Thor Mining PLC (LON:THR) (ASX:THR) has released the following Q&A document which it said reflects some of the questions received from shareholders following the company's recent announcements in respect of the proposed acquisition of uranium & vanadium focussed claims in the USA.
Q: What impact will the acquisition of American Vanadium have for the cash and funding requirements of Thor Mining?
A: The cash commitment for the acquisition of American Vanadium is A$50,000 in cash, plus A$194,000 in shares, including the exclusivity fee, already paid. There are additional vendor payments which will be required on reaching some project milestones, however, these payments are in shares, not cash, and the nature of those milestones are such that if the issue of those additional shares is triggered, they will be based upon significant positive project progress.
The funds we raised in the recent placement, and the funds expected from the forecast sale of our Spring Hill royalty entitlement are expected to be sufficient to meet our envisaged project expenditure for these new assets, and also our copper, gold, tungsten and molybdenum projects for the balance of this calendar year.
Q: What attracted Thor to these assets?
A: There are three particularly positive features of this new initiative for Thor.
(1) The fundamentals for the uranium market are very good right now. Global demand during 2020 is expected to exceed supply in 2020, and importantly the US administration has initiated a program of acquiring a locally sourced stockpile of uranium fuel for its power generation needs of US$150million. Remember the US is a significant consumer of uranium in its nuclear power generation (comprising 20% of total power supply) but produces very little of its fuel for this domestically.
(2) The project claims are in an area of historical high grade production. The best place to locate high grade resources of any commodity is very often adjacent to areas where high grade mining has historically happened.
(3) There is a processing plant close by, which;
a. Has significant spare capacity
b. Has historically acquired and / or toll treated ore from mines in the region for processing and conversion into saleable uranium and vanadium concentrates.
While we do not have an agreement with the operators of this facility, it is our intention to approach them, and if successful the capital cost and regulatory hurdles for development of a simple mining activity, followed by ore haulage to an existing processing facility are significantly reduced.
Q: What are the implications of this acquisition for Thor's other projects?
A: In addition to these new assets, Thor has a diversified portfolio including quite advanced copper, tungsten and molybdenum projects and some early stage gold projects.
(a) Our copper investment in the ISR (in Situ Recovery) projects held by EnviroCopper Limited in South Australia are not impacted. While we have a budget to increase our equity in EnviroCopper by investing a further A$300,000, focused primarily on gold drilling, the bulk of the work to be carried out in the next few months is substantially covered by the research grant from the Australian government. We believe that as the work on these ISR copper projects continues, the value of them will grow significantly.
(b) The Molyhil tungsten / molybdenum project (Northern Territory) is development ready, subject to finance. Our funding requirement for Molyhil and the nearby Bonya deposits is very modest. While market conditions for financing a new tungsten mine could currently be better, we expect this will happen in the medium term, and we are continuing to work towards that.
(c) The Pilbara Gold (Western Australia) exploration project is in its early stages, but has delivered some very promising results already. We expect within the next two to three weeks we will be carrying out a follow-up sampling program to add definition, and hopefully some drill targets will come out of this work. Visible gold in samples along with nickel and chrome in samples deserve follow up and this is scheduled very soon
(d) The Pilot Mountain tungsten project in Nevada USA hosts what we believe is the largest reported tungsten resource in the USA - a country which has defined tungsten as a critical mineral, but has zero domestic production. The development schedule for Pilot Mountain will take some time, and we have made no secret of our wish to find a strategic partner to push this along, and these efforts are continuing.