Thor Mining (ASX: THR, AIM: THR) has delivered a positive Definitive Feasibility Study for the Molyhil tungsten and molybdenum project in Australia's Northern Territory, with the possibility of an extended mine life also being identified.
The study identified that Molyhil will deliver attractive financial returns as well as the early payback of the capital required for its development.
The study highlights include;
- EBIT returns provide for 21 month payback period;
- All equity Net Present Value of A$28 million with an Internal Rate of Return (NYSE:IRR) of 24%, after tax;
- Production cost of A$125/mtu concentrate compared with revenue of A$354/mtu;
- DFS outcomes calculated on 4 year ore reserve; and
- Substantial upside potential identified on optimisation of pit design parameters to extend mine life.
Mick Billing, executive chairman, commented on the good news, "We are now approaching the development phase for Molyhil and pleased that the DFS has so clearly defined the economic viability as well as the opportunity for an early payback on the capital required for its development.
"At the same time, we have identified ways to improve the mining life of Molyhil significantly and identified a large magnetic target below the known Molyhil resource and believe this may sustain a much longer term mining operation."
With the study complete, Thor is now well positioned to negotiate off-take sales and finance agreements to move the project towards development, which will then pave the way to commence detailed engineering studies, along with onsite civil works in preparation for mine and process plant construction and development.
Molyhil currently hosts an Ore Reserve of 1.64 million tonnes at 0.42% tungsten and 0.13% molybdenum, and importantly the tungsten grade in the reserve is 50% above resource estimate grade.
The project maintains upside potential for an extended mine life, as only 35% of resource tonnage is included in this initial reserve.
Molyhil, potential mine life extension a real possibility
There is plenty of potential blue sky for the Molyhil project, which may include extending the open cut operation and/or underground mining to extract more of the 65% of the resource, laterally and at depth, which is not included in the ore reserve.
Adding some further interest, there may be the ability to for additional production exploration targets, including some recently identified within several kilometres of Molyhil.
Finally, if the large magnetic target below the known Molyhil resource can be proven to contain economic mineralisation, then this could open up the door for a sustained longer term underground mining operation.
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