The board of Thor Mining PLC (LON:THR, ASX:THR) has released a questions & answers (Q&A) document covering some of the questions recently received from shareholders.
Q: What impact does the establishment and listing of EnviroCopper Limited have for the cash and funding requirements of Thor Mining?
A: The original cash commitment to be made by Thor for the Kapunda project was A$1.8 million over three years of which the company has expended A$450,000 to date.
Thor needs to spend of A$600,000 to secure 25% of EnviroCopper, of which A$450,000 has already been spent; a further A$400,000 is required to increase the stake to 30%.
Thor said the company's cash commitments in respect of Kapunda have therefore reduced significantly and have given the group exposure to a significantly larger copper play.
Q: What will the asset base of EnviroCopper look like, assuming this goes forward?
A: EnviroCopper would initially have two exciting in situ recovery (ISR) copper projects in South Australia.
Kapunda, with 119,000 tonnes of contained copper metal within an existing ISR amenable JORC-compliant inferred resource and funded through feasibility via Australian Government CRCP grant funding (A$2.85 million) plus Moonta, with sufficient potential scale to become a medium size long term copper producer and an ISR amenable exploration target of between 428,000 and 728,000 tonnes of contained copper.
More projects will potentially emerge in the future, Thor said, but stressed that “the potential scalability of this ISR business model should not be underestimated”.
Q: Copper production using ISR technology is not common. Are there other examples?
A: Excelsior Mining, with a market capitalisation of C$250 million, has the Gunnison project in Arizona USA as the main asset. The project is under construction, fully financed, with the first production scheduled for the fourth quarter of this calendar year.
For further information about ISR Technology, Thor suggested investors should access the EnviroCopper website.
Q: This is relatively significant exposure to copper. What are your views on the copper market in the medium term?
A: This is significant exposure to the global copper market for Thor, but at very low entry cost for the company and its shareholders.
The global copper market is very large, around 23 million tonnes annually. Those who comment with authority all seem to be saying that the market is now growing at a very rapid rate, driven by electric vehicles (which use two to three times as much copper as internal combustion vehicles), and improved living standards across the globe as more and more people in communities, previously acknowledged as third world, achieve capacity to acquire and run the types of electric appliances and infrastructure, which all use copper, and which most of us take for granted.
Undeniably investors are searching for high-value scalable copper opportunities and the company believes the shareholders of Thor have one through its interest in EnviroCopper.
Q: Now the elephant in the room. Can you provide an update on finance and off-take discussions for Molyhil?
A: It would be easier for shareholders if we could provide more detailed updates on progress; however, the nature of these discussions is such that the company has signed confidentiality agreements and as a result, there is little we are allowed to say.
Our quietness publicly should not be confused with a lack of progress, quite the contrary.
As announced last November, Thor has appointed Argent Partners Limited as corporate advisors to assist with completion of off-take and financing arrangements for Molyhil. Together with them, Thor is engaging with a number of parties who have expressed interest on four main fronts:
Tungsten off-take, preferably with finance attached
Molybdenum off-take, preferably with finance attached
Standard project-level debt arrangements.
The eventual outcome may be a mix of several of the above, and Thor and its corporate advisors continue to work very hard to achieve the best possible outcome for the company and its shareholders.
It is, however, the case that the first shareholders will hear about real progress is when a transaction is announced by a formal regulatory announcement. Indeed, there may be multiple announcements depending on the type of deal structure the company adopts.