Last checked at 1 Nov 2017 07:00
1 November 2017
THOR MINING PLC
("THOR" OR THE "COMPANY")
QUARTERLY REPORT JULY TO SEPTEMBER 2017
Highlights | Outlook for December Quarter 2017 |
TUNGSTEN & MULTI COMMODITIES | |
Pilot Mountain, Nevada USA · Significant tungsten price increase. · Successful drilling campaign. · High grade mineralisation intersected at Good Hope. · Depth extension & confirmation of 2nd zone of mineralisation at Desert Scheelite.
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· Transition from exploration mode to commercialisation activities of scoping, feasibility, and partner engagement.
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Molyhil, NT Australia · Uptick in tungsten price fuels development interest from potential development partners. · Positive results from sorting low grade ore enhances potential to add low grade ore to the mining plan.
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· Review Open Cut Ore Reserve with a view to a subsequent upgrade of the Molyhil Definitive Feasibility Study. |
Copper Kapunda, SA Australia · Execution of agreement to earn equity interest.
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· Mineral resource estimate expected on portion of mineralisation amenable to insitu recovery techniques.
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LITHIUM/OTHER US Lithium Investment · Due diligence activities undertaken
Other opportunities · Due diligence underway in respect of opportunities in Pilbara region (Lithium/Gold) |
· Maintain 25% project interest and assess related Lithium project opportunities.
· Continuing due diligence to identify low cost exposure to Australian Lithium/Gold opportunities in the Pilbara region |
FINANCE
· In July 2017, the Company completed a share placement to sophisticated investors to raise £460,000 before expenses, following approval at a general meeting of shareholders.· In October 2017, the Company announced a share placement to sophisticated investors to raise £565,000 before expenses, including just over £329,000 subject to approval at a general meeting of shareholders, to be scheduled during the December quarter.
Commenting, Mr Mick Billing, Executive Chairman of Thor Mining, said:
"High cost exploration is no longer a key activity for Thor as we move towards accelerated commercialisation of key tungsten and copper projects, as described briefly below."
"At Molyhil, this is likely to include a review of the Open Cut Ore Reserve, and subsequently an upgraded Definitive Feasibility Study as we look for partners and financiers to develop this project."
"At Pilot Mountain the emphasis is likely to be on scoping & pre-feasibility studies, and we are engaging with industry partners to participate in this process."
"At Kapunda we look towards the resource estimate for that portion of the deposit amenable to in-situ recovery techniques, and proof of concept activities which we hope will progressively yield increasing confidence in this exciting project."
PILOT MOUNTAIN TUNGSTEN PROJECT - NEVADA USA (100% Thor)
Thor's Pilot Mountain Project, acquired in 2014, is located approximately 200 kilometres south of the city of Reno and 20 kilometres east of the town of Mina, located on US Highway 95.
The Pilot Mountain Project is comprised of four tungsten deposits: Desert Scheelite, Gunmetal, Garnet and Good Hope. All of these deposits are in close proximity (~three kilometres) to each other and have been subjected to small-scale mining activities at various times during the 20th century.
In December 2014, Thor outlined a proposed exploration and development plan with the objective of upgrading the knowledge and status of the mineralisation of these deposits where historical drilling outlined potentially economic mineralisation.
A full background on the project is available on the Thor Mining website www.thormining.com/projects.
A drill program was completed successfully during the quarter with assays results announced on 6th October 2017.
At Good Hope, a 28-metre-wide zone of copper zinc and tungsten mineralisation has been confirmed beneath shallow alluvial cover.
Better than expected assay results for drill hole 17GHRC-02 mean a potential 70 metre strike extension of the Good Hope lode to the west.
Significant Assays:
· 17GHRC01: 26.6m @ 0.21% WO3, 1.2% Zn, 1.0% Cu from 0.8 metres downhole
· 17GHRC02: 12.2m @ 0.12% WO3 from 57.8m and 3m @ 0.37% WO3 within 8.4m @ 0.59% Cu from 80.8m
At Desert Scheelite drill hole 17DSDD-02 intersected two mineralised zones; the upper intersection represents a new second lode previously identified by geophysical targeting prior to drilling. The new second lode sits approximately 20 metres to the hanging wall (north) of the existing Desert Scheelite lode and may extend the entire strike length of the Desert Scheelite resource.
The lower 17DSDD02 intersection represents a 60 metre down dip extension to the existing Desert Scheelite lode. This down dip extension could occur along the entire length of the resource.
Significant Assays:
· 17DSDD02: 23.3m @ 0.21% WO3 from 198m and 15.2m @0.25% WO3 from 253.3m
MOLYHIL TUNGSTEN PROJECT - NT (100% Thor)
In January 2015, Thor announced an updated feasibility study for its wholly-owned Molyhil tungsten project, demonstrating a project NPV of A$67million (approximately £39million).
A full background on the project is available on the Thor Mining website www.thormining.com/projects.
Subsequent to the end of the quarter (on 30 October 2017) Thor announced substantially improved results from ore sorting compared with prior testwork.
