Thor Mining lifts Molyhil tungsten and molybdenum Resource; Reserve upgrade anticipated

Thor Mining (ASX: THR) has lifted the tonnage at the Molyhil Tungsten and Molybdenum Project by 25% to 4.7 million tonnes, as the company works towards a Feasibility Study.
With the tonnage increase, contained tungsten has grown 10% to greater than 13,100 tonnes, while contained molybdenum has increased 46% to more than 10,400 tonnes.
An updated ore Reserve and mining plan are due in February 2012, based on results from 12,839 metres of reverse circulation drilling, 1,816 metres of diamond drilling and three underground exploration shafts and cross cuts.

Chairman Mick Billing told Proactive Investors the nature of the tungsten intersected could allow for early cash flow.

“The grades near surface are very high tungsten grades indeed, and that suggests to us that we’ll get a very quick pay back on the capital for the project,” Billing said.

This would also depend on the mining plan and Feasibility Study.

In addition, Billing told Proactive Investors that a mine life increase could be on the cards.

“The consistency of the deposit and the grade of the deposit probably allows us to continue to mine the operation for longer than previously planned, so instead of it being a 3.5 to 5 year mine life operation we might get an extra couple of years out of that and that’s an outstanding outcome.”

Mining consultancy Runge Limited prepared the Resource update, and is expected to release a Reserve upgrade for Molyhil next month, along with an updated Feasibility Study.

“We are relatively confident we’ll have that out before the end of February, and while we’re doing that we’re working with a bunch of people to try and secure the agreement for the concentrate so we can sell this stuff,” Billing said.

In addition, Proteus EPCM Engineers is preparing an optimisation addendum to the previous capital and operating cost estimates to reflect the recently announced process improvements.

These improvements lifted the projected metallurgical recovery of tungsten for Molyhil to 75%, up from the previous estimate of 67%.

Of the tungsten in this stream, 30% should be recoverable at relatively low cost.

Timeline to mining

Following the completion of the Feasibility Study, Thor will need to secure offtake agreements and finance for Molyhil before the company will move to tender for design, construct and EPCM work.

Billing said Thor could be potentially turning the first sod at Molyhil early in the second half of this year.

“If we can commence development early in the second half of this year, and at this stage we’re relatively optimistic that we can, then there’s a construction period of roughly 12 months,” Billing told Proactive Investors today.

“We should be in production in the second half of 2013.”

About Molyhil

Located in the Northern Territory, Thor’s wholly owned Molyhil project comprises two adjacent outcropping iron rich skarn bodies, marginal to a granite intrusion, containing scheelite (tungsten) and molybdenite mineralisation.

The resource area covers 250 metres of strike and has 410 metres of vertical extent.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/24614/thor-mining-lifts-molyhil-tungsten-and-molybdenum-resource-reserve-upgrade-anticipated-24614.html