QUARTERLY REPORT APRIL TO JUNE 2019

30 July 2019

THOR MINING PLC

("THOR" OR THE "COMPANY")

QUARTERLY REPORT APRIL TO JUNE 2019

Highlights		Outlook for September Quarter 2019
TUNGSTEN & MULTI COMMODITIES
Molyhil, NT Australia ·  Marketing activities to lock in project finance and off-take agreements for both tungsten and molybdenum concentrates. · Metallurgical drill samples produced high grade tungsten assays, plus above expectation molybdenum & copper. ·  Encouraging results from Bonya drill program.		·  Discussions with potential Molyhil project financiers and off-take partners. ·    Inclusion of copper in the Molyhil mineral resource estimate. ·    Follow up Bonya drill program. ·    Initial tungsten resource for Bonya
Pilot Mountain, Nevada USA ·  Successful stage two metallurgical testwork, including gold detected in the process sample.		·    Follow up gold occurrence via re-assaying historical drilling samples. ·    Metallurgical process optimisation work
COPPER
Kapunda, SA Australia ·  Successful laboratory testwork recovered gold from Kapunda drill samples.   Moonta, SA Australia ·    Commissioning of a mineral resource estimate (MRE) for several of the Moonta copper deposits.		·        Field pump testing at Kapunda.       ·    Mineral Resource Estimates for Moonta copper deposits
GOLD & OTHER COMMODITIES
·    March Fly tenement, prospective for uranium, granted. ·     Negotiations with traditional owner groups to secure grant of other tenements.	·    Secure grant of additional tenements · Continue detailed review of tenement package. ·    Preliminary field activities

 

CORPORATE & FINANCE

Cash position remains sound with funds adequate for the 2019 calendar year scheduled field programs.

Additionally, the annual Research & Development has been completed for lodgement with the Australian Taxation Office, with an expected recovery of just over A$200,000 in the September quarter.

 

Commenting, Mr Mick Billing, Executive Chairman of Thor Mining, said:

"Our confidence in securing off-take and finance for Molyhil remains firm, with positive interest from a number of players, whose interests vary from offtake, to joint venture arrangements, to debt instruments.  The Directors acknowledge that this has taken much longer than anticipated, however we are confident of a positive outcome."

"In the meantime we continue to work on initiatives which we believe will enhance the project, including extending project life beyond the initial seven year open cut program, as well as other programs anticipated to enhance commercial outcomes."

"The developments in our ISR copper investments, substantially funded by the Australian Government research and development grant, continue to show great promise and we look to the scheduled drill program during the September quarter."

"We also look forward to assay results from historical Pilot Mountain drill samples which are being tested for gold content."

 

TUNGSTEN PROJECTS

Tungsten and Molybdenum Price Trends

At the date of this report, the price of tungsten, per mtu of APT (Ammonium Para Tungstate) was US$205.00/mtu, while the molybdenum price sits at US$11.80/lb. 

Industry discussion continues to forecast tight supply conditions for tungsten concentrates and downstream products, with dominant supplier, China, enforcing improved environmental standards, and restricting the issue of new mine production licences .  This implies a recovery in tungsten pricing in the near term.  In addition, industry expectations are that molybdenum will be subject to supply constraints for several years, and a number of potential molybdenum off-take partners have indicated a willingness to discuss fixed price purchasing agreements.

MOLYHIL TUNGSTEN PROJECT - NT (100% Thor)

During the quarter, Thor advanced discussions with a number of potential partners who have expressed interest, in either off-take, joint venture or debt finance arrangements.  These discussions continue, and it is hoped that a favourable arrangement can be finalised in the near term.

Adjacent to Molyhil, the Bonya tenements, in which Thor holds a 40% interest, host outcropping tungsten deposits, a copper resource and a vanadium deposit.

During the quarter, a 2,184m drilling program conducted at Bonya tested four of the 13 known tungsten deposits, with very positive assay results from two of these.

A full background on the project is available on the Thor Mining website www.thormining.com/projects.

 

During the quarter also, the Company reported assays results from one of two large diameter diamond drill holes at Molyhil, which were conducted to obtain sufficient material to produce additional scheelite and molybdenum concentrates for potential customers.  Best assay results from the second of these holes was 92.6 metres @ 1.0% WO₃ (tungsten trioxide), 0.16% Mo (molybdenum) and 0.13% Cu (copper) from surface, including 2.2 metres of unmineralised granite from 11.5m. 

