Let just refresh what everyone should know right now.
2006 DFS highlights: - NPV of A$88M - IRR of 111%
2012 DFS highlights: - NPV of A$28M - IRR of 24%
I’ve contacted MB (Chairman of Thor) today to clarify the concerns we have with the variation between the 2006 & 2012 DFS. Many of you that’s been in THOR for long enough would know that the 2006 DFS was completed by the “old” management; hence, the differences in composition in the reports.
MB has acknowledged our concerns & had answered accordingly. The principle differences between the 2006 results and those just published are listed below:
- Tax & Royalties were “IGNORED” in the 2006 NPV & IRR. So if TAX was taken into account, the POST-TAX& ROYALTY NPV would NOT be $88 Million. It would probably be a lot less.
- “Tax & Royalty payments were almost $45 Million for 2012” Mick Billing
- Therefore, if you want to compare Pre-tax & royalty, the 2012 DFS should have a NPV of $73 Million (45+28)
- Molybdenum price used in 2006 was US$25/pound, compared with current levels of around US$13/pound. This is partially, but not completely, offset by the welcome increase in the price of tungsten.
- The exchange rate applicable in the 2006 study was A$1:00 = US$0.73. This rate difference has a significant impact on project revenue.
“We are continuing to work on various aspect of the Molyhil project and have some confidence that the returns will improve, however we believe that it was important that we inform the market of where the returns sit right now.” Mick Billing
To conclude, This 2012 DFS is just the beginning of Molyhil. This much $$ I know is a "definite" amount we can expect (not speculating). It can only grow and get bigger as more upside shows. The current NPV & IRR is only 35% of the KNOWN RESOURCE. There's another 65% to go. In the longer term, Molyhil could extend deeper & expand further/wider(refer to the 2012 DFS Ann for reasons). MB & co. are already looking for ways to improve the outcome and they are confidence that it Molyhil will GROW.
This is the first time I've contacted MB. One IMPORTANT aspect i got out from this experience is that THOR's management is efficient & NOT a "dog" as some of you here mentioned. They promptly replied to my e-mail in a timely manner with insightful information (not just a single line). I have faith in him (MB) & his team. They have NOT let us down as yet (remember: DFS in June as promised).
Even though no sigificant gain in Molyhil (as many of us were anticipating), it is still a GOOD (profitable) project. Springhill is next (in a few weeks). Offtake & Finance could cement Molyhil's future. What more do you want from this Tiny cap company?
I will be around (THR) for a while. The top part are facts & bottom half is just my view. Please DYOR Kiddo
THR Price at posting:
1.6¢ Sentiment: Buy Disclosure: Held
