Tungsten-focused Thor Mining moves diversified portfolio up value curve as commodity prices rally

VANCOUVER (miningweekly.com) – Australian junior Thor Mining is pushing ahead with its diversified portfolio of tungsten/copper/lithium projects in Australia and the US, in the hope of capitalising on rising metals prices.

The Sydney-based explorer and project developer, which has equity listings on the ASX and LSE’s Aim, holds in its portfolio the Molyhil advanced tungsten/molybdenum project that is poised for development, in Australia’s Northern Territory; a growing tungsten resource at Pilot Mountain, in Nevada; the Kapunda copper development project, in Southern Australia; and the Big Sandy lithium exploration project, in Nevada.

“Tungsten prices have already climbed about 64% since the start of the year, driven up as China, the dominant tungsten producer, tries to clean up the industry,” executive chairperson and CEO Mick Billing told Mining Weekly Online in an interview.

“While tungsten trades far below the $500/metric tonne unit (MTU) record set in 2011, analysts expect the price to settle north of $300/mtu in the medium term,” Billing advised, noting that another update to the 2015 feasibility study could dramatically reduce capital expenditures and incorporate several cost-saving opportunities.

The 2015 upgraded feasibility study into the Molyhil project estimated that a capital injection of A$70-million would be required to allow for the development of a mine producing 2 000 t/y of tungsten and 1 200 t/y of molybdenum, with a mine life of six years.

“We believe it’s shovel ready, it has an attractive reserve base and has all approvals in place. We are just waiting for the tungsten price and financing to proceed with construction, which is expected to take about 12 months,” Billing stated.

Billing, which holds about 6.66% of the company, said Thor is also making good progress at the Pilot Mountain project, in Nevada, which it acquired in 2014. The project comprises several deposits within a radius of 3 km.

Billing pointed out that the company had earlier this month completed drilling at Pilot Mountain, extending mineralisation a further 60 m down dip at the Desert Scheelite deposit.

Detailed logging of the drill core is now complete and samples have been submitted for laboratory assay.

Thor had in May reported a 55% increase in the tungsten resource at its Pilot Mountain. Thor reported that a maiden resource of 1.83-million tonnes, at an average grade of 0.36% tungsten trioxide has been declared for the Garnet deposit, while a re-evaluation of the Desert Scheelite deposit resulted in an upgrade to the resource estimate to 9.9-million tonnes, at an average grade of 0.26% tungsten trioxide.

The resource upgrades have increased Pilot Mountain’s total resource estimate to 11.73-million tonnes, grading 0.28% tungsten trioxide.

Billing pointed out that the project’s resource inventory still had considerable growth potential via the GunMetal and Good Hope deposits, as well as more potential upside at both Garnet and Desert Scheelite.

“We still expect to undertake two or more modest exploration campaigns at Pilot Mountain, but it is getting close to the scoping phase. Good Hope poses as a relatively small opencut mine, with reasonable grades and smaller tonnage. It is not a big animal, but a tasty start-up project,” he noted.

While the project would focus on the copper/silver product, a 0.3% zinc component could make for a handy by-product credit, Billing added.

IN SITU COPPER
Meanwhile, Thor had recently joined forces with Terramin Australia to jointly investigate the development of the Kapunda in situ copper deposit, in South Australia, through a joint venture with partner Environmental Copper Recovery (ECR).

Thor invested in ECR, initially through a convertible loan note worth up to A$1.8-million, which would be used to fund field testwork and feasibility activities at Kapunda over the next three years.

In turn, ECR has entered into an agreement with Terramin to earn up to a 75% interest in the metals rights at Kapunda, over two stages.

ECR will earn an initial 50% interest in the project by spending A$2-million on field trials and associated studies, and a further 25% interest by spending a further A$4-million on the project.

Subject to the completion of this expenditure, Terramin will retain a minimum 25% contributing interest, and will retain a 1.5% net smelter royalty on all metals extracted from the joint venture (JV) area.

ECR will spend a minimum of A$300 000 in the first year of the JV, as well as each subsequent year.

Billing said the in situ project has completed exploration and the team is currently working on an updated mineral resource estimate, which is expected to be published before year-end.

The London Metals Exchange cash price for copper settled at $6 405/t on Friday, while analysts are forecasting a price of $8 000/t within two years.

LITHIUM EVALUATION
In June, Thor expanded its commodity project portfolio in the lithium sector, in North America, through a $75 000 acquisition of a 25% stake in private Australian company US Lithium (USL), which is held by Aim-listed Pembridge Resources.

US Lithium holds interests in projects in Arizona and New Mexico.

Thor has also entered into an agreement which gives it the option to acquire a further 75% of USL and would further provide A$50 000 to USL to cover operational costs during the next three months.

Analysts at research firm Morningstar expect lithium demand to rise 16% a year from 175 000 t in 2015 to 775 000 t by 2025 - the fastest increase of any significant commodity over the past century.

"The lithium projects are well positioned geographically and offer, we believe, significant upside value potential should the work on the ground continue to demonstrate the type of success achieved to date,” Billing stated.