Core from the other hole, has since been cut and sampled with assay results awaited.

Recent metallurgical testwork, has demonstrated potential to produce a copper concentrate from the modest levels of copper in the mineralisation, at low cost.  While not all historical drillholes were assayed for copper, many were, and Thor has a database extensively populated with copper assay intersections.  It is expected that the mineral resource estimate will be updated to include copper during the September quarter.  It is premature however, at this stage, to estimate any impact on commercial outcomes at Molyhil until that mineral resource estimate is complete.

Bonya (Tungsten, Copper, Vanadium) (40% Thor)

An initial 2,184m reverse circulation (RC) drilling program, funded by Thor (40%) and Arafura Resources (60%) was conducted during the quarter producing encouraging tungsten and copper assays from the White Violet and Sarmakand deposits.

In June, the joint venture reported laboratory assays from the program (refer to ASX announcements 24 and 26 June 2019). The best results were:

Tungsten highlights from White Violet include;

·      27m @ 0.29% WO₃ from 35m including 16m at 0.31% Cu from 43m and 7m @ 0.2% WO₃ from 67m; White Violet hole 19RC020

·      12m @ 0.67% WO₃ from 46m; 25m @ 0.39% WO₃ from 63m and; 5m @ 0.1%WO₃ from 96m; White Violet hole 19RC021

·      29m @ 0.70% WO₃ from 81m; including 13m at 1.13% WO₃ from 91m; White Violet hole 19RC022

Tungsten highlights from Samarkand include;

·      13m @ 0.48% WO₃ from 19m; Samarkand hole 19RC026

·      8m @ 0.45% WO₃ from 38m; Samarkand hole 19RC028

·      9m @ 0.74% WO₃ from 64 m including 2m @ 0.2% Cu from 69m; Samarkand hole 19RC030

Copper intersections from Samarkand include

·      5m @ 0.36% Cu from 9m including 2m @ 0.23% WO₃; Samarkand hole 19RC029

·      12m @ 0.77% Cu from 22m; Samarkand hole 19RC030

·      7m @ 1.23% Cu from 37m; Samarkand hole 19RC030

Planning is underway for a follow up joint venture drilling program targeting an estimation of Mineral Resources at White Violet and Samarkand. 

 

Vanadium

Subsequent to the end of the quarter (on 3 July 2019), Thor and Arafura Resources, released details of a study outlining the potential of the Jervois Vanadium Project, along with a proposed development plan.

 

PILOT MOUNTAIN TUNGSTEN PROJECT - NEVADA USA (100% Thor)

Thor's Pilot Mountain Project, acquired in 2014, is located approximately 200 kilometres south of the city of Reno and 20 kilometres east of the town of Mina, located on US Highway 95.

The Pilot Mountain Project is comprised of four tungsten deposits: Desert Scheelite, Gunmetal, Garnet and Good Hope.  All of these deposits are in close proximity (~three kilometres) to each other and have been subjected to small-scale mining activities at various times during the 20th century.

During the quarter, the Company released positive results from metallurgical testwork on material from the Desert Scheelite deposit.  The testwork also identified the previously unexpected presence of gold in the sample.

A full background on the project is available on the Thor Mining website www.thormining.com/projects. 

The directors believe Pilot Mountain's resource is substantial on a global scale, and has potential for significant growth, in particular from the discovery in the August 2017 drilling program of an additional parallel zone of scheelite mineralisation at the Desert Scheelite deposit (Figure 6.). 

The directors believe that the Desert Scheelite resource, which outcrops at surface at the western end for more than 400 metres, has potential to develop into a long term open pit mining operation which, when supplemented by higher grade mineralisation from the other deposits at Pilot Mountain, has the potential for a longer term profitable operation.

This significant tungsten resource is strategically located in the USA and tungsten has been confirmed by the US Department of the Interior as a critical mineral in 2018

Locked cycle testwork on material from the Desert Scheelite deposit, was completed during the quarter, resulting in production of a high grade scheelite concentrate grading 68% WO₃ with recovery of 73.6%.  Further work is in progress aimed at improving this recovery.

