Q&A with Mick Billing, Chairman Thor Mining plc (LON:ASX: THR)


Share Talk took the opportunity to ask Mick Billing, Chairman of Thor Mining a few questions about the company. ln this in-depth Q&A, he answers questions that investors, the current shareholder may find beneficial to gain a better understanding of Thor Mining.


Since late July Thor has released updates on its three projects falling 35% over the period from late July to date.  How do you feel about the situation?

As Chairman I have a responsibility for shareholders and their holdings, including mine as I hold around 5% of the Company.  I take that responsibility to heart and am very disappointed that our share price has fallen over the summer when we have released key updates for Kapunda, then Molyhil and finally Pilot Mountain.

While we must always look towards the longer term, we cannot just ignore short term share price movements.  If people put money into Thor, alongside my own holding, I want them to do well, especially when we release some of the best news in the Company’s recent history.

But it is what it, is and now we must work to restore our share price and make the market reflect the work we have done over 2018 which of course has been the product of work over many years in the Company.


Thor has received some criticism, which seems largely linked to delays in the delivery of the Definitive Feasibility Study for Molyhil and the Scoping Study for Pilot Mountain and inevitably linked to the share price fall. Is that criticism fair?

Yes and no.

The market does not like delays in reporting and that hurt the share price and confidence. The reality is that each key project had factors that added considerably to the inherent value and required additional time to deliver.  Having said that, we were not able to meet the timeframes we suggested to the market, and I must take responsibility for that.

For Kapunda, alongside the completion of significant laboratory test work which delivered extremely positive up to 78% copper extraction, the team were heavily engaged in securing a substantial Australian government project grant of A$2.8 million.  This funding should go a very long way towards funding the project feasibility studies!

At Molyhil the work undertaken in recent years lead to an extensive reworking of the Definitive Feasibility Study involving multiple consultants and delivering an NPV for the project far higher than that previously calculated in 2015.

And for Pilot Mountain, a project that we initially thought may only have a few years open pit mine life before transition to underground mining has shown a potential 12 year open pit mine life from one deposit (Desert Scheelite), with further potential from Garnet and the other deposits already identified.

Within Thor we are delighted at what has been achieved in terms of the technical and operational progress, and the reports we have delivered to the market. That said shareholders need to see the share price of the Company make progress that marries with the increasing value of their interests as demonstrated by the announcements we have made or will make.

Thor is listed on the Australian and UK markets.  The environment for resource companies on both markets has been undeniably poor, and the same is true for resource companies in Canada.  The resource business is acutely cyclical and experiences swings to an extent that few other sectors encounter. We have to live with and manage within that environment and cyclicity.


Did the Molyhil DFS meet your expectations?

Yes and more. However, what really excites me is that there is a lot more upside to come for Molyhil.

Molyhil is a tungsten, molybdenum project in the Northern Territory, Australia.  While it is a long way from any infrastructure, the high grade nature of the deposit drives very low cost of production.

We have seen a considerable NPV increase over the last DFS produced in 2015 and now have an NPV at A$101million or around £56million.

The project is mine construction ready with fully updated DFS and approvals, subject to submission of an acceptable Mining Management Plan, and finalisation of project level mine construction financing.  It is also in a safe jurisdiction in Australia where security of tenure and the ability to take mine projects forward is clearly established.

The project capex is modest for this type of project at US$43million and the payback less than 18 months.  And importantly the project IRR at 59% is very impressive.

What’s also very positive is that the above is in respect of only the open pit operation at Molyhil and does not account for what we believe will be a considerable additional mine life from underground mining potential at Molyhil or the potential satellite tungsten at nearby Bonya where we have recently announced an acquisition of an interest in tenements there.

In summary Molyhil is very advanced and increasingly exciting and feedback our discussions with third parties interested in the project that is certainly the case.


Why is Kapunda so compelling for Thor and its shareholders?

The Kapunda project is in South Australia, just an hour’s drive from the Thor office and is copper and potentially gold focused.

Kapunda is, in our view, a potential hidden gem because the technology of In-Situ Recovery which is being analysed at Kapunda could have applications across multiple stranded assets and perform a unique role of metal extraction whilst also improving the environment by removing potentially unsafe dissolved metal from the local groundwater.

Kapunda itself has 119,000 tonnes of in-situ copper as published in our February 2018 JORC compliant resource statement.  That’s at 0.25% copper with a core of 91,200 tonnes at 0.32% copper. And that’s the thing, investors may look at the grade and think that’s low, which they might be for traditional mining techniques, but we are talking about in situ recovery, which is amazingly cost competitive compared with digging the deposit out of the ground, and is a method where grades of the level at Kapunda are ideal for the process.

The project and the process under review has been supported by a A$2.8million grant from the Australian government which is an immensely important ratification of the project and its potential.  We see the Kapunda project as a test case which if successful could be applied to multiple other similar opportunities and it could therefore be a very strong growth element to our business.

With Enviro Copper our partners we are very excited about Kapunda and what it could lead to for both our companies.


