Thor Mining says depressed molybdenum and tungsten prices still weighing on Molyhil

Thor Mining (AIM, ASX: THR) said that continuing depressed molybdenum and tungsten prices and the strength of the Australian dollar against the US dollar were further delaying the development of its Molyhil tungsten and molybdenum project in Australia.

It made the comment in a corporate activity update for the quarter ended 31 December 2009, a day after announcing plans to raise A$250,000 through a placing of 16.67 mln new shares, with the funds earmarked for evaluating new projects to supplement Molyhil.

The company is actively seeking new projects with an emphasis on mainstream commodities to enhance its portfolio. As announced in November 2009, Molyhil is currently on hold due to the depressed price of molybdenum.

Thor said today that the price of molybdenum roasted concentrates has increased to US$15.25 per pound, and the selling price of tungsten APT (ammonium paratungstate) has increased and tightened to between US$195 and US$205 per metric ton unit. These prices however are substantially below levels required for development with confidence, it added.

Regarding its exploration projects, the group said it conducted planning for a 320 kilometre line EM survey during the December quarter on the Harts Range base metals tenements in the Northern Territory. It is expected that this survey will be completed during January 2010.

The company has also initiated a search for new exploration projects focusing on gold and base metals.

The quarter closed with AS$0.5 million cash reserves.

In yesterday’s announcement, Thor reiterated that it remains committed to Molyhil and strongly believes in its long term viability.  Steps have been taken to conserve cash levels. These included cessation of work with third party engineering companies on verifying capital and operating cost savings for Molyhil and a 50% reduction in directors’ remuneration and the redundancy of chief executive officer Ian Sheffield-Parker.  Executive chairman Mick Billing is undertaking his role in the interim.

Molyhil is estimated to have a total resource of 3.75 million tonnes graded at 0.19% molybdenum (MoS2), 0.32% tungsten (WO3) and 28% iron (Fe2O3), including measured resources of 540,000 tonnes graded 0.24% MoS2, 0.33% WO3 and 29.4% Fe2O3 and indicated resources of 2.3 million tonnes graded at 0.18% MoS2, 0.38% WO3 and 29.4% Fe2O3 respectively.  http://www.proactiveinvestors.co.uk/companies/news/12695/thor-mining-says-depressed-molybdenum-and-tungsten-prices-still-weighing-on-molyhil--12695.html