The testwork also identified for the first time the presence of gold in the sample processed, with assays of 0.29g/t in the initial feed, and 0.34g/t in the flotation tailings.  Follow up assays are currently being conducted on drill samples from the 17 holes drilled at Pilot Mountain since 2011, to confirm these results, and also to assess the  presence of gold elsewhere at Desert Scheelite, and also at the Garnet, and Good Hope deposits.

Environmental study parameters are being established with relevant agencies, and Infrastructure studies have also commenced.

 

KAPUNDA and MOONTA COPPER PROJECTS - SA

Thor is acquiring a 60% interest in private Australian company, Environmental Copper Recovery SA Pty Ltd. ("ECR").  In turn ECR has entered into an agreement to earn, in two stages, up to 75% of the rights over metals which may be recovered via in-situ recovery ("ISR") contained in the Kapunda deposit from Australian listed company, Terramin Australia Limited ("Terramin" ASX: "TZN").

A Memorandum of Understanding (MOU) announced 5 March 2019, subject to a 90 day due diligence period, was executed between Thor Mining, ECR (holding earn-in rights to 75% of that part of the Kapunda Copper project amenable to ISR), and Environmental Metals Recovery Pty Ltd (holding earning rights, subject to due diligence, to 75% of Moonta copper project comprising the northern portion of exploration licence EL5984 held by Andromeda Metals Limited (ASX:ADN), for the merging of the respective interests, and the formation of Enviro Copper Limited, to hold and advance those interests.

Under the MOU, Thor will relinquish its interest in ECR and acquire a 25%, pre-listing, interest in Enviro Copper for total funding of A$0.6million (funds already provided).  Further Thor will hold the right to acquire a further 5% seed capital interest in Enviro Copper Limited for consideration of an additional A$0.4 million.

Kapunda

During 2018, the Australian Government Ministry for Science, Jobs and Innovation announced an offer to ECR for research funding of A$2,851,303, over a 30 month period, for the Kapunda In-Situ Copper and Gold Recovery Trial.

During the quarter the Company advised of successful gold recovery from Kapunda core using a CSIRO developed thiosulphate product, instead of, the more normal, cyanide.

Field pump test are scheduled for the June quarter to test the flow of fluids through the deposit for successful ISR activities, and the appropriate applications have been lodged with the South Australian authorities.

Other near-term activities at Kapunda include continued community liaison in respect of project activities, testwork on historical drill core to determine the optimum extraction agent (lixiviant) most suited to the Kapunda deposit and establishing appropriate parameters for future field trials.

Moonta

On 23 April 2019, the Company advised that Enviro Copper Limited, on behalf of Environmental Metals Recovery, had commissioned a Mineral Resource Estimate (MRE) on several of the deposits at Moonta, based on substantial historical drilling.  The results of this study are expected shortly.

 

GOLD PROJECTS

SPRING HILL GOLD PROJECT - NT (ROYALTY ENTITLEMENT)

In February 2017 Thor completed the A$3.5 million sale of its Spring Hill Gold project¹. The sale transaction carries an ongoing residual royalty of:

·    A$6 per ounce of gold produced from the Spring Hill tenements where the gold produced is sold for up to A$1,500 per ounce; and

·    A$14 per ounce of gold produced from the Spring Hill tenements where the gold produced is sold for amounts over A$1,500 per ounce. 

¹Refer AIM announcement of 26 February 2016 and ASX announcement of 29 February 2016

No royalties were received during the quarter, however the owners of the Spring Hill project have advised that they are progressing mine permitting, and also that the treatment plant for toll processing the ore has been refurbished.  They are hopeful of commencement of operations during the upcoming dry season.

 

OTHER PROJECTS

During the March quarter the Company advised of an agreement to acquire two private Australian companies (Hamersley Metals Pty Ltd, and Pilbara Gold Pty Ltd) with licences and applications in areas prospective for gold and uranium in Western Australia and the Northern Territory.

Two of these tenements have been granted, including the NT March Fly uranium project which was granted during the quarter.  The Company has withdrawn applications for two others following advice of significant opposition from traditional owner groups.  Documentation of draft agreements with traditional owners for site access to allow activities classed as ground disturbing are in progress for other tenement applications.

