Thor Mining Continues To Negotiate With Potential Off-Take...

Thor Mining Continues To Negotiate With Potential Off-Take Partners For The Molyhil Tungsten-Moly Project In Northern Territory

By Sally White

Overcoming the obstacles of a slow tungsten market and the lack of firm news as yet from off-take negotiations, Aim and ASX-quoted Thor Mining has recently pulled off yet another fundraising.

The Spring Hill project

The downside is that the addition of another 47.5 million shares to an already substantial quoted equity base takes the number of shares to a grand total of 903 million, which has knocked the share price back again.

However, the latest UK placing raising £332,000 will help progress continue, and not only at the group’s flagship Molyhil tungsten and molybdenum project in Australia’s Northern Territory, but also from its gold projects sites.

Currently key to share price recovery in the market’s view is progress on off-take for Molyhil. Talks have been focused principally on customers in Asia, but not exclusively. Thor needs to go abroad for the off-take agreement, as the Molyhil scheelite concentrate has to be put through an ammonium paratungstate plant, which do not exist in Australia. So, Thor has been talking to companies in Europe, North America and Asia.

Despite the fact that negotiations are taking longer than executive chairman Mick Billing had hoped, he is still “confident” of a positive outcome.

Keeping him cheerful, too, has been news that concentrate and APT prices in China are sneaking up. “That won’t hurt either”, he says. Last financial year the company raised over £2 million and closed the year with just over half a million pounds in cash. In the first quarter of the 2013 financial year, Australian investors were the first port of call and Thor added to its coffers funds from an A$857,000 placing.

But with so much going on cash at the quarter’s end was A$208,000. Then in the second quarter cash came in from a further Australian placing for A$600,000.

With more than a little understatement Mick’s comment now is: “This has been a particularly busy period for us with plenty of action on the exploration front alongside the primary focus of securing off-take and finance for Molyhil. While we cannot guarantee the nature and timing of any agreement, we remain dedicated to the task.”

The latest funding will keep Thor ticking over for a while, but at some stage, when the off-take deal is done, it will need to raise a lot more. Capital costs for Molyhil are likely to be A$70 million, according to the feasibility study.

However, the attraction is a pre-tax surplus over investment which the study puts at A$62 million. The plan is for site development work to commence at Molyhil before the end of this year and for the first production of concentrates to commence early in 2014.Molyhil now has all the necessary paperwork - a completed Definitive Feasibility study and regulatory approvals.


Work on an “on-going enhancement programme” is underway, says Mick, as well as “the reviewing and testing of nearby prospects.” Meanwhile, highly encouraging news from the company’s other two projects – the Northern Territory gold project at Spring Hill and the Dundas gold project, in Western Australia – came in in the latest company update for the quarter to end-September.



At Spring Hill, Thor has been focused on extending mineralisation. Assays from successful drilling into the largest gold-bearing zone have confirmed consistent grades and extensions of known gold mineralisation. The current JORC resource at Spring Hill rings in at 3.6 million tonnes at 2.3 grams per tonne for a contained 274,000 ounces of gold. But a resource re-estimate has been commissioned, due to be finished in the fourth quarter, and there should be scope for a good upgrade.



In addition, a number of new shallow targets close by have been identified using geophysics. The company has now spent enough to secure 51 per cent of the equity. At Dundas, says Mick, Thor has continued with geochemical sampling program and has now secured approval for the next drilling program. The approval process for ground disturbing activities in this area is relatively protracted, says Mick. “However we continue to be optimistic about the potential for discovery of an economic resource”. The work at Dundas is principally exploration for gold, but at the same time there is some potential for nickel.



Thor holds 60 per cent equity in the Dundas project along with rights to increase that equity to 100 per cent. However, the period during which Thor was required to spend a minimum of A$1million to be eligible to increase its staged equity to 80 per cent expired on 30th September 2012, and Thor is now negotiating an extension to that time period with the project vendors. “We hope to have a solution which satisfies both parties quite soon,” says Mick.

Thor shareholders know that Mick’s business model calls for regular tranches of funds, and no doubt there will be another call in the not too far distant future. But then, the pace of progress is a rapid one and prospects for Molyhil continue to look excellent. For now the London share price is around 0.67p, just off the 12-month low point, against a high of 2.55p, waiting on the Molyhil off-take news.




http://minesite.com/news/thor-mining-continues-to-negotiate-with-potential-off-take-partners-for-the-molyhil-tungsten-moly-project-in-northern-territory