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Thor Mining gambling on Tungsten with Pilot Mountain project, but has lithium, gold, and copper plays too

Thor has long had a primary focus on tungsten, with the company’s flagship project at Molyhil in Australia’s Northern Territory, but in recent years it has had to be nimble about it, as prices of the metal plunged after the boom of the last decade

Tungsten light bulbs
Thor got a boost in June after it agreed to buy a stake in a US lithium explorer for US$75,000

Nevada might be the state for gambling in the US, but Thor Mining PLC (LON:THR) (ASX:THR) looks to be on to a sure thing with its Pilot Mountain project in the region, particularly with the tungsten price continuing to climb.

Thor today announced positive preliminary results from the first drill hole at the Good Hope deposit at the wholly-owned Nevada project.

WATCH: Thor Mining upbeat on back of first Good Hope drill hole results

The group said the drilling highlights were encountering 1.1% of copper, 1.3% of zinc, and 0.19% of tungsten trioxide at 27.4 metres.

It also noted that there was unexpected mineralisation from the surface followed by 10m of higher tenor mineralisation from 17.5m, broadly confirming expectation based upon historical drilling.

Mick Billing, Thor’s executive chairman commented: "Good grade mineralisation commencing at surface is always very good news, as is the intersection of higher grade material where historical results estimate they should extend.”

READ: Thor Mining reports "very positive” preliminary results from first Good Hope drill hole at Pilot Mountain project

Billing also noted that “tungsten up 29% this year, copper at US$6,500/tonne and Zinc above US$3,000/tonne are also particularly good signs."

Back in March, Billing had said that President Trump's intention to boost spending on infrastructure in the US bodes well for demand for tungsten, “and with no current tungsten mining operations in the country, Pilot Mountain may be well placed to fill part of that demand."

Primary focus on Tungsten, but gold, lithium and copper interests too

Thor has long had a primary focus on tungsten, with the company’s flagship project at Molyhil in Australia’s Northern Territory, but in recent years it has had to be nimble about it, as prices of the metal plunged after the boom of the last decade.

As a result, the AIM-listed group has made forays into gold - via the Spring Hill project in Australia which it finally exited earlier this year, netting upwards of US$2.3mln – and the Dundas project in Western Australia, drilling at which kicked off in June this year.

Thor also got a boost in June after it agreed to buy a stake in a US lithium explorer for US$75,000.

WATCH: Lithium acquisition 'particularly exciting' for Thor Mining

The group purchased a 25% holding in US Lithium Pty Limited (USL), which owns lithium projects in Arizona and New Mexico, from Pembridge Resources using its existing cash reserves. Under the sale and purchase agreement, Thor also has an option to acquire a further 75% of USL.

Lithium is a key ingredient in lithium ion batteries that power billions of smartphones, laptops and electric cars. Lithium demand is expected to rise 16% per year from 175,000 tonnes in 2015 to 775,000 tonnes by 2025, Billing said at the time, citing analysts at Morningstar.

"The acquisition of lithium interests in the US is particularly exciting for Thor,” Billing added.

And earlier this month Thor also unveiled plans to dips a toe into a low-cost copper venture in South Australia, acquiring an interest in the historically mined Kapunda copper deposit.

WATCH: Thor Mining moving at a pace to advance new copper project in South Australia

A newly incorporated private Australian company, Environmental Copper Recovery (ECR), has been formed to explore the deposit, with Thor chipping in with funds of up to up to A$1.8mln, initially via convertible loan notes.

At the start of August, Billing spoke of a “a busy and productive period for the company” as he updated on the group’s quarterly activities, highlighting the Pilot Mountain tungsten project – acquired back in 2014 - as a particular interest.

Although he added: "We are also highly encouraged by our recent site visit and due diligence exercise, which is ongoing, at the Big Sandy lithium project in Nevada."

WATCH: Thor Mining's Mick Billing looking ahead to 'an even busier' second half

Thor raised £460,000 through a placing of 51.1mln shares in June at a price of 0.9p each to accelerate and extend planned drilling at the Pilot Mountain project  and finance explorations work on the Big Sandy project.

Billing subscribed for 3.0mln of the placing shares for £27,000, increasing his holding in the company to 28.3mln shares, representing a 6.7% stake. Non-executive director Paul Johnson also took part, acquiring 5.0mln shares for £45,000 to take his shareholding in Thor to 15.0mln shares, representing a 3.5% stake.

Funding factor a focus

Shares in Thor Mining have remained around that placing price, currently changing hands at 0.95p each, up around 8.5% in the past three months, but still down over 20% in the year-to-date.

Commenting at the end of June, Capital Network analyst Sam Catalano noted that Thor’s cash position was then around A$2mln, but given the heavy drilling spend at Pilot Mountain further financing may be required by the company before the calendar year-end.

However, he added: “We note the company also holds a royalty stream over their recently sold Spring Hill Gold project, and if production were to begin this would obviously offset some of the cash drain.”

Thor’s corporate broker Beaufort Securities has a ‘speculative buy’ rating on the stock, and in its last update on August 11 was looking forward to further positive updates from the Pilot Mountain project.

The company has a lot of spinning parts now, even if Tungsten remains its key focus, and although funding concerns could keep the share price subdued, the attractions and opportunities from lithium, gold, and copper should all offer investors an interesting ride.

Quick facts: Thor Mining PLC

Price: 0.233 GBX

Market: AIM
Market Cap: £2.18 m

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