Northland Capital Partners has resumed coverage of Thor Mining PLC (LON:THR) with a ‘buy’ rating.
Northland, one of Thor’s joint brokers, has set a punchy target price of 4.2p; Thor’s shares currently trade at 1.675p, up 8.1% on the day.
READ: Thor Mining's new DFS for Molyhil projects earnings of A$239mln over seven-year life of mine
Northland noted that the definitive feasibility study at Thor’s Molyhill tungsten and molybdenum project in the Northern Territory of Australia demonstrated a post-tax net present value of A$101mln (about £56mln) and an internal rate of return of 59% with a post-tax payback period of fewer than 18 months, assuming an average ammonium paratungstate (APT) price of US$460 per metric ton unit (MTU).
The current market capitalisation of Thor is £10.4mln.
READ: Thor Mining pleased with latest cores from Pilot Mountain tungsten project in Nevada
The mining project developer has also completed a scoping study of Pilot Mountain, which Northland believes returned a post-tax net present value of US$34mln (about £26.5mln) and an internal rate of return of 26% with a post-tax payback period of 24 months, assuming an average APT price of US$410/mtu.
“Assuming Thor secures the required funding in the expected time-frame [for Molyhill], we forecast the company to produce 200,000mtu of tungsten in 2020 from Molyhil, rising to 250,000mtu in 2023 once Pilot Mountain comes on stream,” Northland said.
The broker forecasts Thor will earn revenue of around US$70mln in 2020 and in 2021.
It is bullish on the APT price and forecasts it will continue to rise from its current level of around US$325/mtu to between US$445/mtu and US$530/mtu by 2023.
#RNS #THR @ThorMining is pleased to provide an update confirming the release of a Research Note, initiating coverage on the company by Northland Capital Partners that may be viewed through the following link: #Tungsten #Molybdenum #Copper #Vanadiumhttps://t.co/oreOzusfps pic.twitter.com/bCilyw4gW2
— Thor Mining PLC (@ThorMining) October 29, 2018