25th Sep 2007 07:00
Thor Mining PLC25 September 2007 THOR MINING PLC MOLYHIL EXPLORATION UPDATE Dated: 25 September 2007 Thor Mining PLC ("the Company" or "Thor"), AIM, ASX: "THR" the specialist metalscompany focused on advancing tungsten-molybdenum and uranium projects in theNorthern Territory of Australia, today releases an update on its MolyhilMolybdenum-Tungsten Project "Molyhil". Development Highlights • Optimisation studies based on the JORC compliant resource of 3.7 million tonnes at 0.17% MoS2 and 0.34% WO3 indicate a potential mine life of in excess of 5 years at a revised processing rate of 400,000 tpa. • As a result of initial optimisation studies Thor has commissioned a review of the CAPEX estimation completed as part of the DFS with instructions to make use of second-hand equipment purchased in 2006 and to factor in the revised processing rate of 400,000 tpa. • New JORC compliant reserve and results of financial modelling targeted for completion by mid October 2007. • Off-take agreement with a major metals trader expected to be concluded shortly. Thor has short listed potential partners who are now awaiting the final reserve and financial results. • Agreement has been reached with the Central Land Council and traditional owners, a final meeting and signing ceremony is planned for October. • No objections received during the Public Environment Review period, the Mining Management Plan is being prepared and will be submitted in due course. Exploration Highlights • Further exploration targets identified from recently completed IP geophysical survey. • Molyhil deposit itself remains open at depth with potential to increase resources with deeper drilling. • New targets have been defined and it is planned that drilling of these would commence in 2008. Development Summary The Company advises that a new JORC compliant Ore Reserve estimate is currentlybeing prepared for Molyhil based on an updated block model used in initial pitoptimisation studies being completed by Thor's consultants, Peter O'Brien andAssociates. The revised block model is based on the updated resource estimate completed lastmonth of 3.7 million tonnes at 0.51% combined WO3 and MoS2, which represented a55% tonnage increase from the previously announced resource estimate. The metalcontent of global resource totals 8.4 million pounds of molybdenum and 1.3million mtu's of tungsten trioxide, reflecting the application of moreconservative grade estimation parameters. Preliminary optimal pit shells suggest that in excess of 2.0 million tonnes isavailable to a depth of 155m, i.e. approximately 60% of the revised resource isexpected to be amenable to open pit mining, with the revised block modelindicating a significant reduction to the previous indicative strip ratio. Preliminary studies indicated an optimised pit of over 2.0 million tonnes. Thisis based on current assumptions that included a processing rate of 400,000 tpaand current molybdenum and tungsten prices discounted by 12% and 20%respectively. Based on these assumptions Thor believes it can achieve revenue inthe region of $154 per tonne and operating costs of around $80 per tonne. Theseare early estimates and subject to change dependant on completion of the miningreserve and the optimisations currently underway. A review of estimated capital expenditure for Molyhil is underway incorporatingthe second-hand equipment purchased in late 2006. With the additional ore nowavailable, revised estimates are being prepared based on an increased plantcapacity of 400,000 tonnes per annum. Once the new JORC compliant Ore Reserve and financial modelling has beencompleted, the resource set outside of the optimised open pit will be reviewedas part of an underground conceptual study. Thor is continuing negotiations with a number of short listed parties, includinga leading international metals trader, regarding the completion of a suitableoff-take agreement. Agreement has been reached with the Central Land Council and traditional ownerswith a final meeting and signing ceremony planned for October. The signing ofthe agreement deeds is the final step in granting of the three mining leases atMolyhil. All environmental clearances have been given, with no objections received duringthe Public Environment Review period. The Mining Management Plan is beingprepared by K Lindbeck and Associates and will be submitted shortly. This is thefinal hurdle to secure mining approvals. Current prices for molybdenum and tungsten remain high and are predicted toremain at these levels for several years, with metal inventories at all timelows and demand continuing to exceed supply. Exploration Progress An extensive Induced Polarisation ("IP") Geophysical Survey was recentlycompleted at Molyhil, comprising six survey lines at spacings of between 100mand 200m across the strike of the Molyhil pit. This survey has successfullyidentified the Molyhil skarn mineralisation, confirming that IP is an effectiveexploration tool for targeting similar skarns in and around the Molyhil deposit. The completion of this IP survey represents the first stage in increasing theregional exploration effort at Molyhil to target additional deposits. Chargeable responses have been identified south, along strike beyond currentdrilling and 500m to the west of the Molyhil mineralisation. A single traversecompleted 150m north of the existing pit identified a chargeable response 50mbelow natural surface where there is no outcropping skarn identified in thisarea and is clearly a priority target. The Molyhil deposit itself remains open at depth with potential to increaseresources with deeper drilling. A plan to drill these deeper targets will befinalised once results from the underground conceptual study are completed.Drilling of these and regional targets will commence in 2008. Commenting on the new developments, Thor Mining's Chief Executive Officer, MrJohn Young said: "The preliminary pit optimisation result for Molyhil hasconfirmed our view that, although grades have been reduced due to the moreconservative view taken with the revised resource calculation in July, theproject remains robust." "Our focus now is to vigorously pursue off-take and finance arrangements withthe shortlist of interested parties who are awaiting the remodelled financials." JORC Compliance The information in this report that relates to exploration results, mineralresources or ore reserves is based on information compiled by John Young, who isa Member of The Australasian Institute of Mining and Metallurgy. John Young is adirector of Thor Mining PLC. John Young has sufficient experience which isrelevant to the style of mineralisation and type of deposit under considerationand to the activity which he is undertaking to qualify as a Competent Person asdefined in the 2004 Edition of the "Australasian Code for Reporting ofExploration Results, Mineral Resources and Ore Reserves". John Young consentsto the inclusion in the report of the matters based on his information in theform and context in which it appears. Enquiries: John Young + 61 (0)419 954 020 Thor Mining PLC Chief Executive Officer John Simpson 020 7512 0191 ARM Corporate Finance Ltd Nominated Adviser Leesa Peters 020 7429 6600 Conduit PR Limited Public Relations orJos Simson 020 7429 6603 Nicholas Read + 61 (0) 8 9388 1474 Read Corporate Public Relations/Australia Updates on the Company's activities are regularly posted on Thor's websitewww.thormining.com, which includes a facility to register to receive theseupdates by email. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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