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Thor Mining Moving To 51% Equity In Spring Hill

Thor Mining (ASX: THR) is increasing its stake in the Spring Hill gold project, Northern Territory, to 51% after partner Western Desert Resources (ASX: WDR) transferred a further 26% stake.

The transfer recognises the expenditure that Thor has made on the project as it builds up the resource inventory, which currently stands at 10 million tonnes at 1.4 grams per tonne (g/t) gold for 450,000 ounces (cutoff grade of 0.5g/t).

"We are delighted to have achieved this increase in equity ownership of the Spring Hill project. Our exploration to date has confirmed extensions to the mineralisation, and added to the value of the project, and we still have more targets to test," Thor executive chairman Mick Billing said.

"In addition we will be investigating all options to realise value from the project at an early stage."

WDR's signed instrument of transfer will be lodged with the Northern Territory Department of Resources for approval.

Once Ministerial approval is received, Thor will transfer 21.67 million CDIs to WDR.

Thor plans to acquire an 80% interest in the project, and is currently evaluating development options.

Room to grow

Spring Hill remains highly prospective for additional near surface mineralisation at previously identified satellite targets as well as new targets identified from evaluation of recently flown high resolution aeromagnetic (helimag) data.

Low cost percussion drilling is likely to be used for first pass testing of these targets in early 2013.

Satellite targets have being identified in several locations close to the main Spring Hill resource based on high grade intercepts from Ross Mining/Billiton joint venture drilling undertaken in 1989-92.

Historic drill intercepts include:

- SHRC181: 26 metres at 2.56g/t gold from 59 metres (0.1g/t cutoff), including 16 metres at 4.0g/t gold (0.5g/t cutoff); and
- SHRC182: 6 metres at 0.26g/t gold from 0 metres (0.1g/t cutoff), and 13 metres at 0.77g/t gold from 26 metres (0.1g/t cutoff), including 7 metres at 1.13g/t gold from 29 metres.


Thor remains highly under-priced below its gold explorer peers with an EV/Resource of about $34 per ounce.

Throw in its Molyhil tungsten and molybdenum project and the Dundas Project within the Albany-Fraser Province, and the under-valuation become more acute. We consider that Thor offers upside to $0.02 - $0.025.

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