Quarterly Report - June 2008
THOR MINING PLC
QUARTERLY REPORT - JUNE 2008
Dated: 31 July 2008
Thor Mining PLC ('the Company' or 'Thor'), AIM, ASX: 'THR' the specialist metals company focused on advancing tungsten-molybdenum and uranium projects in the Northern Territory of Australia, today released its quarterly report for the period to 30 June 2008.
TUNGSTEN-MOLYBDENUM PROJECTS
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Preliminary metallurgical test work on removal of magnetite promotes development of alternate flow sheet to produce magnetite concentrate on site. Further metallurgical test work underway including x-ray sorting.
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Three mining leases granted for Molyhil Tungsten-Molybdenum Project ('Molyhil') resulting in approval of the Molyhil Mining Management Plan ('MMP') and authorisation to begin development being received from the Department of Primary Industries, Fishing and Mining ('DPIFM').
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Significant sampling results received from the Hatches Creek Tungsten Project including up to 7.24ppm Au and 13.3% W.
URANIUM PROJECTS
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At Bundey River a total of 27 air core holes 07BRAC001 - 027 were drilled for 1,685m. A total of 567 samples were sent for analysis with both sand and carbonaceous clay units having been intersected, the latter returning anomalous scintillometer readings up to 317cps. No assay results received to date.
CORPORATE
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New Chief Operating Officer, Mr Ian Sheffield-Parker appointed for Molyhil development.
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Western Desert Resources Ltd (WDR) acquired 16.7% of Thor.
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Mr John W Barr has stepped down as Executive Chairman and left the Board.
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Three nominees of WDR appointed to the Board.
MOLYHIL TUNGSTEN - MOLYBDENUM PROJECT
Molyhil is a proposed open cut mine and processing facility to be constructed in the Northern Territory. The main objective of the proposed facility is to produce scheelite and molybdenite concentrate for sale.
Thor, through its wholly-owned Australian subsidiary Molyhil Mining Pty Ltd, owns 100% of the Molyhil Project, which comprises two EL's 22349 and 24392, totalling 829km2 in area, and includes three granted Mining Leases 23825, 24429 and 25712. The combined Mining Leases cover an area of 247ha.
MOLYHIL DEVELOPMENT
Finance
Development of the project and in particular financing is now the key priority. Thor has in place a mandate with Trade Finance Corporation based in Hong Kong and alternatives are being considered. A number of meetings have been held both in London and Australia with traditional banks and financial institutions.
The current state of the equity market here and overseas has not been a positive environment in which to raise money. During the quarter we saw a decline in the Australian market particularly with respect to the Opes Prime collapse. The sale of their interest in Thor shares and Thor warrants was completed by the end of May.
The outlook for both commodities continue to be optimistic with published prices increasing slightly over the last quarter with Molybdenum roasted concentrates at US $33.5 to $34 per lb and Tungsten APT at US $250-$253
Alternate Development Strategy
The Thor development team have continued to review capital and operating costs by looking at economies of scale and streamlining of processing strategies. As part of this exercise a technical review of the current flow sheet was undertaken and as an alternative approach the removal of the magnetite at the beginning of the flow sheet is now under consideration. Removal of the magnetite up front reduces the amount of material to be processed downstream by 26%. Fine magnetite products for the coal washing and steel industries could be produced as part of the flow sheet. Revenue from sales of these products should improve the economic model.
Nagrom, a specialist metallurgical group particularly in gravity recovery of metals, has just completed a gravity concentration trial to extract the magnetite and concentrate molybdenum and tungsten together as part of an alternate flow sheet that would reduce capital and operating costs. Approximately 500kg was crushed to -1mm and this material was subjected to wet and dry magnetic separation and gravity recovery by spirals and tables. Preliminary assays indicate that a magnetite product can be obtained and a 10 to 1 beneficiation is achievable reducing 400,000 tonnes of ore to 40,000 tonnes of primary concentrate. This is achieved with minimal loss of tungsten although there are higher losses of Molybdenum to tailings using this process as against flotation. At this stage flotation would still be required on site to achieve similar recoveries to the original flow sheet.