During the quarter the Company engaged an additional geologist tasked with assessing these opportunities and recommendations for various field  activities are being generated.

 

INVESTMENTS

Thor holds just over 7.4 million ordinary shares in Hawkstone Mining Limited, an ASX listed company (ASX: HWK) with a 100% Interest in a Lithium project in Arizona, USA. Thor shall be allotted a further 7,812,500 ordinary shares in Hawkstone if Hawkstone reports, by September 2021, a mineral resource estimate, on the Big Sandy deposit, of at least 30 million tonnes at a grade of over 2,000ppm Lithium (Li), using a lower cutoff grade of 1,000ppm Li.

At the date of writing, Hawkstone shares traded at A$0.020.

During, and subsequent to the end of the quarter, Hawkstone advised in several announcements of high grade lithium assays from its diamond drilling program.  Hawkstone have also advised that following receipt of assays for the final holes in the program, they will proceed with preparation of a maiden mineral resource announcement in late September 2019.

Information about Hawkstone and its Big Sandy project can be found at Hawkstone's website, http://hawkstonemining.com.au/.

Competent Person's Report

The information in this report that relates to exploration results, and exploration targets, is based on information compiled by Richard Bradey, who is a Member of The Australasian Institute of Mining and Metallurgy.  Mr Bradey is an employee of Thor Mining PLC.  He has sufficient experience which is 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'.  Richard Bradey consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Enquiries:

Mick Billing	+61 (8) 7324 1935	Thor Mining PLC	Executive Chairman
Ray Ridge	+61 (8) 7324 1935	Thor Mining PLC	CFO/Company Secretary
Colin Aaronson/ Richard Tonthat/ Ben Roberts	+44 (0) 207 383 5100	Grant Thornton UK LLP	Nominated Adviser
Nick Emerson Claire Louise Noyce / John Beresford-Peirse	+44 (0) 1483 413 500 +44 (0) 203 764 2341	SI Capital Ltd Hybridan LLP	Joint Broker Joint Broker
Tim Blythe/ Camilla Horsfall	+44 (0) 207 138 3222	Blytheweigh	Financial 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.

 

About Thor Mining PLC

Thor Mining PLC (AIM, ASX: THR) is a resources company quoted on the AIM Market of the London Stock Exchange and on ASX in Australia.

Thor holds 100% of the advanced Molyhil tungsten project in the Northern Territory of Australia, for which an updated feasibility study in August 2018¹ suggested attractive returns.

Adjacent Molyhil, at Bonya, Thor holds a 40% interest in deposits of tungsten, copper, and vanadium, including an Inferred resource for the Bonya copper deposit².

Thor also holds 100% of the Pilot Mountain tungsten project in Nevada USA which has a JORC 2012 Indicated and Inferred Resources Estimate³ on 2 of the 4 known deposits.  The US Department of the Interior has confirmed that tungsten, the primary resource mineral at Pilot Mountain, has been included in the final list of Critical Minerals 2018.

Thor is also acquiring up to a 60% interest Australian copper development company Environmental Copper Recovery SA Pty Ltd, which in turn holds rights to earn up to a 75% interest in the mineral rights and claims over the resource⁴ on the portion of the historic Kapunda copper mine in South Australia recoverable by way of in situ recovery. 

Thor has an interest in Hawkstone Mining Limited, an Australian ASX listed company with a 100% Interest in a Lithium project in Arizona, USA.

Finally, Thor also holds a production royalty entitlement from the Spring Hill Gold project⁵ of:

•  A$6 per ounce of gold produced from the Spring Hill tenements where the gold produced is sold for up to A$1,500 per ounce; and

•  A$14 per ounce of gold produced from the Spring Hill tenements where the gold produced is sold for amounts over A$1,500 per ounce.

Notes

¹ Refer ASX and AIM announcement of 23 August 2018

² Refer ASX and AIM announcement of 26 November 2018

³ Refer AIM announcement of 13 December 2018 and ASX announcement of 14 December 2018

⁴ Refer AIM announcement of 10 February 2016 and ASX announcement of 12 February 2018

⁵ Refer AIM announcement of 26 February 2016 and ASX announcement of 29 February 2016