Pilot Mountain seems to be a significant tungsten deposit, based on your JORC compliant resource.  Can you tell us about your Scoping Study there and what the outcome of that work is?

Pilot Mountain is a great project for Thor Mining and progression to a completed Scoping Study is a major milestone.

Its rare that you find the stars align in the resource sector but for us and our shareholders it seems to be happening at Pilot Mountain. 

The project is in Nevada, US and is tungsten, copper & silver focused and comes just at the time when the US have designated tungsten as a critical mineral and where homeland tungsten supplies will be highly sought after in the years ahead.

In May 2017 we published an updated JORC compliant resource showing 32,720 tonnes of in-situ mineralisation with approximately 69% in the indicated category. Given the tungsten price has been around $30,000 a tonne recently that represents nearly US$1 billion of tungsten metal in the ground, and additional value for copper and silver.  Of course the in situ value is not the value of the project but it helps to demonstrate the scale of project at Pilot Mountain.

What was of particular interest at the project was that the work of the advisors demonstrated that what we originally thought may be a short open pit life at the Desert Scheelite deposit (perhaps 5 – 7 years) turned into 12 year open pit life, meaning the higher cost underground mining would not have to commence for a long period of time.  Moreover, we have open pit potential at other deposits nearby and further to that, in the future, underground mining potential.

From a financial perspective the study gave some preliminary data.  As with all Scoping Studies this data has to be carefully treated as this is an early stage study (as per the cautionary statements on our September 2018 announcement – which are now the norm for companies releasing Scoping Studies in Australia).  The study showed capex for mine construction of between US$25 million and US$35million, plus pre-tax profit from initial open pit operations ranging from a base case of $125 million, up to $317 million with improved scheelite recovery, reduced mining costs at greater throughput volumes and potential inclusion of the Garnet deposit mine production.

The full announcement was released on 7 September 2018 and is available on our website.  Needless to say we are delighted with progress to date and it is a privilege to hold 100% of what we consider to be a strategic tungsten, copper & silver project in Nevada state, which is very supportive of exploration and mining companies.


How are the underlying commodities trading where you have an interest?

Thor is fortunate in that the pricing of tungsten and molybdenum have demonstrated greater resilience to downward price movement in recent times which is reflective of the supply/demand balance in the markets.

The price of copper, the third important commodity for our projects, has fared less well. However most reasonable commentators look to the future with a good degree of confidence in the expectation that copper will be in demand and the subject of robust pricing in the future. In essence we believe we are in the right commodities, at the right time.


You have talked about commercialising your key business interests. What in reality does this mean and how progressed are you with this activity?

The board believes that commercial development of Thor’s strategic assets from this point is best achieved through project level finance.  For this purpose project level debt/equity, joint venture offtake and asset finance are the principle areas under discussion at present.

There can be an expectation that commercial partners can be sourced quickly and easily, if the projects are good enough they will surely attract attention. That, in some senses, is true, and is what we have experienced at Thor Mining with a good deal of attention being paid to our work. The process of translating interest into complex commercial deals can be more challenging and requires the type of engagement that we have been focused on for some time.

The completion of the DFS at Molyhil and the Scoping Study at Pilot Mountain mark key development points for both projects and their commercialisation pathway. They provide a benchmark against which commercial transactions may be structured and a focal point around which partners can accelerate engagement with the Company.

For Molyhil, the project is mine construction ready, subject to finance. For Pilot Mountain further feasibility work must be undertaken so this is earlier stage.   The Pilot Mountain project in production would be a key supplier of the critical metal tungsten into the homeland US market and is the largest size JORC compliant resource in-country, so although earlier stage the project still carries a considerable strategic value and draws interest because of this.

Earlier this year Thor promised a focus on delivering technical progress across its three key projects.  We have now delivered against those milestones, the technical updates and reports necessary to move the Company forward. Project level finance is the next step for a company seeking to put mines into production and that is what we are engaged upon at this moment. 

Whilst our work to bring Molyhil and Pilot Mountain to this critical point is largely done, there will be follow up announcements covering various technical updates (e.g. metallurgical testwork at Pilot Mountain) and corporate developments (e.g. Bonya transfer approvals).

Our shareholders will be advised as soon as we reach points of crystallisation in our commercial discussions which remain highly commercially sensitive and therefore transactions will only be discussed when completed and announced to market via regulatory announcement.

As is normal in today’s world it is my duty to advise you that unless and until a commercial transaction is announced to market there can be no assurance that a commercial agreement can or will be reached.


What is the financial position of the business?

We have stated previously that we are funded well into 2019 and we are happy to be in that position. I have been visiting London this week and my first comment is that we are not raising money, so nobody has any doubts.

The Company have some good strong supporters who have confirmed they would provide finance should we need it in the future and I thank them for that commitment, but right now we don’t need to prevail on them.

Also since the October 2017 financing the Company has been approached multiple times from city institutions offering some quite sizable financings, and although we have always declined those approaches, its nice to know the city are eager to support the Company.

