31 October 2019
THOR MINING PLC
("THOR" OR THE "COMPANY")
QUARTERLY REPORT JULY TO SEPTEMBER 2019
Highlights |
Outlook for December Quarter 2019 |
TUNGSTEN & MULTI COMMODITIES |
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Molyhil, NT Australia · Marketing activities to lock in project finance and off-take agreements for both tungsten and molybdenum concentrates. · Significant upgrade Molyhil Mineral Resource Estimate. · Drilling commences at Bonya. |
· Complete 2nd phase drilling at Bonya, and prepare initial tungsten resource estimate · Continued discussions with potential Molyhil project financiers and off-take partners. · Tungsten price has strengthened by more than 25% since early September. |
Pilot Mountain, Nevada USA · Commenced discussions with various US investors aimed at securing specific investment to progress this project. |
· Continuing discussions with US investors to secure project investment. · Metallurgical process optimisation work. |
COPPER |
Kapunda, SA Australia · Regulatory approval work for field pump testing at Kapunda. Moonta, SA Australia · Mineral Resource Estimate (MRE) on three of the Moonta copper deposits for 114,000 tonnes copper metal. |
· Field pump testing at Kapunda. · Follow-up analysis to include additional drill-hole data in mineral resource estimate. |
GOLD & OTHER COMMODITIES |
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· Negotiations with traditional owner groups to secure grant of other tenements. · Preliminary field activity preparation |
· Secure grant of additional tenements · Initial ground reconnaissance survey over Pilbara tenements. |
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CORPORATE & FINANCE
During the quarter, the board of the Company was strengthened with the appointment of Mr Mark Potter.
Subsequent to the end of the quarter, the Company advised of a two stage placing of capital, to raise, before expenses, UK£510,000 (approximately A$955,000).
Commenting, Mr Mick Billing, Executive Chairman of Thor Mining, said:
"Despite challenging market conditions, particularly for tungsten, we remain confident in the quality of the Molyhil project, and continue to focus on adding to its value through resource upgrades and exploration drilling at Bonya. We look forward to the initial resource estimates at Bonya which we expect late in the current quarter. We believe this will significantly improve the production profile and economics of the Molyhil project, and also increase the overall attractiveness of the project to strategic investors and offtake partners. Discussions with these parties continue."
"In addition, we are pleased to have recently commenced discussions with a number of US investors for investment in the Pilot Mountain project."
"Our ISR copper investments continue to show great promise and have now advanced to initial drill and pump flow test program stage which is expected to commence shortly."
"The directors and management have also initiated a program of cutting non-essential project and corporate expenditure in order to conserve cash resources whilst discussions with strategic and financial investors for Molyhil and Pilot Mountain continue."
TUNGSTEN PROJECTS
Tungsten and Molybdenum Price Trends
Tungsten prices continued a downward slide until early September, then improved rapidly, recovering some of the ground lost in previous months. The price recovery is largely attributed to the acquisition of the FANYA warehouse stocks in China, removing much of the potential market overhang.
At the date of this report, the price of tungsten, per mtu of APT (Ammonium Para Tungstate) was US$227.50/mtu, while the molybdenum price sits at US$10.00/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.
MOLYHIL TUNGSTEN PROJECT - NT (100% Thor)
During the quarter, Thor continued discussions with various potential partners who have expressed interest, in either off-take, joint venture or debt finance arrangements. It is hoped that, on the back of improved tungsten prices, and successful drilling outcomes at the nearby Bonya deposits, 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.
Subsequent to the end of the quarter, a reverse circulation (RC) drilling program of approximately 2,000 metres commenced at Bonya with the objective of generating sufficient assay information for a mineral resource estimate on two of the known tungsten deposits.
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 the second 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 5 metres(m) @ 1.74% WO₃ (tungsten trioxide), including 2m @ 0.81% Mo (molybdenum) from 78m and 7m @ 1.58%WO3 from 88m including 4m @ 0.44%Mo from 88m.
Subsequent to the end of the quarter, the Company reported an updated Mineral resource estimate for the Molyhil deposit comprising Indicated and Inferred Mineral Resources of 4.7 million tonnes at 0.28% WO₃ (Tungsten trioxide), 0.14% Mo (Molybdenum), 0.05% Cu (Copper), and 18.0% Fe (Iron) above a cut-off grade of 0.12% WO3 equivalent.
The revised resource estimate increases contained WO₃ by 1.5% , and contained Mo by 9.3% compared with the previous estimate, and includes copper, which had not previously been reported since 2006.
An update to the Open Cut Ore Reserve, and the Definitive feasibility Study (DFS) has not been commissioned at this stage, however the directors may elect to revisit these in the event that mineral resource estimates for the nearby Bonya deposits, if and when produced, suggest potential for a material upgrade.
Table A: Molyhil Summary JORC (2012) Mineral Resource Estimate - Reported 10 October, 2019
Classification |
'000 Tonnes |
WO3 |
Mo |
Cu |
Fe |
|
Grade % |
Tonnes |
Grade % |
Tonnes |
Grade % |
Tonnes |
Grade % |
Indicated |
3,780 |
0.29 |
11,000 |
0.14 |
5,400 |
0.05 |
1,800 |
18.7 |
Inferred |
930 |
0.25 |
2,300 |
0.15 |
1,400 |
0.04 |
300 |
15.2 |
Total |
4,710 |
0.28 |
13,300 |
0.14 |
6,800 |
0.05 |
2,200 |
18.0 |
Notes:
· Thor Mining PLC holds 100% equity interest in this project.