Results from this work have been reviewed internally, and the Board expects that this testwork has the potential to allow a materially increased portion of the Molyhil resource estimate which is economic to recover.
The recent increases in tungsten prices has resulted in the Company being encouraged by potential off-takers and financiers to move toward enhancing feasibility and development. The Company is considering its options, including the potential for joint venture, offtake, or acquisition agreements, should there be sufficient third-party interest.
KAPUNDA COPPER PROJECT - SA (Thor earning 45%)
On 1st August 2018 Thor announced an investment in a newly incorporated private Australian company, Environmental Copper Recovery SA Pty Ltd. ("ECR"), initially via convertible loan notes of up to A$1.8 million, which will be used to fund field test work and feasibility activities at Kapunda over the next 3 years. In turn ECR has entered into an agreement to earn, in two stages, up to 75% of the rights over metals which may be recovered via in-situ recovery ("ISR") contained in the Kapunda deposit from Australian listed company, Terramin Australia Limited ("Terramin" ASX: "TZN").
ECR have advised a staged approach in the evaluation, assessment, and permitting of Kapunda, with an initial milestone being a mineral resource estimate on that portion of the deposit amenable to ISR techniques, expected in the December quarter.
SPRING HILL GOLD PROJECT - NT (ROYALTY ENTITLEMENT)
In February 2017 Thor completed the A$3.5 million sale of its Spring Hill Gold project¹. The sale transaction carries an ongoing residual royalty of:· A$6 per ounce of gold produced from the Spring Hill tenements where the gold produced is sold for up to A$1,500 per ounce; and
· A$14 per ounce of gold produced from the Spring Hill tenements where the gold produced is sold for amounts over A$1,500 per ounce.
Gold is currently trading for approximately A$1,660/oz, and has remained above A$1,500 per ounce since completion of the project sale.
¹Refer ASX and AIM announcement of 29 February 2016
US Lithium Investment
On 14th June 2017, the Company announced the acquisition of a 25% interest in US Lithium Pty Ltd ("USL"), along with an option to acquire the remaining 75% of USL, subject to satisfactory completion of project due diligence.
During the quarter, Thor representatives visited each of the Arizona project sites as part of the due diligence exercise following the acquisition.
While field sampling results did not raise issues of concern, recent positive developments in respect of the Company's core business activities, have influenced the directors to pause in regard to the opportunity with US Lithium and at this point have chosen to not exercise the option to acquire the remainder of US Lithium. This decision also avoids the need to issue a significant number of Thor shares at, 0.9pence, which is now a substantial discount to the current share price.
We also understand from US Lithium, that third party interest has been shown in their business, and by standing aside, we will allow this interest to be developed more proactively.
The directors' intention is to maintain Thor's current interest in USL and assess related strategic Lithium opportunities for the company as they arise.
Other opportunities
The Company has chosen to focus the thrust of its activities and expenditure on work in relation to commercialisation of its principal assets at Pilot Mountain, Molyhil and Kapunda.
Alongside this the Company has also become aware of additional low cost opportunities to provide exposure to the Pilbara region, which has recently seen considerable interest in ground prospective for conglomerate hosted gold; and lithium.
The Company is currently assessing an opportunity in this region and is conducting due diligence activities in this regard. If successful the Company could have exposure to the Pilbara, on a low cost basis, at an extremely important time for the region following the discovery of conglomerate hosted gold and with the need for new Lithium discoveries.
Competent Person's Report
The information in this report that relates to exploration results, and exploration targets, is based on information compiled by Richard Bradey, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Bradey is an employee of Thor Mining PLC. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Richard Bradey consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
+Rule 5.5
Appendix 5B
Mining exploration entity and oil and gas exploration entity quarterly report
Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16
Name of entity | ||
THOR MINING PLC | ||
ABN | Quarter ended ("current quarter") | |
121 117 673 | 30 September 2017 | |
Consolidated statement of cash flows | Current quarter $A'000 | Year to date (3 months)$A'000 | ||
1. | Cash flows from operating activities | 8 | 8 | |
1.1 | Receipts (Spring Hill Royalty) | |||
1.2 | Payments for | (456) | (456) | |
(a) exploration & evaluation | ||||
(b) development | - | - | ||
(c) production | - | - | ||
(d) staff costs | (31) | (31) | ||
(e) administration and corporate costs | (297) | (297) | ||
1.3 | Dividends received (see note 3) | - | - | |
1.4 | Interest received | - | - | |
1.5 | Interest and other costs of finance paid | - | - | |
1.6 | Income taxes paid | - | - | |
1.7 | Research and development refunds | - | - | |
1.8 | Other (provide details if material) | - | - | |
1.9 | Net cash from / (used in) operating activities | (776) | (776) | |
