* Molybdenum is a potential penalty element in the
Scheelite concentrate. Test work indicates the
molybdenum grade is likely to be above the penalty
threshold. Price penalties are applied in; the
calculation of NSR, the pit optimisation and the
financial model based on estimates from off-take
partners.
Environmental
* Approval for the Mining Management Plan was granted
by the Northern Territory Director of Mining and
Petroleum Authorisations and Evaluations in 2008 but
was let lapse by Thor.
* The Mining Management Plan was re-submitted in June
2012. Thor have been requested to conduct additional
sampling in respect of waste rock characterisation,
and some additional design parameters in respect of
the proposed Tailings Storage Facility. Both works
are in progress.
* Geological data indicates the waste rock is not
likely to be acid producing, however further studies
are currently in progress on waste rock
characterisation or selective placement.
Infrastructure
* Infrastructure for all activities will need to be
installed/constructed before the commencement of
mining.
* Site access from the Plenty Highway will require
upgrading of an existing road for both transport of
construction materials and concentrate shipment.
Agreements are in place with the landholder for use
of this road.
* All available space within the ML's 23825, 24429 &
25721 is used for either site facilities or waste
rock disposal due to the increase in pit size
compared with the 2014 mine plan. Approximately
0.7Mbcm of waste is assumed to be disposed beyond the
northern extend of ML24429 which is within Thor's
exploration lease EL22349.
* Tailings disposal is based on designs proposed by BTM
Solutions in March 2015 in the report titled "Molyhil
Tailings Storage Facility Design Review". The
tailings storage facility comprises two contiguous
cells approximately 12m high located to the east of
the pit primarily within ML24429 but extending to
south into ML25721
* A community assessment of stakeholders was conducted
in 2007. Stakeholders consulted in identifying
opportunities and risks were:
o Central Land Council (CLC)
o Indigenous Coordination Venture
o Indigenous Business and Industry Services
o Alice Springs Town Council
o Mining, Petroleum and Defence Support
Group
o Desert Knowledge Australia
o Centre for Appropriate Technology
o Arltarlpilta Community Government Council
o Jinka/Jervois station
* An agreement is in place with the CLC to provide
indigenous employment opportunities.
Costs
* Full project valuation has been conducted by Thor.
The Competent Person understands that capital costs
have been sourced from suppliers and contractors
during the DFS process and since updated by Thor.
* Operating costs have been based on supplier quotes
and extrapolation by Thor.
* An exchange rate of 0.75 USD/AUD has been used in the
pit optimisation and calculation of the NSR.
* Royalty to Northern Territory government and Central
Land Council have been calculated in the financial
model.
Revenue
factors * NSR calculation and pit optimisation used:
o US$300/mtu for WO(3)
o US$7.92/lb for Mo
* The WO(3) price was determined by discounting the
predicted long term price of US$350/mtu by $50 for
[2]APT.
* The Mo price was determined by discounting the
predicted long term price of [3]$9.00/lb by 12%
refining charge.
Market
assessment * Neither tungsten nor molybdenum have potential
substitutes for their main application and
consumption for both is expected to continue to grow.
Molybdenum is often a secondary product from Cu or
Cu/Au mines and production can be readily turned on
or off as demand and price dictates.
* Market predictions for tungsten beyond 2014 are for
demand to exceed supply and price to increase.
* Market predictions for molybdenum beyond 2013 are for
demand to increase with global GDP and prices
increase beyond 2015.
Economic
* Economic inputs such as foreign exchange rates,
royalties, costs, discount rate etc are set by Thor
and have been tested in the project valuation model.
* Project assessment by Thor indicates a very
attractive positive net present value and IRR.
Social
* Consultation has occurred with the relevant
stakeholders, including aboriginal peoples who claim
affinity with the land upon which the plant will be
located.
* Tripartite Deed of Agreement has been executed in
2008 between the NT government, Thor, the Central
Land Council and the Arrapere Group.
* Thor obtained the Aboriginal Areas Protection
Authority Certificate in March 2012.
Classification
* The entire Ore Reserve is classified as Probable.
* Only Indicated Mineral Resources were considered in
the calculation of the NSR for the purposes of pit
optimisation and reserves estimation.
* The Ore Reserve estimate does include minor
quantities of Inferred Resources and unclassified
mineralisation that have resulted from the formation
of an SMU and/or inclusion of edge dilution across
the Indicated Resource block boundary. This
additional material is 4% of the estimated reserve
mass and but makes no contribution to the recovered
WO(3) and Mo.
* No portion of the Probable Ore Reserves have been
derived from Measured Resources - there are no
Mineral Resources of Measured classification.
Audits
or reviews * The Ore Reserves has not been externally audited.
Discussion
of relative * The pit designs and mine schedule on which the Ore
accuracy/ Reserve is based have been prepared to Feasibility
confidence Study level with a corresponding level of confidence.
* The mineralisation at Molyhil comprises two near
vertically dipping iron rich skarn lobes in granite
host rock. The defined ore boundaries are, within
each lobe, continuous and in the order of 50m wide
(east to west) by 100m long (north to south) for the
western lobe and 40m wide (east to west) by 80 m long
(north to south) for the eastern lobe overall.
* Minimum mining width across the ore zones rarely
approaches the assumed SMU limit of 5m and is more
typically greater than 20m.
* The external ore boundary is typically at the contact
between the skarn and the host granites and thus
easily visually identified. The internal waste
boundaries and external boundaries that are within
the skarn will require blast hole sampling and/or a
field XRF for grade control.
* Mining modifying factors, pit designs and schedule
reflect the scale of the intended equipment and
planned operation.
=========================================== =============================================================================
[1] ROM ore reserve compared with in-situ Measured and Indicated
resources at 0.1% combined Wo3+Mo cutoff within the final pit
design.
[2] Reduction for refining to Ammonium Para Tungstate (APT)
which is the most traded form of tungsten.
[3] Allows for refining to Mo.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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