First pass Davis tube test work has been completed by Nagrom for the magnetite concentrate and they reported that the test had produced a -75um product with minimal contaminants and an iron purity of 69.2%. Pure Fe2O3 contains 69.9%. The test also concluded that for every 1,000 tonnes of ROM (run of mine) ore processed, 220 tonnes of this high grade magnetite would be produced.
Recently Vital Metals Ltd has had success in using x-ray sorting to reject waste material with up to 55.2% of the feed material rejected. Nagrom will supply Applied Ore Sorting Technologies with approximately 30kg of material for first pass testing to see if Molyhil ore is suitable for this type of ore beneficiation.
Mining Leases Granted and Mining Management Plan Approved
The three mining leases, ML 23825, ML 24429 and ML 25721 which cover a total area of 246ha were granted in April. The grant of the three mining leases marks a further key milestone in the approvals process for Molyhil, following the signing of a native title mining agreement with the area's traditional owners in October 2007. The final review of the MMP by the DPIFM in the Northern Territory has been completed and official authorisation was given on 9th of July 2008 subject to a security being lodged as a bank guarantee.
HATCHES CREEK TUNGSTEN PROJECT (EL22912 & EL23363) ('HATCHES CREEK')
Hatches Creek EL22912 & EL23463
In May native title access meeting was held at Hatches Creek to obtain approval for upcoming work programs. Following on from this a rock chip and mapping program was completed to assist with planning of the proposed RC program. A total of 174 rock chip samples were taken over old workings and from abandoned stockpiles associated with the historic mining centre. Mineralised reefs are present in groups and there are numerous reefs within 16 groups of lodes. Mining here occurred from 1913 until 1957.
Exciting results have been received from the 5 main groups of workings. Significantly the average tungsten grade returned from 174 samples of wolfram - quartz veins was 2.19%, with a strong Cu, Ag and Bi association with average results of 1.92%, 5.36ppm and 0.22% respectively.
A strong gold association was noted at the Pioneer mine area with maximum gold results of up to 7.24 ppm Au and an average of 0.92ppm Au. At Hit and Miss group a number of samples also returned favourable molybdenum assays peaking at 1.98%.
Before any drilling can commence old access tracks will need to be cleared. Earthmoving equipment from Epenarra Station is being sourced to complete the work which will need to be supervised by one of the traditional owners to avoid disturbance of any significant sites and vegetation. A suitable drill rig will hopefully be sourced for this program to be commenced in the September quarter.
Pioneer Mine Area
Significant gold assays were received from the Pioneer workings at the north end of the Wolfram Field, with gold results up to 7.24g/t Au from mullock dumps at the Pioneer Mine. It is also interesting to note that anomalous gold assays were returned from battery sands at the mine of up to 2.48g/t Au. Visible wolfram was noted in many of the quartz rock chip samples with a number of results >1% W and the average of the 27 samples taken returned 1.16% W and 0.3% Bi.
Green Diamond Group
At Green Diamond tungsten mineralisation in the Hatches Creek area occurs as narrow quartz veins (up to 1.5m thick and extending up to 200m in individual lenses) hosting exceptionally high grade tungsten as wolframite crystals several centimetres in length. Virtually all veins visited at old prospects and exploration pits had visible wolframite evident. Thirty eight samples were taken returning an average grade of 1.42% W with a high of 7.22% W.
Significant copper mineralisation was evident at numerous locations also associated with quartz veining occurring as malachite and/or azurite. High grade copper mineralisation was evident at the Green Diamond Prospect where quartz vein mullock from deeper parts of the workings exhibited massive sulphide veining containing bornite and chalcopyrite. High concentrations of malachite and azurite were also noted with four samples returning results of >1% Cu.
Hit and Miss Group
Results from quartz vein samples at Hit and Miss returned an average grade from 23 samples of 2.9% W, with a high of 13.3%. Other than the obvious wolframite mineralisation, significant molybdenite was noted in mullock at the Hit and Miss workings near Chinamans shaft with assays returning up to 1.98%. The workings are associated with one of the largest veins noted to date although numerous other parallel vein sets occur at the prospect. Not tabled here are the anomalous values here for Ag of up to 46pmm and Sn to 0.2%.
