I read back and didnt see this up with a price target of 5.1 p or 7.1 AUD was out 2/3. I kind of like this one as it really talks about the gold plays and how they are in play.
Growth Equities & Company Research has initiated coverage of Thor Mining PLC (ASX:THR, LON:THR) with a ‘Speculative Buy’ recommendation with a £0.051 price target price, with the company's shares last trading around £0.023.
In its report, the research agency wrote Thor Mining is advancing two gold projects in Australia, both of which have the serious potential to be multi million ounce plays.
The first one at Spring Hill in the Northern Territory was acquired with a 274,000 gold ounce JORC Resource but the team is seeking a much greater prize at depth where its experts believe there is the chance of Callie-style mineralisation.
This is a big deal as the Callie project, with a 5 million plus ounce gold resource, is the biggest mine in Northern Territory, according to the research company.
The second project lies within the Albany-Fraser Province situated on the edge of the gold producing Yilgarn Province at Dundas in Western Australia.
In the last ten years, investors have woken up to the gold potential of the Albany-Fraser Province following the discovery of the Tropicana gold deposit (5 million plus ounce gold resource).
Dundas is actually located within the general strike extension of the Wiluna-Kalgoorlie-Norseman green stone belt which is deemed to be most gold rich part of the whole Yilgarn province.
According to the research house, the excitement surrounding Dundas is that this greenfield opportunity may actually be within a new mineralised region; as the board believe that Dundas shares the same geological environment as Tropicana.
The similarities are startling as work carried out by Thor last year led to discovery of carbonate soil geochemical anomalies of a similar size and intensity as were found at Tropicana in its early days.
Thor continues to be best known for the 100 percent-owned Molyhil tungsten-molybdenum project which has been brought to the point of the production. It is fully permitted and even had an off-take agreement from a giant Chinese company that has now lapsed.
The definitive feasibility study (DFS) of 2006 put the net present value at A$88 million (£55 million) using base case sales prices for the project over the mine's initial 4-year life of US$20 per pound molybdenum and US$204/mtu for tungsten.
A collapse in metal prices during the global economic crisis saw the plans gather dust. However there has been a recovery and tungsten is already back above the base case level and there is an expectation in the market that molybdenum could hit US21.50 per pound this year.
“The board is reworking the DFS using lower capital cost plant, contract mining and probably a more extensive resource model following a drilling program during the coming month.
Molyhil has a clear value in today's market which does not appear to be reflected in Thor's current lowly market capitalisation,” GE&CR said.
It believes the company offers investors exposure to a wide range of metals with exploration projects for rare earths, uranium, fluorite, nickel and copper alongside the more developed interests in gold, tungsten and molybdenum.
“Over the past twelve months as the gold price has risen, valuations in the sector have become elevated; and by comparison Thor seems to have rather been left behind.
Well it seems strange invoking the names of Callie and Tropicana, when discussing a stock that is capitalised at £11 million, but such is the potential of the company's two gold plays. Our sum-of-the-parts valuation allows us to place a 5.1p target price on the stock.
“We are initiating coverage on the shares with a recommendation of ‘Speculative Buy' at 2.38p with target price of 5.1p,” GE&CR added.
THR Price at posting:
2.8¢ Sentiment: None Disclosure: Held
