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Thor Mining PLC: THE INVESTMENT CASE

Thor Mining looks well set to start “turning resources into money”

Thor Mining has a strong pipeline of projects across an attractive range of commodities
Thor Mining looks well set to start “turning resources into money”
INVESTMENT OVERVIEW: THR The Big Picture
Tungsten prices have been on the rise

Thor Mining PLC (LON:THR) is in the enviable position for a junior miner of having removed virtually all exploration risk. And not just across one project, but across three, all with commodities that are currently enjoying a strong pricing run.

“We have three projects, each of which is likely to mined at some stage in the not too distant future,” explains chief executive Mick Billing.

“Of the three deposits we have resource estimates on two.”

The most advanced is the Molyhil tungsten project in Australia’s Northern Territory, which should get financed in the middle of this year, and thereafter move on into construction.

But coming along behind is the Pilot Mountain tungsten project in Nevada, which already boasts a combined resource across two deposits of nearly 12 mln tonnes of mineralised material.

And that resource is likely to be followed by a maiden estimate on the Kapunda copper project in Australia, for which Billing also has high hopes.

In support are an Australian lithium project, and a royalty on an old Thor project called Spring Hill, now being developed by private Australian vehicle PC Gold.

Like all good mining executives Billing is keeping his options open as regards to the future of his leading projects.

“A lot of the risk associated with grass roots projects is now gone,” he says.

“We’re now in the process of turning resources into money. We can do that in one of several ways. We can package our assets up for sale and sell them for quite a few multiples of what we’ve spent to get them to where they are now. Or we can take a development approach to each of Molyhil, Pilot Mountain and Kapunda. The two are not mutually exclusive.”

All that being said, it seems clear that the big news during the first part of the year is likely to relate to Molyhil.

“In the case of Molyhil, all the exploration has been done,” says Billing. “All the metallurgical work has been done. The work we are doing at the moment is an upgrade to the feasibility study. It’s quite intense, but of relatively short duration. And it doesn’t require enormous amounts of money, which is a good thing.”

Once that’s in place, probably around the end of March, Thor will then go out to finance. Billing has been through this process before, so he knows what’s required. Once-upon-a-time, a short mine life at Molyhil had proved a stumbling block. But that mine life has now been pushed out and tungsten prices are much higher. It all makes for a much more welcoming finance market.

And once up and running, Molyhil will be in a position to provide welcome support to Thor’s other advancing projects.

Because at Pilot, metallurgical testwork has already demonstrated that the project can produce saleable scheelite and copper concentrates. Accordingly, Billing is comfortable that Thor will be able to take this project, too, into production. But it will take time.

“There’s a process we have to go through in Nevada,” he says. “You don’t short-cut that.”

With Molyhil  moving forward though, Thor can afford to spend the time doing things right at Pilot.

And Kapunda, is also likely to provide interest along the way.

“A resource estimate for Kapunda should be out shortly,” says Billing. “We will then demonstrate that we can recover via in-situ recovery.”

That will make it one of the few viable in-situ copper projects in the world, and as such it ought to garner significant attention.

It seems likely, too, that investors will increasingly be drawn to Thor on ongoing positive newsflow, since the company is unlikely to dilute any time soon.

“We raised a bit over £500,000 in October,” says Billing.

“And we’ve since had about £1.3 mln come in via the exercising of warrants. That allows us to say to the market that we have sufficient funds to do what we need to do in 2018. We won’t need any additional money to keep us going.”

Of course, if additional opportunities come along, then things might change. And this market is now beginning to hot up.

But for the time being, Thor has plenty to do and is well positioned to get it done. There’s lots of upcoming newsflow, the tungsten price is rising, and copper’s on the move too.

As if to underline all this confidence, major back Metal Tiger (LON:MTR) has just invested a further £300,000 to take its stake up to over 10 per cent.

It’ll be an interesting few months.

 

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