dfs is released!!!, page-2

http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11248958

THOR MINING PLC



MOLYHIL PROJECT (NT)



DEFINITIVE FEASIBILITY STUDY CONFIRMS FINANCIAL RETURNS

AND EARLY CAPITAL PAYBACK POTENTIAL



Dated: 29 June 2012



The Board of Thor Mining Plc ("Thor") (AIM, ASX: THR), is pleased to advise that following completion of the Definitive Feasibility Study (DFS) for the Molyhil tungsten and molybdenum project in Australia's Northern Territory ("Molyhil"), it is confirmed that Molyhil will deliver attractive financial returns as well as the early payback of the capital required for its development.

Highlights

· EBIT returns provide for 21 month payback period

· All equity Net Present Value (NPV) of A$28 million with an Internal Rate of Return (IRR) of 24%, after tax.

· Production cost of A$125/mtu concentrate compared with revenue of A$354/mtu.

· DFS outcomes calculated on 4 year ore reserve

· Substantial upside potential identified on optimisation of pit design parameters to extend mine life.



Next steps

· Negotiate concentrate sales and finance agreements

· Detailed engineering studies.





Molyhil Definitive Feasibility Study (DFS)

Following the publication in May 2012 of an updated open cut ore reserve statement, Thor has completed the necessary mining and production schedules and incorporated the results into a feasibility model, along with previously published parameters (refer attachment "A" ), to produce an attractive feasibility study outcome.

The results of the study show:



· EBIT returns provide for 21 month payback period

· All equity Net Present Value (NPV) of A$28 million at a discount rate of 8% (A$23million @ 10% or A$36 million @ 5%) after tax.

· All equity Internal Rate of Return (IRR) of 24% after tax.

· Production cost of A$125/mtu concentrate (after deduction of molybdenum bi-product credits) compared with revenue of A$354/mtu.

· Mine life of 4 years, derived from the updated open cut ore reserve statement published on 30th May 2012.

· Capital expense of A$70 million.

· Before tax surplus cash of A$62 million after recovering the original investment.



The DFS has been prepared by Thor Mining PLC using data and information supplied by third party consultants for key components, including:

· Resource estimates and open cut ore reserve statement;

· Mine planning;

· Capital and operating costs;

· Metallurgical processes and outcomes;

· Commodity prices and exchange rates;

· Environmental studies



Next steps

The next steps for the Molyhil project involve securing concentrate sales (off-take) agreements and finance for the project development, after which it is planned to commence detailed engineering studies, along with onsite civil works in preparation for mine and process plant construction and development.

The longer term future for Molyhil

The Molyhil mining plan is derived from the open cut ore reserve statement, and therefore the life of the proposed operation in the DFS is of the order of 4 years. Pit optimisation studies by Runge, however, reveal that a relatively modest 7% improvement in economic factors has the potential to increase the reserve and mining life by over 50%. By contrast a 20% deterioration in economic factors shows a modest 13% reduction in mining life and reserve.

The potential beyond the current estimated life may include:

· Extending the open cut operation and/or underground mining to extract more of the 65% of the resource, laterally and at depth, which is not included in the ore reserve.

· Potential production exploration targets, including some recently identified within several kilometres of Molyhil (Figure. 2)

· Potential from an also recently identified, large magnetic target below the known Molyhil resource (Figure. 3) which, if it contains substantial economic mineralisation, could sustain a longer term underground mining operation.



Figure 1: Tungsten prospects (magnetic anomalies) adjacent Molyhil

http://www.rns-pdf.londonstockexchange.com/rns/4599G_-2012-6-29.pdf



Figure 2: Modelled magnetic target beneath Molyhil resource

http://www.rns-pdf.londonstockexchange.com/rns/4599G_1-2012-6-29.pdf

Commenting, Mick Billing, Executive Chairman of Thor Mining said, "We are now approaching the development phase for Molyhil and pleased that the DFS has so clearly defined the economic viability as well as the opportunity for an early payback on the capital required for its development. At the same time, we have identified ways to improve the mining life of Molyhil significantly and identified a large magnetic target below the known Molyhil resource and believe this may sustain a much longer term mining operation"