How’s the tungsten price doing? Well, it’s better than it was, according to Mick Billing, chief executive of Thor Mining PLC (LON:THR).
Thor’s long had a primary focus on tungsten but in recent years has had to be nimble about it, as prices plunged after the boom of the last decade. Hence, forays into gold, and a project now sold, netting upwards of US$2.3 mln dollars, and hence the company’s flagship project Molyhil, still needs a little bit of a price uptick.
But with that new cash injection Thor is now able to move on a new project in Nevada, acquired in 2014, called Pilot Mountain.
The price tag for Pilot Mountain was A$3 mln, which compares quite nicely to the US$7 mln paid for it back in the 1970s by Union Carbide.
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That, says Billing quite reasonably, is somewhere between US$30 mln and USS$40 mln in today’s money, and goes to show the long-standing potential that the project offers.
But why hasn’t it been developed already?
Quite simply because the Chinese crashed the tungsten market in the late 1970s and it’s been sitting around ever since, the subject of sporadic work when metals prices warranted.
That piecemeal process has now built up something of a critical mass, such that a new round of drilling, which is just getting underway, should be able to move the project along quite substantially.
“Along the way,” says Billing, “Union Carbide drilled the four deposits that are known at Pilot Mountain. We have the records, although we don’t have the core.”
Then in 2012 the previous owner, Blackfire, did a modest drill programme on the target known as Desert Scheelite and was able to produce a resource of 6.7 mln tonnes at 0.3% tungsten trioxide (WO3).
“It’s not a bad resource,” says Billing. “And the last hole intercepted 17.5 metres at 5.7% copper equivalent, which comprised 13.9 metres at 0.89% WO3 from 198 metres, and 17.5 metres 1.80% copper and 2.2% zinc from 196 metres. We’ve wanted to follow up on that for some time.”
Accordingly, as the A$3.5 mln sale of the Spring Hill gold asset has now completed, and the final A$1.5 mln tranche of cash is now in, the drilling can commence.
Billing is pleased at that outcome, since he’s able to undertake further work without recourse to shareholders. As well as the drilling at Desert Scheelite, which has just returned a 51 metre mineralised intercept, work will also be undertaken at the Garnet deposit and probably also at Good Hope and Gun Metal.
And in the event of success there’s every possibility of a positive response in the markets.
“If the drill results match those that were reported in the 1970s data, our geologists should be able quickly to declare a deposit. Our exploration manager has come up with an exploration target and if he’s right we’re talking about a hell of a lot of value. Even at the lower end of the range we’re talking about something sizeable.”
Coming along behind is Thor’s remaining gold project at Dundas in Australia. This is likely to garner the attention of the drills sometime in the middle of this year, but expect plenty of newsflow regarding the tungsten between now and then.