30th Oct 2007 07:00
Thor Mining PLC30 October 2007 THOR MINING PLC MOLYHIL MINING RESERVE UPDATE Dated: 30th October 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 announces an updated JORC compliantreserve estimate for its 100%-owned Molyhil Tungsten-Molybdenum Project in theNorthern Territory of Australia ("Molyhil") and results of the recentlycommissioned review of the capital cost estimate for Molyhil. HIGHLIGHTS • 98% increase in overall JORC compliant reserve to 2.15 million tonnes. • Proposed processing rate increased to 400,000 tonnes per annum. • Life of mine to extend to over 5 years. • Capital expenditure review completed indicating a 400,000tpa operation can be developed for approximately AUS$63.3 million, including additional owner costs, this has resulted in substantially lower estimated annual operating costs. Reserve Update A revised resource of 3.73 million tonnes at 0.51% combined tungsten (WO3) andmolybdenum (MoS2) was announced in August of this year. The new reserve is basedon only the measured and indicated categories of that revised resource whichtotalled 2.93 million tonnes at combined grade of 0.59% The ore reserve estimate has been established through a series of mineoptimisations and mine designs. A two-staged pit design has been recommended;initial pit optimisation studies provided 1,384,589t of ore grading 0.21% MoS2and 0.61% WO3 in stage 1. Incorporating stage 1 the final pit would total2,214,658mt of ore grading 0.21% MoS2 and 0.47% WO3. Stripping ratio for thefinal stage is 7.5:1. The two pits that have been designed from optimised shells are based onassumptions that include a processing rate of 400,000 tonnes per annum andcurrent molybdenum and tungsten prices discounted by 12% and 20% respectively. Mining is planned to be undertaken by conventional truck and shovel operations.Open pit designs have been completed in two stages, the initial pit of 3.7 yearsand subsequently the pit continues for a further 1.9 years. Of the measured and indicated categories approximately 73% converted to reserve,which now totals: Tonnes Grade WO3 Grade MoS2Proven 530,000 1.00% 0.25%Probable 1,610,000 0.30% 0.20%Total 2,140,000 0.47% 0.21% The reserve does not include any portion of the inferred resource which totals770,000 tonnes. The mining reserve contains a total of 4.8 million pounds of molybdenum metaland 700,000 mtu's of tungsten which will be produced over the expected life ofthe open pit with life of mine designed to be 5.6 years. Engineering Review Due to the time lapsed sine the DFS, Thor requested GR Engineering ("GRE") toconduct a review of the capital expenditure requirements for the MolyhilProject. GRE's estimated capital cost for the Molyhil process plant at 400,000 tpa,excluding owner operator plant and equipment, but including an allowance forcontingency, EPCM and Owner's costs is circa AUS$49.6 million. The additionaloperational plant and equipment is estimated to increase the capital expenditureto approximately AUS$63.3 million. This additional capital spend includes; • The outright purchase of the mining equipment;• The outright purchase of the power generation plant;• The purchase of the village and infrastructure buildings;• The purchase of process plant and equipment; and• Escalation of costs from DFS to early 2008 award rates. The increased capital costs have a significant positive impact on the ongoingoperational costs, which are currently estimated at AUS$78 per tonne compared tothe DFS rate of AUS$94 per tonne. Open pit designs have been completed in two stages, the initial pit of 3.7 yearsmaximises the short term cash flow and, the subsequent pit continues for afurther 1.9 years at current commodity prices. Commenting on the updated resource estimate, Thor's Chief Executive Officer, MrJohn A. Young, said: "The new reserve is a significant advancement and has enabled us to progress ourofftake negotiations and this next milestone in the development of Molyhil isour focus over the next month. Utilising the new reserve we expect the updatedfinancial model to be released shortly". 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:
Thor Energy