Thor Mining (ASX: THR, AIM: THR) is a minerals exploration and development company focused on gold and base metals exploration, as well as progressing towards development of the Molyhil Tungsten and Molybdenum Project in the Northern Territory of Australia.
Thor Mining improves economics of Molyhil with 12% increase in tungsten recovery
Thor Mining’s Molyhil tungsten and molybdenum project has become substantially more attractive to potential offtake partners as well as for potential financiers with a 12% improvement in metallurgical recovery of tungsten and an increase in projected revenues by a further A$7 million per annum over the life of the mine.
Thor Mining (ASX: THR) has successfully increased the projected metallurgical recovery of tungsten for the Molyhil project in the Northern Territory to 75% compared to the previous estimate of 67%.
Executive chairman Mick Billing said the improved recovery estimates should make a substantial difference to the Feasibility Study outcomes.
“Ore in the original mining plan will now be more profitable, while additional material not previously considered economic may now be included, providing for a more profitable and longer life operation,” he said.
“In addition, these improved estimates make Molyhil significantly more attractive to potential offtake partners for tungsten and molybdenum concentrates as well as for potential financing arrangements.”
Analyses by consultants Nagrom & Co, PAH Australia and Proteus EPCM Engineers have concluded that tungsten recovery at Molyhil should increase by subjecting tailings from the tungsten gravity extraction process to flotation.
This tailings material will contain 27% of the total tungsten in the system.
Another plus for Molyhil is that 30% of the tungsten in this stream should be recoverable at relatively low cost.
Importantly for the project and for Thor the estimated value of improved tungsten recovery would be about an additional A$900,000 per annum in gross revenue, per each additional 1% of tungsten recovered.
On current estimates, this would add around a further $7 million to the annual revenue stream from Molyhil before additional processing costs.
The initial expected revenue stream from the project’s tungsten sales was estimated at US$360 per metric tonne unit.
The improved recovery would result in a revised cost per metric tonne unit after molybdenum bi-product credits, and prior to incremental extraction costs from this flotation step, of $109 per metric tonne unit.
Next steps at Molyhil
Proteus EPCM Engineers is preparing an optimisation addendum to the previously published capital and operating cost estimates.
The revised costings, along with the updated Molyhil Resource, will be incorporated into the ore reserve and mining plan calculation of the Feasibility Study, with outcomes expected in February.
Billing told Proactive Investors today he was hoping to have the updated Molyhil Resource from 2011 drilling within the next week.
“I am relatively confident we’ll get an upgraded Resource quite soon and I’m also reasonably confident that there will be more tungsten and more molybdenum in that upgraded Resource,” he said.
Offtake Discussions
Billing said Thor has been in discussions with potential offtake partners for a number of months.
“We’ve been in some discussions now for several months with a number of people without actually reaching a conclusion with any of them and to a large extent they will not get concluded until we’ve got a Feasibility Study complete and that’s about a month away,” he said.
Timeline to mining
Following the completion of the Feasibility Study, Thor will need to secure offtake agreements and finance for Molyhil before the company will move to tender for design, construct and EPCM work.
Billing said Thor could be potentially turning the first sod at Molyhil in August this year with a 12 month timeline to development from there.
"So by September 2013 we could well be putting out our first truck load of concentrate," he told Proactive Investors.
Hard work paying off
Thor can expect to see the fruits of its labour with the release of its impending revised Resource at Molyhil.
The result of Thor’s hard work is already beginning to pay off with the substantially improved economics of the project.
The company has been hard at it in 2011, keeping the drills turning in a way that has resulted in an increased proportion of finance getting to its exploration programs.
A research report by a U.K. broker has concluded that the results of this labour will become apparent when the revised Resource is published.
Another U.K. research house has recommended Thor as a buy and placed a 3.9p target price on the company, more than triple its current share price.
