Gold producers should be doing well with the price of the precious metal within touching distance of its all-time high.
Thor Explorations has had some bumps in the road in the past twelve months, but a share price nudging towards its high for the year suggests the Nigerian-based gold miner is back on track and taking full advantage.
Latest news was confirmation that production from Segilola mine in Nigeria at 85,000 ounces poured met guidance for 2024, albeit at the lower end, and also that Thor had moved into a net cash position.
Earlier in the year, that production target might have been in question after a fly rock issue in July prompted a reduction in the original target to 85-90,000 from 95,000-100,000.
A fourth quarter jump to 24,600oz from 20,100 the previous quarter got it over the line.
Production for the current year is forecast to be between 85-95,000oz at a sustaining cost of US$800-1,000.
Given the gold price is currently US$2,667 an ounce, that is a healthy margin for each ounce.
Segilola was brought on stream with 518,000 oz of reserves and indicated resources of 536,000oz, which Thor is trying to expand through underground drilling and exploration in the surrounding areas.
Talking to Proactive, Segun Lawson, chief executive, said that extending the mine life at Segilola has become a priority given the gold price.
“Every additional ounce of gold we find, or every incremental year of mine life, is hugely value-accretive to our shareholders.
“We’re very encouraged by the results, showing high-grade mineralization up to over 100 meters below the current pit design.
“The initial part of the proof of concept for the drilling programs was to transition to an underground mine at some point.
“However, when we put everything on the table and looked at our initial studies, the gold price was trading way lower than it is today.
“At prevailing gold prices, there is scope to deepen the pit and take that further as an open pit.
“So, our first focus is to extend the open pit mine life, and there will be an inflexion point to transition to an underground mine.”
Another option for Thor is the Douta project in Senegal, where the pre-feasibility study is now expected in the current quarter after being put back again.
Lawson said that after the delays it was now on the 'home stretch' for the Douta PFS and that due to the extended time it has taken it will be "a very detailed" piece of work.
“We’ve had to push it back a couple of times, but it’s looking encouraging. It’s certainly going to be value accretive to us as a company.
“The final steps involve finalising the metallurgical work and engineering design.
“It’s going to be a very detailed PFS, and we hope we’ll be able to fast-track from PFS to DFS.
“It’s certainly a project we’re looking to build as part of our organic portfolio, and on the back of the envelope, it looks like it could run for 10 to 12 years.”
Confidence, however, is now such that Thor is seriously looking further afield for opportunities.
Having bought the Guity project from Endeavour in Cote D’Ivoire last year, Lawson says the company is also looking beyond its traditional West African base.
“We’ve looked at East Africa and Southern Africa as well and see a couple of interesting projects at advanced stages."
Now valued at £120 million at 19p and with no debt, a bumper gold price and Segilola providing a bedrock on which to build, that ambition to expand at Thor is understandable.
Short-term, the catalyst is likely to be the Douta study,
Confirmation that the potential is as good as Lawson suggests will be key, but Thor’s ambitions are growing and that might prove just to be the start of the story.