2. | Cash flows from investing activities | (11) | (11) | |
2.1 | Payments to acquire: | |||
(a) property, plant and equipment | ||||
(b) tenements (see item 10) | - | - | ||
(c) investments | (276) | (276) | ||
(d) other non-current assets | - | - | ||
2.2 | Proceeds from the disposal of: | - | - | |
(a) property, plant and equipment | ||||
(b) tenements (see item 10) commission paid on proceeds | - - | - - | ||
(c) investments | - | - | ||
(d) other non-current assets | - | - | ||
2.3 | Cash flows from loans to other entities | - | - | |
2.4 | Dividends received (see note 3) | - | - | |
2.5 | Other (security bonds) | - | - | |
2.6 | Net cash from / (used in) investing activities | (287) | (287) | |
3. | Cash flows from financing activities | 728 | 728 | |
3.1 | Proceeds from issues of shares | |||
3.2 | Proceeds from issue of convertible notes | |||
3.3 | Proceeds from exercise of share options | |||
3.4 | Transaction costs related to issues of shares, convertible notes or options | (31) | (31) | |
3.5 | Proceeds from borrowings | - | - | |
3.6 | Repayment of borrowings (finance lease) | (2) | (2) | |
3.7 | Transaction costs related to loans and borrowings | |||
3.8 | Dividends paid | |||
3.9 | Other | - | - | |
3.10 | Net cash from / (used in) financing activities | 695 | 695 | |
4. | Net increase / (decrease) in cash and cash equivalents for the period | 685 | 685 | |
4.1 | Cash and cash equivalents at beginning of period | |||
4.2 | Net cash from / (used in) operating activities (item 1.9 above) | (776) | (776) | |
4.3 | Net cash from / (used in) investing activities (item 2.6 above) | (287) | (287) | |
4.4 | Net cash from / (used in) financing activities (item 3.10 above) | 695 | 695 | |
4.5 | Effect of movement in exchange rates on cash held | - | - | |
4.6 | Cash and cash equivalents at end of period | 317 | 317 | |
5. | Reconciliation of cash and cash equivalentsat the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts | Current quarter$A'000 | Previous quarter$A'000 |
5.1 | Bank balances | 317 | 685 |
5.2 | Call deposits | ||
5.3 | Bank overdrafts | ||
5.4 | Other (provide details) | ||
5.5 | Cash and cash equivalents at end of quarter (should equal item 4.6 above) | 317 | 685 |
6. | Payments to directors of the entity and their associates | Current quarter$A'000 |
6.1 | Aggregate amount of payments to these parties included in item 1.2 | 101 |
6.2 | Aggregate amount of cash flow from loans to these parties included in item 2.3 | - |
6.3 | Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2 | |
7. | Payments to related entities of the entity and their associates | Current quarter$A'000 |
7.1 | Aggregate amount of payments to these parties included in item 1.2 | - |
7.2 | Aggregate amount of cash flow from loans to these parties included in item 2.3 | - |
7.3 | Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2 | |
8. | Financing facilities availableAdd notes as necessary for an understanding of the position | Total facility amount at quarter end$A'000 | Amount drawn at quarter end$A'000 | |
8.1 | Loan facilities | |||
8.2 | Credit standby arrangements | |||
8.3 | Other (please specify) | 50 | 50 | |
8.4 | Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well. | |||
A Director had previously advanced funds to the Company on an unsecured and interest free basis.
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9. | Estimated cash outflows for next quarter | $A'000 | ||
9.1 | Exploration and evaluation | (338) | ||
9.2 | Development | - | ||
9.3 | Production | - | ||
9.4 | Staff costs | (30) | ||
9.5 | Administration and corporate costs | (216) | ||
9.6 | Other (Acquisition of equity investment) | (100) | ||
9.7 | Total estimated cash outflows | (684) | ||
Cash inflows expected for the next quarter: The Company expects to receive £235,789 on or by 3 November 2017 from a placing announced on the ASX on 23 October 2017. In addition, a second tranche of the placement £329,211 is subject to shareholder approval on 29 November 2017.
10. | Changes in tenements(items 2.1(b) and 2.2(b) above) | Tenement reference and location | Nature of interest | Interest at beginning of quarter | Interest at end of quarter |
10.1 | Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced | ||||
10.2 | Interests in mining tenements and petroleum tenements acquired or increased | EL31443 | Exploration lease | 0% | 100% |
1.1 Compliance statement
1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Sign here: ........ .................................................... Date: .......31 October 2017............
(Company secretary)
Print name: ..Ray Ridge.........................................
Notes
1. The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.
2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.
3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.
Enquiries:
Mick Billing | +61 (8) 7324 1935 | Thor Mining PLC | Executive Chairman |
Ray Ridge | +61 (8) 7324 1935
| Thor Mining PLC | CFO/Company Secretary |
Colin Aaronson/ Daniel Bush/ Richard Tonthat | +44 (0) 207 383 5100
| Grant Thornton UK LLP
| Nominated Adviser |
Elliot Hance | +44 (0) 207382 8300 | Beaufort Securities Limited | Joint Broker |
Nick Emerson / Andy Thacker | +44 (0) 1483 413 500 | SI Capital Ltd | Joint Broker |
Tim Blythe/ Camilla Horsfall | +44 (0) 207 138 3222 | Blytheweigh | Financial PR |
Updates on the Company's activities are regularly posted on Thor's website www.thormining.com, which includes a facility to register to receive these updates by email, and on the Company's twitter page @ThorMining.