spring hill

As I mentioned I did some rough figures on mining Spring Hill’s JORC using a lower cut-off grade (which I believe will be out of date following the drilling program).

It’s only rough, and everyone will have their own opinion on various factors of the project - that ultimately can only be confirmed by Thor when they have completed their own study.

Spring Hill

404000 Oz at 0.5g/tonne cut-off grade

Gold Price $1400/Oz

Mining costs $800/Oz

Mine Build/Plant $70 000 000

404000 Oz x $600 = $242 400 000

Surplus cash $172 400 000 before tax (after mine build capital expense of $70 000 000)

4 year mine life

EBIT returns provide less than 14 month payback period

NPV $130714867 before tax, using 8% discount rate

IRR 77.935% before tax

(NPV and IRR calculated with http://www.datadynamica.com/irr.asp)

339000 Oz using a cut-off grade of 0.75g/tonne

Gold price $1400/Oz

Mining cost $800/Oz

Mine Build $70 000 000

339000 x $600 = $203 400 000

Surplus cash $133 400 000

4 year mine life

EBIT returns provide 16.5 month payback period

NPV $98421633 before tax, using 8% discount

IRR 62.129% before tax

(NPV and IRR calculated with http://www.datadynamica.com/irr.asp)

Currency exchange rate $1AUD for $1USD to keep thing simple.

I believe the figures used are fairly conservative and could be more favourable, including gold price, mining costs, mine build/plant and mine life. And of course we would need confirmation that the cut-off grade could be lowered from 1g/tonne (which may be what the current metallurgical tests are trying to prove).
I have not allowed for tax which will bring NPV and IRR down, but even after that, I believe Spring Hill is in a good position leading into the current drilling campaign. The resource is open in a number of directions, there are satellite deposits within the tenements not included in the JORC, and of course the potential of Callie style mineralisation at depth.

Thor will rise again!