Thor Explorations Ltd (CVE:THX) reported an updated resource and reserve for its flagship Segilola project in Nigeria, which has improved the asset's economics and sent shares higher.
The project is still on track to pour its first gold in June this year.
READ: Thor Explorations announces encouraging first set of drill results from northern extensions of the Makosa Discovery at its Douta Project, Senegal
Notably, the new probable reserve of 517,800 ounces at 4.02 grams per tonne (g/t) is a 28% increase over the definitive feasibility study issued in March, 2019.
That report two years ago considered an open pit and building a new 625,000 tonnes per annum (tpa) processing plant.
Following further resource definition drilling, design optimisation and positive industry sentiment in the gold price, Thor reviewed the process plant design capacity and optimum pit design, which has resulted in a larger pit design and an increase in production plant capacity to 715,000tpa.
The project's net present value (NPV) was pegged at C$311 million (m) at a 5% discount rate and an internal rate of return (IRR) of 85%.
"We are pleased with the 28% reserve increase at Segilola which has had a materially positive effect on the project economics," said Segun Lawson, the CEO at Thor Explorations in a statement.
"It has been achieved through further upgrade drilling of inferred resource, an increase in the design pit at a similar waste / ore ratio to the DFS and at the fixed unit rate mining costs agreed with our mining contractor.
"This combined with other optimisations including a 14% increase in process plant design capacity has resulted in a significant increase in project value for our shareholders at a competitive forecast all-in sustaining cost of $685/oz."
Shares in Canada ticked up over 9% on the day to C$0.23 each.
---Updates for share price---
Contact the author at giles@proactiveinvestors.com