4th Apr 2006 07:00
Thor Mining PLC04 April 2006 THOR MINING PLC Feasibility Study on Molyhil Project Dated: 4 April 2006 Thor Mining PLC ("Thor") the mineral exploration and development companyfocussed on advancing tungsten and molybdenum projects in the Northern Territoryof Australia today announces the commencement of a definitive feasibility studyon the Molyhil Tungsten and Molybdenum Project (the "Molyhil Project") followingthe completion of a positive Scoping Study.. Highlights • Scoping study on Molyhil Project completed on schedule which confirmed an indicative positive pre tax cash inflow of A$140m over initial 4 years.; • Scoping study was based on an initial 4 year open pit mining operation with an estimated A$20 million capital cost.; • Definitive feasibility study targeted for completion in the December quarter; and • New program of in fill and resource extension drilling to commence at Molyhil in April/May 2006; Scoping study results The scoping study assisted in identifying the priorities for the definitivefeasibility study and the highlights of the outcomes for the Molyhil Projectincluded the following: • 300,000 tonne per annum open pit mining operation for the initial 4 years production; • forecasted cash operating cost of A $80 per tonne; and • estimated capital cost of A $20M. These outcomes were based on assumptions including: • Current concentrate commodity prices which are: Tungsten Ore Min 65% WO3 USD: $240 mtu Molybdenum roasted concentrates (oxide) MoS2 57% USD: $24 per lb • Exchange rate US$ 0.75: A$1.00. Based on the above and other outcomes and assumptions the scoping studyindicates that the Molyhil Project could have a positive pre tax operationalcash flow of up to A$140m over a 4 year mine life. Definitive feasibility study As a result of the completion of the scoping study, the Directors of Thor havedecided to proceed immediately with a definitive feasibility study which istargeted for completion in the December quarter of 2006. This study will be completed by Merit Engineers Pty Ltd, utilising the sameprincipal consultants that have been used for the completed Scoping Study.Several aspects are already underway. As part of this study, additional drilling will be undertaken during the secondquarter 2006. The objectives of this drilling include: - selected deep drilling to test below proposed open pit; - geotechnical holes, for the proposed tailings dam and open pit; - bore-field set up; and - Thring Creek anomaly. The definitive feasibility study is being undertaken to complete further studiesand drilling and do a sensitivity analysis to verify all of the outcomes andassumptions identified during the scoping study. Until the definitivefeasibility study has been completed Thor cannot make any representation orwarranty (express or implied) as to the accuracy, reliability, reasonableness orcompleteness of the scoping study outcomes and assumptions. Scoping study details Following completion of the upgraded Molyhil Project JORC resource estimate, asannounced in January 2006, Thor engaged Merit Engineers Pty Ltd to definecapital and operating costs for the Molyhil Project, initially up to scopingstudy level. Thor also engaged Australian Mining Consultants ("AMC") to prepare the open pitdesign and mine planning for the proposed project development. Metallurgical test work is ongoing at Independent Metallurgical Laboratories ("IML") supervised by Merit, together with Thor's non-executive director, Mr GregDurack, who is a metallurgist by profession. A schedule setting out the terms of reference for both the scoping study and thedefinitive Feasibility study on the Molyhil Project is available. Resources In January 2006, independent geological consultant, Continental ResourceManagement Pty Ltd ("CRM"), completed an updated estimation of the resources atthe Molyhil Project in accordance with 2004 JORC guidelines. This resource was used as the foundation of the scoping study. The Molyhil Project deposit remains open at depth and has been interpreted fromgeophysical data to extend to 400-500 metres vertical depth or at least 250metres below the current resource boundary. There is, therefore, considered tobe significant potential to further increase the Molyhil resource with deeperdrilling. Mining The nature and the physical characteristics of the Molyhil resource allow miningby straightforward open pit methods using conventional equipment and miningtechniques. The scoping study recommends that mining contractors be used forthis phase of production. AMC has completed a proposed mine plan for the project. Metallurgy During 2005 a bulk sample of material from Molyhil was shipped to Perth andprocessed using a pilot-scale plant at Nagrom. This test work program achievedexcellent recoveries of up to 51% WO3 and 78% MoS2. A new test work program commenced in early 2006 designed to simplify theproposed process flow sheet. Metallurgical test work using material extracted from Molyhil has now beenongoing for two months. This test work program is expected to be the longestlead time item in the compilation of the definitive feasibility study. Infrastructure There is currently minimal infrastructure at the Molyhil Project site and theScoping Study has assumed that the following key infrastructure items will needto be constructed: - Camp and communications; - Water supply; - Upgrade of a nearby airfield; and - Upgrade of access roads. Principal consultants The Scoping Study has been completed with the assistance of the followingprincipal consultants: - Merit Engineers Pty Ltd; - Continental Resource Management; - Australian Mining Consultants; and - Independent Metallurgical Laboratories. CRM consents to the inclusion of the information relating to the mineralresources in this announcement in the form and context in which it appears. This press release includes certain statements, estimates and projections withrespect to the anticipated future performance of the Molyhil Project. Thosestatements, estimates or projections are based on assumptions about futureevents and management actions that may not necessarily take place and aresubject to significant uncertainties, many of which are outside the control ofThor. Those assumptions may, or may not, prove correct. No representation ismade as to the accuracy of those statements, estimates or projections. Enquiries: John W Barr +61 418 912 885 Thor Mining PLC Executive ChairmanJohn Simpson 020 7512 0191 ARM Corporate Finance Ltd Nominated AdviserAbigail Singleton 020 7429 6666 Conduit PR Public Relations 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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