· The Mineral Resource is reported at 0.12% WO3 equivalent cut-off and above 200mRL only on a dry, in-situ basis
· The Company is not aware of any information or data which would materially affect the Mineral Resource, and all assumptions and key technical parameters relevant to the previous estimate remain unchanged.
Details of the resource announcement may be accessed via the following link:
https://www.asx.com.au/asxpdf/20191011/pdf/449d2szw7y7hzy.pdf
Bonya (Tungsten, Copper, Vanadium) (40% Thor)
During the June quarter an initial 2,184m reverse circulation (RC) drilling program, funded by Thor (40%) and Arafura Resources (60%) was conducted, producing encouraging tungsten and copper assays from the White Violet and Sarmakand deposits.
Results from this program have been released and can be accessed via the following links:
https://www.asx.com.au/asxpdf/20190624/pdf/44622kz8fk6rr8.pdf
https://www.asx.com.au/asxpdf/20190628/pdf/4466ghkhyhpznt.pdf
Subsequent to the end of the quarter, a follow up RC drilling program of approximately 2,000 metres commenced, targeting an estimation of Mineral Resources for the White Violet and Samarkand deposits. The program is being funded by the JV participants in proportion to their respective equity.
Vanadium
During the quarter, Thor and Arafura Resources, released details of a study outlining the potential of the Jervois Vanadium Project, along with a proposed development plan. The study details can be accessed via the following link:
https://www.asx.com.au/asxpdf/20190703/pdf/446bv386tvk7fh.pdf
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.
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 June 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.
Environmental study parameters are being established with relevant agencies, and Infrastructure studies have also commenced.
The metallurgical testwork on material from the Desert Scheelite deposit announced during the June quarter also identified the previously unexpected presence of gold in the sample. Subsequent check assays for gold have, to date, not conclusively confirmed economic gold mineralisation, and hence the Company requested, despatch of some of this material from the laboratory in China, to be re-assayed in an Australian laboratory facility.
Subsequent to the end of the quarter, two directors attended a mining investment event in New York USA, partly aimed at inviting investment interest in the Pilot Mountain project. A number of contacts have been made & follow up discussions with several are in progress.
KAPUNDA and MOONTA COPPER PROJECTS - SA
Thor holds a 25% equity interest in private Australian company, EnviroCopper Limited ("ECL"), along with rights to acquire a further 5% interest via investment of an additional A$0.4million. In turn ECL 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 (ASX: "TZN"), and rights to 75% of Moonta copper project comprising the northern portion of exploration licence EL5984 held by Andromeda Metals Limited (ASX:ADN).
Information about EnviroCopper Limited and its projects can be found on the EnviroCopper website:
https://www.envirocopper.com.au/
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 June quarter the Company advised of successful gold recovery from Kapunda core, in addition to copper recovery, using a CSIRO developed thiosulphate product, instead of, the more normal, cyanide.
Field pump tests of the flow of fluids through the deposit for successful ISR activities have recently been approved by the South Australian authorities, and this drilling program, and pumping testwork, is expected to commence during November 2019.
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
During the quarter the Company advised that Enviro Copper Limited, on behalf of Environmental Metals Recovery, had completed a Mineral Resource Estimate (MRE) on several of the deposits at Moonta, based on substantial historical drilling. The results of this study was an Inferred Resource estimate of 66.1 million tonnes (MT) grading 0.17% copper (Cu), containing 114,000 tonnes of contained copper, at a cutoff grade of 0.05%Cu.
The full details of the resource announcement may be accessed via the following link:
https://www.asx.com.au/asxpdf/20190815/pdf/447hw9dbbkg94b.pdf
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 in the near term.
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.
Subsequent to the end of the quarter, a field reconnaissance program incorporating soil and stream sediment sampling commenced. Details of the program, along with analysis and results will be published shortly.
INVESTMENTS
Thor holds an investment in Hawkstone Mining Limited, an ASX listed company (ASX: HWK) with a 100% Interest in a Lithium project in Arizona, USA.
During the quarter Hawkstone, announced an Indicated and Inferred Mineral Resource Estimate of 32.5 Million Tonnes grading 1,850 parts per million (ppm) Li, or 320,800 tonnes Lithium Carbonate Equivalent, reported above an 800ppm Li cut-off.
Subsequent to the end of the quarter Hawkstone announced the issue of additional vendor shares which results in the issue to Thor of additional equity in Hawkstone, with Thor now holding 15,234,375 ordinary shares in Hawkstone representing approximately 1.87% of the issued capital of Hawkstone.
At the time of writing Hawkstone shares were trading @ A$0.012/share
Information about Hawkstone and its Big Sandy project can be found at Hawkstone's website, http://hawkstonemining.com.au/.
CORPORATE AND FINANCE
During the quarter, the board of Thor was strengthened with the appointment of Mr Mark Potter. Mr Potter is also a director of Metal Tiger PLC, the Company's largest shareholder. We welcome the contribution of Mark to the team.
Subsequent to the end of the quarter, the Company advised of a two stage placing of capital to raise, before expenses, UK£510,000 (approximately A$955,000). The first tranche of the placing is the issue of 113,333,333 ordinary shares in the company, with the second tranche issuing, conditional on shareholder approval at the forthcoming Annual General meeting of shareholders, a further 141,666,667 ordinary shares.
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 |
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