Copper Show Group
The Copper Show workings were also located and are worthy of some follow up work as the main lode is easily traceable in later costeans that have been excavated. Along with the ubiquitous wolframite mineralisation the main lode exhibits significant malachite and azurite. The prospect area is relatively flat lying surrounded by hills. Significant potential exists for additional mineralisation under cover between the northern and southern areas of EL22912.
Treasure Group
The Treasure Group workings cover an extensive area that occupies two valleys and the sides of the adjacent hills in the central part of the Hatches Creek Wolfram Field. The Treasure Group also boasted a general store, a generator shed and large living quarters and office the ruins of which are still evident. Workings extend to the west previously known as 'Next Treasure'. The results returned consistently high tungsten assays from visible wolframite in quartz veining and the average tungsten grade returned 3.84% W. Only minor copper was noted in hand specimen in this area which is reflected in the assays.
URANIUM EXPLORATION
Bundey River
At Bundey a total of 27 air core holes 07BRAC001- 027 were drilled for 1,685m. Three metre composite samples were taken. A total of 567 samples were sent to Amdel in Adelaide for multi element analysis.
Average depth of the holes was 60m. Both sand and carbonaceous clay units have been intersected in most holes, the latter returning the most anomalous scintillometer reading of up to 317cps.
Basement lithology consisting of a pyritic quartz biotite garnet gneiss was intersected at the bottom of hole 08BRAC011 containing a significant amount of disseminated and massive pyrite bands may also be the source of some of the basement conductors interpreted from the SkyTEM data.
A thick unit of carbonaceous sediments were intersected in 08BRAC012 from 103m to bottom of hole which coincides with both a strong paleochannel conductor and basement conductor.
Other projects
No work was completed this quarter at the Harts Range Curtis Pound and Hale River Projects.
CORPORATE
New Appointment
Mr Ian Sheffield-Parker has been appointed Chief Operating Officer. Mr Sheffield-Parker will initially be based in Perth before moving to Adelaide later in 2008. Mr Sheffield-Parker has a process engineering and metallurgical background with over 20 years experience in Australia and South Africa.
Mr Sheffield-Parker has recently held senior metallurgical and mining positions as executive director of Skardoin River Kaolin Project and previously as General Manager of Eneabba Mineral Sands for Iluka Resources Ltd. Particularly relevant is his hands on operational experience with gravity recovery plant during time spent with both Iluka and RGC.
Western Desert Resources Investment
During the June quarter Western Desert Resources Limited ('WDR') (ASX: WDR), an exploration company operating in Australia, acquired 16 million ordinary shares in the Company and a further 9 million placing shares to raise $720,000 for Thor. The funds from the placing will be used for working capital and ongoing development work at Molyhil. Following the placing and the acquisition of the ordinary shares WDR holds approximately 16.7% of the issued share capital of the Company. Following this transaction, the role of Executive Chairman became redundant, and Mr John W Barr resigned as Executive Chairman of the Company and also as a director of Thor.
Thor appointed Michael Billing as Non-executive Chairman, Norman Gardner and Michael Ashton as Non-executive Directors of the Company. All are directors of WDR.
Thor intends to retain a majority of its current staff and consultants in the medium term. However, a transition to Adelaide is expected over the next six months.
Cash Position
The quarter closed with $2.8M in cash.
Opes Prime
A significant number of Thor's shares and warrants were caught up in the collapse of the Opes Prime Group, but the Company can confirm that the register is now clear of any Opes Prime Group holdings.
TENEMENTS
The Molyhil mining leases were granted during the quarter.
The information in this report that relates to exploration results, mineral resources or ore reserves is based on information compiled by John Young, who is a Member of The Australasian Institute of Mining and Metallurgy. John Young is a director of Thor Mining PLC. John Young 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'. John Young consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Enquiries:
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John Young
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+ 61 (0)419 954 020
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Thor Mining PLC
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Chief Executive Officer
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Damian Delaney
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+61 (0)438 921 666
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Thor Mining PLC
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Chief Financial Officer
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John Simpson
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020 7489 4500
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Blomfield Corporate Finance Ltd
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Nominated Adviser
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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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