From a business perspective, particularly where we are with advanced assets, finance comes in many forms and that doesn’t just including placings or warrant conversions.  We have the ability to dispose of assets, which we saw recently on a small scale with the disposal of our US Lithium interest but there are always potential disposal avenues for larger interests.  There is an increasing amount of M&A activity in the mining sector and tungsten projects are coming into M&A focus.  We would remiss accepting offers for company assets unless the terms were properly attractive, and at the moment we feel the metals environment is in an acute low, with a considerable upside potential, so timing of disposals would be very important.


Are you focused on the three existing interests or are you willing to add additional projects into the mix?

There is an argument that to provide full diversification for shareholders we should look to bolster further our non-tungsten interests.  We agree with this.

The immense amount of work that has it has taken to produce the Molyhil and Pilot Mountain studies has now reduced considerably freeing some of the Thor team and consultants to consider additional opportunities.

Within recent months we have been presented with multiple new opportunities, generally, copper and gold-focused, although this is not exclusive

Given the currently distressed market conditions, the opportunities available at present are in some cases compelling, and we have now commenced closer engagement utilising a ring-fenced fund of working capital that was set aside for new opportunity due diligence in late 2017.


How do you reach out to new investors to buy shares on market?

That’s a good question and one we are acutely aware needs to be addressed. 

We have a lot of followers of the stock already for which we are grateful.  Many of those investors made very good money recently on the run in the share price from late 2017 into early 2018.  We want to get those investors back into Thor and to do that they must believe we can demonstrate a similar dynamic now.

Given the advanced status of our core projects many investors and shareholders want to see commercial transactions signed and announced to market, and from that point they will feel able to assess the investment proposition in a more precise manner.  This we understand, and at the same time we are buoyed by the current shareholders who have placed their trust in the management team to deliver and drive the business forward effectively.

We will continue our underlying marketing campaigns.  We have increased utilisation of our twitter feed to spread company announcements and relevant sector information and links.  We are now working on the website to improve that as a communications tool (we have needed to do this for some time but the team were so heavily involved on our project reports it was difficult to find the time).

We have engaged a number of new investor relations and publicity support services and they will be kicking in fully into September and the Autumn months.

We are now, with the DFS on Molyhil and Scoping Study report on Pilot Mountain complete, having interesting meetings with a number of new funds and organisations who have expressed interest in the company.  Proper institutional interest and investment in the business would certainly be a target for most junior companies, however until you are in the position of having significant advanced assets (which is where Thor are) it is difficult to attract blue chip attention.

Our message to new potential investors, alongside our shareholders today is that so much risk is taken when the Company is early stage. You must:

  • Find prospective ground and get secure licences and be able to operate your exploration programme;
  • You must be financed to a point where you can put some money into exploration and if you find anything of substance you have to invest far more to bring it to a viable compliant resource level;
  • Then you have to invest in preparatory studies to assess the viability of economic mining.

The real money in mining is made in producing so having assets close to production is a real value trigger.  In Thor’s case our three key projects have already achieved the discovery and have already secured JORC compliant resources.  And within our three projects we have one with full feasibility done and literally ready to mine, one with a Scoping Study complete and one with a substantial government backed grant to assist development and potential application to multiple similar projects in Australia.

Therefore we have a great message to sell and, in our view, a low market valuation and all in a great offer for investors to consider.


Why is Thor a buy for investors looking for new investment opportunities?

As with any investment its stands or falls on its future potential in the eyes of investors today, and in simple terms we all invest to make money. 

In the financial markets and particularly for junior resource shares it depends partly on the sector sentiment and partly on Company delivery against planned operational and strategic objectives. 

Going forward Thor aims to deliver in three areas. 

  • Firstly, to finalise the commercial transactions in respect of Molyhil and Pilot Mountain, that properly reflects the work the Company has undertaken and the value of those interests.
  • Secondly, to continue our work with our partners EnviroCopper to advance the Kapunda Copper in-situ recovery project and to apply this to multiple additional opportunities.
  • Thirdly, to bring into the Company’s portfolio additional precious and base metals interests to enable us to continue to build our business as Molyhil and Pilot Mountain move toward mine development and production.

As an investor in resources myself I understand that many investors are not here for small regular returns that come typically from the larger stocks or main indices.  There is a real desire for the dramatic returns that can come with smaller resource companies.  From low to high (Oct 17 to Feb 18) Thor went up around 5 to 6 times. From that high we have now retraced (at the time of writing) 67%. 

I trust that the turnaround is not too far away and we can deliver returns of the magnitude achieved earlier this year.

Certainly in terms of target pricing on analyst notes published recently, a considerably higher share price for Thor is suggested. We wouldn’t disagree!


We are keen to attract new investors for sure however on a final note, I would like to sincerely thank shareholders of the Company for their support and engagement.  2018 has offered a challenging set of market conditions and it takes great courage to invest in our sector at this time. We trust that courage will be significantly rewarded for shareholders of Thor.



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