The Board of Thor Mining Plc (“Thor” or the “Company”) (AIM, ASX: THR) is pleased to announce results of Scoping Study for the Pilot Mountain tungsten project in Nevada USA.
Scoping Study Parameters – Cautionary Statements
This Scoping Study has been undertaken to determine the potential viability of an open pit and/or underground mining and processing plant operation constructed onsite at the Pilot Mountain Tungsten Project and to form a view of the order of magnitude potential and a basis on which to complete further studies. The Scoping Study has been prepared to an accuracy level of ±35%. The results should not be considered a profit forecast or production forecast.
The Scoping Study is a preliminary technical and economic study of the potential viability of the Pilot Mountain Tungsten Project. In accordance with the ASX Listing Rules, the Company advises it is based on low-level technical and economic assessments that are not sufficient to support the estimation of ore reserves. Further evaluation work including infill drilling, metallurgical testwork, and other appropriate studies are ongoing and they will contribute to our ability to estimate any ore reserves or to provide any assurance of an economic development case. This study does not warrant that reserves will be reported.
The total production target for Desert Scheelite is based on Indicated resource with minor quantities of Inferred mineralisation and unclassified mineralisation, while that for Garnet is based upon inferred resources. The Company has concluded that it has reasonable grounds for disclosing a production target.
The Scoping Study is based on the material assumptions outlined elsewhere in this announcement. These include assumptions about the availability of funding. While Thor considers all the material assumptions to be based on reasonable grounds, there is no certainty that they will prove to be correct or that the range of outcomes indicated by the Scoping Study will be achieved.
To achieve the range outcomes indicated in the Scoping Study, additional funding will likely be required. Investors should note that there is no certainty that Thor will be able to raise funding when needed. It is also possible that such funding may only be available on terms that dilute or otherwise affect the value of the existing shares in Thor Mining. It is also possible that Thor could pursue other ‘value realisation’ strategies such as sale, partial sale, or joint venture of the Project. If it does, this could materially reduce the Company’s proportionate ownership of the Project.
The Company has concluded it has a reasonable basis for providing the forward-looking statements included in this announcement and believes that it has a reasonable basis to expect it will be able to fund the development of the Project. Given the uncertainties involved, investors should not make any investment decisions based solely on the results of the Scoping Study.
Scoping Study Highlights
· Desert Scheelite operational life of 12 years with open pit mining over 11 years and one additional year to complete processing;
· Total Desert Scheelite forecast open pit production of 7.5 million tonnes;
· Annual throughput of 650,000 tonnes from the Desert Scheelite open pit, producing scheelite concentrates and copper silver concentrates, plus zinc silver concentrates;
· Preliminary analysis also suggests some potential for economic mining and processing from the higher grade Garnet deposit (inferred resource), supplementing production from Desert Scheelite;
· Pre-tax profit expectations from initial open pit operations ranging from US$125m base case from Desert Scheelite, up to US$317m, which includes improved Scheelite recovery, reduced mining costs at greater throughput volumes and the potential inclusion of Garnet mine production;
· Study outcomes support a decision to commence a more detailed Pre-Feasibility Study to progress the project along the development pathway; and
· No current primary tungsten production in USA where tungsten is classified as a “Critical Mineral”
Mick Billing, Executive Chairman of Thor Mining, commented:
“I am delighted to release the results of the Scoping Study for the Pilot Mountain project showing potential for at least a medium term life on one, and potentially two, of the four tungsten deposits at 100% owned Pilot Mountain.”
“Closed circuit metallurgical testwork on Desert Scheelite ore has commenced which will, hopefully, upgrade the results of open circuit work previously conducted, which achieved 72% recovery of scheelite and saleable quality concentrates. The impact of any improvement is outlined below in this report.”
“The Pilot Mountain project hosts four known deposits, and it is anticipated that each of these has potential to contribute further as we continue to explore their potential.”
“With no US domestic production, and tungsten classified by the US Department of the Interior as a Critical Mineral, our objective is to re-start Unites States commercial mining and tungsten concentrate production after a significant break.”
“We look forward to providing regular updates on this project as material developments occur.”
Pilot Mountain Scoping Study
In late 2017, Thor commissioned Andrew Vidale Consulting Services (AVCS) to prepare a Scoping Study for the Pilot Mountain tungsten project in Nevada USA to gain an understanding of the potential viability of the project to sustain mining and processing. The study terms of reference for AVCS were subsequently refined to cover the Desert Scheelite deposit only.
An assessment by US based consultants Practical Mining LLC has indicated possible additional open cut and underground potential from the Garnet deposit nearby.
The results of these studies show:
· A twelve year life of processing ore from open pit operations at Desert Scheelite;
· Contract mining over 11 years to deliver forecast mine production to the proposed processing plant;
· Annual forecast throughput of 650,000 tonnes from Desert Scheelite, generating approximately 1,000 tonnes of scheelite in concentrate per annum;
· Capital Expenditure range of US$30 to US$35 million
· Project payback of 36 months on the base case, reducing to less than 18 if metallurgical testwork, currently under way, is successful in improving recovery to 85% or above.
The Desert Scheelite mining inventory does include minor quantities of Inferred Resources and unclassified mineralisation that have resulted from the formation of a SMU (Selective Mining Unit) and/or inclusion of edge dilution across the Indicated Resource block boundary. There is a low level of geological confidence associated with inferred mineral resources and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that the production target itself will be realised.
Garnet (based on Inferred resources)
· Initial open pit transitioning to small scale underground,
· Supplementary ore feed averaging 120,000tpa;
· Reduction in project payback to less than 18 months
The Garnet deposit resource estimate is categorised as Inferred. There is a low level of geological confidence associated with inferred mineral resources and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that the production target itself will be realised.
The scoping study assumes the simultaneous exploitation of both the Desert Scheelite and Garnet operations. For the purpose of the study, project infrastructure and processing plant requirements have been based on the production estimates of the larger Desert Scheelite deposit with the additional ore feed from Garnet assumed to be supplementary and not requiring plant nor infrastructure expansion, nor significant additional capital expenditure.
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