Acquisition of Spring Hill pr
THOR MINING PLC
Acquisition of Spring Hill Gold project in Northern Territory
Dated: 21 January 2011
The Directors of Thor Mining PLC ("Thor" or the "Company") (AIM, ASX: THR) the exploration company focussed on gold and base metal projects and advancing tungsten-molybdenum projects in the Northern Territory of Australia, are pleased to announce today that the Company has agreed terms for the staged acquisition from Western Desert Resources Limited ("WDR") of up to an 80% interest in the 274,000oz Spring Hill Gold Project in the Northern Territory.
Insert Figure 1: NT location map
http://www.rns-pdf.londonstockexchange.com/rns/8747Z_-2011-1-21.pdf
HIGHLIGHTS
· Spring Hill hosts an Indicated Resource of 274,000oz gold within 3.64Mt @ 2.34
grams per tonne (g/t) gold;
· Potential for significant exploration upside using the "Callie" model;
· Initial acquisition of 25% interest with staged options to increase to 80%;
· Two pronged approach to development:
• Feasibility for early open pit production; and
• Exploration for a substantial orebody at depth.
SPRING HILL GOLD DEPOSIT
Location
The tenements are located approximately 150 km south of Darwin in Australia's Northern Territory. Importantly the location is served by all-weather access and is in close proximity to the arterial Stuart highway, north-south rail, gas pipeline, and trunk powerlines (Figure 1).
Geology & Gold Mineralisation
Discovered around 1880, the Spring Hill gold deposit yielded approximately 20,000 ounces of recorded high grade gold production (15-30 g/t) over the following 25 years.
It shows many of the characteristics frequently associated with numerous gold deposits in the NT's Pine Creek region. The host rocks are (meta) sedimentary greywackes and siltstones of the lower part of the Mt Bonnie Formation.
Gold occurs mainly in quartz veins concentrated in fracture zones and the axial zones of anticlinal fold structures. Much of the gold is relatively coarse-grained, in the visible range, imparting significant 'nugget effect' to drill samples.
Four main zones of gold mineralisation cover an area of approximately 1,000 x 400 metres (Figures 2 & 3). They have been outlined during the early 1990's and mid 2000's by drilling conducted by previous owners of the project around historic workings. Several subordinate occurrences have been identified in adjoining areas, but are little tested.
Insert Figure 2: Summary map of geology & gold mineralised zones
http://www.rns-pdf.londonstockexchange.com/rns/8747Z_1-2011-1-21.pdf
Resource Estimate
(3.6 million ounces @2.34g/t gold. Cut-off grade 1.0 g/t)
|
|
|
Measured |
Indicated |
Inferred |
Total |
|||||||||||
|
|
|
Tonnes (Mt) |
Grade g/t Au |
Tonnes (Mt) |
Grade g/t Au |
Tonnes (Mt) |
Grade g/t Au |
Tonnes (Mt) |
Grade g/t Au |
Contained ounces Gold (K oz) |
||||||
|
Zone of Oxidation |
- |
- |
1.32 |
2.16 |
- |
- |
1.23 |
2.16 |
92 |
|
||||||
|
Transition Zone |
- |
- |
0.50 |
2.37 |
- |
- |
0.50 |
2.37 |
38 |
|
||||||
|
Unweathered Zone |
- |
- |
1.82 |
2.47 |
- |
- |
1.82 |
2.47 |
144 |
|
||||||
|
Total |
- |
- |
3.64 |
2.34 |
- |
- |
3.64 |
2.34 |
274 |
|
||||||
Estimate: McDonald Speijers, June 2003, Compliant with JORC Code September 1999
Insert Figure 3: Summary Cross Section
http://www.rns-pdf.londonstockexchange.com/rns/8747Z_2-2011-1-21.pdf
ECONOMIC EVALUATION
Open pit mine optimisation studies were undertaken in 2003 based on the most recent resource block model. These indicated that a modest proportion of the resource might be economically mineable within then-current cost & gold price assumptions (long-since superseded).
Metallurgical test work was undertaken in 1995 and 2003 on composite samples obtained from drilling. These investigations encompassed both crushing & grinding characteristics, and gold extraction performance. They have enabled the general characterisation of the gold mineralisation and preliminary design of treatment process and plant, but are yet to address some areas of detail in these regards. Notably, more than 30% of contained gold is recoverable by gravity methods in both oxidised and primary mineralisation, at relatively coarse grind size.
Both the mining and metallurgical design elements of the 2003 scoping study need to be upgraded, confidence in the resources needs to be enhanced, and other elements of project preparation evaluated (site logistics, environmental and Aboriginal considerations, water supply, etc) before the project is properly scoped, at which time it should be possible to compile feasibility studies at increasing levels of detail.
SPRING HILL EXPLORATION POTENTIAL
The Spring Hill gold deposits remain open at depth. Satellite deposits along strike from the main deposits remain essentially untested by drilling. These areas present opportunities for increasing the resource base of the known mineralisation.
More importantly, the Company believes that the Spring Hill gold deposit could be just the indicator of much more substantial mineralisation at depth. Figure 4 (a publication of the Northern Territory Geological Survey) indicates the conceptual setting of gold throughout the Pine Creek Inlier. The Northern Territory's Tanami Region shares a near-identical geological history and gold endowment. Importantly, in the Tanami, the Callie deposit (resources + production >5 million ounces at 5-6 g/t gold) occupies a structural-stratigraphic setting comparable to that of Cosmo Howley (resources + production >1 million ounces at 3-4 g/t) in Figure 4. Consequently the Company is targeting a sheeted vein system deeper in the anticline, below the known Spring Hill mineralisation and which it believes has substantial Company-making potential.
