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Thor Mining improves economics of Molyhil with 12% increase in tungsten recovery

Thor Mining (ASX: THR) has successfully increased the projected metallurgical recovery of tungsten for the Molyhil project in the Northern Territory to 75% compared to the previous estimate of 67%.

Executive chairman Mick Billing said the improved recovery estimates should make a substantial difference to the Feasibility Study outcomes.

"Ore in the original mining plan will now be more profitable, while additional material not previously considered economic may now be included, providing for a more profitable and longer life operation," he said.

"In addition, these improved estimates make Molyhil significantly more attractive to potential offtake partners for tungsten and molybdenum concentrates as well as for potential financing arrangements."

Analyses by consultants Nagrom & Co, PAH Australia and Proteus EPCM Engineers have concluded that tungsten recovery at Molyhil should increase by subjecting tailings from the tungsten gravity extraction process to flotation.

This tailings material will contain 27% of the total tungsten in the system.

Another plus for Molyhil is that 30% of the tungsten in this stream should be recoverable at relatively low cost.

Importantly for the project and for Thor the estimated value of improved tungsten recovery would be about an additional A$900,000 per annum in gross revenue, per each additional 1% of tungsten recovered.

On current estimates, this would add around a further $7 million to the annual revenue stream from Molyhil before additional processing costs.

The initial expected revenue stream from the project's tungsten sales was estimated at US$360 per metric tonne unit.

The improved recovery would result in a revised cost per metric tonne unit after molybdenum bi-product credits, and prior to incremental extraction costs from this flotation step, of $109 per metric tonne unit.

Next steps at Molyhil

Proteus EPCM Engineers is preparing an optimisation addendum to the previously published capital and operating cost estimates.

The revised costings, along with the updated Molyhil Resource, will be incorporated into the ore reserve and mining plan calculation of the Feasibility Study, with outcomes expected in February.

The revised Resource from 2011 drilling is scheduled for release later this month.

Hard work paying off

Thor can expect to see the fruits of its labour with the release of its impending revised Resource at Molyhil.

The result of Thor's hard work is already beginning to pay off with the substantially improved economics of the project.

The company has been hard at it in 2011, keeping the drills turning in a way that has resulted in an increased proportion of finance getting to its exploration programs.

A research report by a U.K. broker has concluded that the results of this labour will become apparent when the revised Resource is published.

Another U.K. research house has recommended Thor as a buy and placed a 3.9p target price on the company, more than triple its current share price.