LONDON (ResourceInvestor.com) -- Thor Mining [AIM:THR] isn’t as well known a proposition as it should be given that the company has a lot going for it, including the strong likelihood of molybdenum-tungsten production in the near term and the recent acquisition of a large portfolio of uranium exploration ground. Shrewd investors might look to take the current temporary period of market-wide weakness as a buying in point.
Thor’s assets are all currently in the Northern Territory of Australia, which is interesting as the state has generally speaking received somewhat less mineral exploration than many other parts of Australia. The company though has an international outlook, and in the future may look to acquire new projects just about anywhere, so long as all the parameters are right.
The company’s near term production asset is the Molyhil project, which recently saw a scoping study successfully completed, and is now under definitive feasibility study. The scoping study outlined an operation processing around 300,000 tonnes of material per annum from an open pit, for an initial period of 4 years. Forecasted cash operating costs were A$80/tonne ($60/tonne) and the estimated capital cost was A$20 million ($15 million).
Thus, Molyhil is expected to be viable even at well below at today’s product prices, even without considering the project’s expansion potential. The project’s resource presently stands at a JORC compliant 2.4 million tonnes grading 0.80% combined tungsten, as trioxide, and molybdenum, as disulphide, but Thor believes that there is scope to increase the extent of the resource significantly by way of deeper drilling.
The full definitive feasibility study is expected to be finished by the last quarter of this year, and the risk of a negative outcome is low. As a relatively small and uncomplicated project, Molyhil could be in production before the end of 2007, giving Thor the cash flow to fund other endeavours.
Thor also has a molybdenum-tungsten exploration project, and one that is purely about tungsten. The latter, known as Hatches Creek, looks to be the most interesting at this point, and has hosted historic tungsten production. However, the company has a very sizable land position in the Northern Territory, and other projects might emerge in time.
On the uranium side of things, Thor this week announced that it is to acquire around 3,000 square kilometres of Northern Territory exploration ground from Batavia Mining [ASX:BTV], with a number of promising areas identified for investigation once the acquisition is completed.
Thor is a good way of playing uranium not only because the company has such an extensive landholding to appraise, but because the unique risks of uranium exploration are balanced by other assets.
Uranium carries special risks because it is politically sensitive in terms of mine permitting, and because there are few people around with any real experience of successfully searching for it. Neither of these issues is insurmountable, but it helps a company’s risk profile to have alternative projects on board.
Investment Outlook
Thor shares have made little lasting progress since they were listed on AIM midway through last year. However, with a listing on the ASX in Sydney upcoming that is intended to bring in substantial new funding, the definitive feasibility study on Molyhil in progress and the potential for exciting exploration results to be achieved, the shares should be set for an upward re-rating, particularly as new projects may enliven the mix further.
Cheers Jack
also btv strong in Germany last night up 13.33% on good volume
BTV Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