The targeted stratigraphy is exposed, up the plunge of the Spring Hill anticline, only a few hundred metres north-northwest of the Spring Hill deposit and is believed to exist in the subsurface at depths which are reasonable to test by drilling. The target deposit is much more than an extension of the exposed mineralisation; it is a separate deposit in a separate but related setting. The sheeted vein characteristic of much of the Hong Kong Lode at Spring hill provides evidence of favourable structural settings, while the magnitude of the Spring Hill system gives promise of additional gold concentrations in chemically more favourable environments at depth. The concept has yet to be tested at Spring Hill.
Insert Figure 4: Structural and stratigraphic setting and styles of gold mineralisation in the Pine Creek Inlier (After N.T. Geological Survey)
http://www.rns-pdf.londonstockexchange.com/rns/8747Z_3-2011-1-21.pdf
EXPLORATION/ EVALUATION PROGRAM
Thor is proposing during the 2011 dry season (March-November) to advance investigations into both feasibility of open cut mining and the deep 'Callie-style' discovery target.
In the near surface the program includes diamond and Reverse Circulation (RC) drilling to provide further confirmatory information in support of renewed resource estimation, and additional fresh sample for metallurgical testing. In addition consultant studies will be launched to address gaps in the current scoping and pre-feasibility databases.
Deep target exploration may be preceded by a geophysical survey later this year with the objective of completing an initial drill hole of 500-600m depth.
A budget of A$1.0 - 1.5 million is envisaged.
ACQUISITION
Key terms of the Spring Hill project acquisition are as follows:
• initial acquisition of a 25% interest in ML23812 and EL22957 for consideration of A$1,250,000 plus the issue to WDR of 10 million Thor ordinary shares;
• the option to acquire an additional 26% interest in the tenements for consideration of an additional 5 million Thor ordinary shares plus additional ordinary shares to the value of A$250,000, to be issued to WDR, exercisable following expenditure by Thor of A$1.5 million in exploration and development expenditure within 18 months of completion of the acquisition of the initial 25% interest. If Thor elects not to exercise this option it will forfeit its 25% interest in the tenements to WDR;
• the option to acquire an additional 29% interest in the tenements for consideration of a further 5 million Thor ordinary shares plus additional ordinary shares to the value of A$500,000, to be issued to WDR, exercisable following the expenditure by Thor of a further A$1.5million in exploration and development expenditure within 30 months of completion of the acquisition of the initial 25% interest;
• if Thor elects not to increase its interest in the tenements to 80%, then the parties will form a joint venture. WDR may then sell its interests with Thor holding a 1st right of refusal. In the event that WDR does not sell its interest & is diluted to 5% or less it may elect to withdraw from the joint venture in exchange for a 1.5% net smelter return royalty;
• Thor to sole fund all exploration activities on the tenements, have sole discretion as to the exploration programs and keep the tenements in good standing pending exercise of its options to increase its equity interests in the tenements.
The transaction is subject to:
• execution of a definitive transaction document;
• approval by Thor shareholders proposed to be sought at a general meeting within 3 months;
• obtaining all necessary approvals under the Mining Act 1980 (NT) to the initial acquisition;
• The securities to be issued being admitted to the AIM market of the London Stock Exchange ("AIM"); and
• Thor raising a minimum of A$2.5 million in equity capital (inclusive of the capital raising announced on 17th January 2011).
Comment on the proposed transaction by the Chairman of Thor, Mr Mick Billing:
"We are delighted to secure an interest in this historic but still very promising gold project. The existing resource is significant and we will be very active in assessing the potential for open pit production in the near term. Importantly however we are very excited about the potential for significant mineralisation at depth. Geologically the Pine Creek region of the Northern Territory is very similar to the Tanami region to the south and which hosts the giant Callie gold mine. A project with this type of mineralisation at and near surface is a very good place to look for the large deeper deposits of the style of Callie."
Competent Persons Statements
The information in this report that relates to exploration results is based on information compiled by Trevor Ireland, who is a Fellow of The Australasian Institute of Mining and Metallurgy. Mr Ireland is a Non-executive Director of Thor Mining PLC and provides professional services on a contractual basis. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Trevor Ireland consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
The information in this report that relates to mineral resources or ore reserves is based on information compiled by Diederik Speijers who is a Fellow of The Australasian Institute of Mining and Metallurgy. Mr Speijers is the principal of consulting firm McDonald Speijers. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Diederik Speijers consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Enquiries:
|
Mick Billing |
+61 (8) 7324 1935
|
Thor Mining PLC |
Executive Chairman |
|
Allan Burchard |
+61 (8) 7324 1935
|
Thor Mining PLC |
CFO/Company Secretary |
|
John Simpson |
+44 (0)20 7776 6550
|
Daniel Stewart & Co. plc |
Nominated Adviser |
|
Nick Emerson/ Renato Rufus |
+44 (0) 1483 413500 |
Simple Investments |
Broker |
Updates on the Company's activities are regularly posted on Thor's website www.thormining.com, which includes a facility to register to receive these updates by email.
This information is provided by RNS
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