regain perspective

10th April 2012 Analyst: Dr. Michael Green
Email: [email protected]
Tel: 0207 562 3370

Thor Mining - Substantially higher tungsten recovery boosts
Molyhil’s economic prospects. Speculative Buy at 2.05p with
a 3.5p target price.

Thor Mining, the Australia focused gold and base
metals explorer, continues to make good progress
towards the Definitive Feasibility Study (DFS) of its
100%-owned Molyhil tungsten and molybdenum project.
The latest news is that new metallurgical testwork has
significantly enhanced the economic prospects of the
project. The completion of this testwork has led to the
tungsten recovery to be estimated at 85%, compared to
the 75% announced in January 2012 and 67% used in
the previous feasibility study. This improvement has
been achieved by adding a flotation step to the tungsten
recovery process after the gravity separation. Each
additional 1% improvement in the recovery rate of
tungsten adds A$900,000 in revenue per annum, so this
improved recovery could have a substantial effect on
the outcome of the DFS.
In addition, there has been a 25% increase in the
resource estimate to 4.7 million tonnes. The overall
tonnage figure is just down to a depth of 220 metres,
with contained tungsten rising by 10% to 13,100 tonnes
tungsten trioxide (WO3) and contained molybdenum
leaping by 46% to 10,400 tonnes MoS2. The key input
parameters into the DFS include: capital cost estimate of A$69 million, operating cost of US$115
per tonne of WO3 and revenue of US$360 per tonne of WO3 sold. Annual throughput of 400,000
tonnes is expected, with tungsten and molybdenum recovery of 85% and 77.8% respectively. What
has become obvious is that the very high near surface tungsten grades provide real confidence
that this project could provide an early payback of project capital. In December 2011, the Northern
Territory’s government confirmed that the environmental regulatory process has been completed
and the next process is for a Mining Management Plan to be prepared for approval.
Key Data
EPIC THR
Share Price 2.05p
Spread 2p - 2.1p
Total no of
Shares 700,853,766
NMS 30,000
Market Cap £14.37 million
12 Month
Range 0.95p - 2.775p
Market AIM
Website www.thormining.com
Sector Mining
Contact
Mick Billing +61 8
7324 1935
In the past, Molyhil has been brought to the point of production, but a collapse in metal prices
during the global economic crisis saw such plans gather dust. The environment is more favourable
now however, with improved tungsten and molybdenum prices, the DFS using a lower capital cost
plant, contract mining and a larger resource model following a successful drilling programme. An
independent metallurgical assessment of the proposed tungsten processing system for Molyhil has
recommended that an additional stage be added in the mineral processing system to improve from
the previous 67% recovery estimate to 85%. By adding a flotation step after the gravity recovery
process allows the extraction of the very fine tungsten particles that do not respond well to gravity
separation methods. This sort of improvement in the recovery of tungsten could lead to projected
revenues at Molyhil improving by something like A$16 million per year over the life of mine. Molyhil
has a clear value in today’s market, which will be demonstrated when the DFS is published. Once
that has been completed, the next stage of activities will involve securing off-take agreements for
the concentrates produced and finance for the development. This process has already started and
the board hopes that these will be secured in time to allow project development to commence in
the second half of 2012.