- Advancing two high-value gold projects in West Africa
- Nigeria has had very little exploration over last 60 years due to focus on oil
- Segilola has nameplate capacity of 650,000 tonnes per annum (tpa); processing rate of 625,000 tpa
What Thor Explorations does:
West Africa-focused mining group Thor Explorations Ltd (CVE:THX) is advancing Nigeria's first large-scale gold mine, namely its flagship Segilola project, towards first production.
The Vancouver-based company is fully funded, in construction and on track for the first gold pour at the wholly-owned project in the second quarter of 2021, the company has said.
Thor Explorations also has the Douta exploration project, where it holds 70% and has an opportunity to increase that to 100%, in the south-east region of Senegal. The mining lease lies within 5 kilometres (km) of Senegal's largest undeveloped gold resource, namely the 4.4 million ounce (Moz) Massawa deposit, which was recently sold by Barrick Gold Corp (NYSE:GOLD) to Teranga Gold Corp (TSE:TGZ) for up to US$430 million.
Elsewhere, Thor Explorations is also in a joint venture with major Barrick Gold on the Central Houndé project in western Burkina Faso. Barrick has a 51% stake, while Thor owns 49%.
Barrick is earning up to 8% by funding a minimum of US$2 million and completing a pre-feasibility study (PFS) on the property, which lies in the prospective Houndé belt, which has seen 10 Moz worth of gold discoveries.
Back to the firm's main project, and construction at Segilola started on the mine early last year. It has a 15 month build time-line for the high-grade open pit project and all approvals are in place.
Segilola has a 25-year mining licence and the NI-43 101 open pit probable reserve stands at 405,000 ounces of the yellow metal at a grade of 4.2 grams per ton (g/t). The higher confidence indicated resource is 469,000 ounces at 4.7 g/t of gold.
A definitive feasibility study showed a robust project, to be mined by a contractor, with a five-year mine life, which offers excellent leverage to the gold price.
Capital expenditure for the mine was put at just US$87.5 million, while the all-in-sustaining-costs (AISC) are put at a competitive US$662 per ounce, which is in the lowest quartile on the global cost curve.
Based on a gold price of US$1,300 per ounce, the post-tax net present value (NPV) comes in at US$138 million with an impressive 50% internal rate of return (IRR) and a payback in under 1.4 years. With the current reserve, at a US$1,600 gold price, Segilola shows a post-tax NPV of US$238.1 million and at a US$1,800 gold price shows a post-tax NPV of US$305 million
In April, 2019, Thor signed a term sheet for a US$78 million financing with the Africa Finance Corporation (AFC) for the construction and ramp-up of the project. The package included a US$54 million senior secured credit facility, a US$9 million gold stream pre-payment and a US$15 million equity investment from AFC, which will become a 20% shareholder in Thor.
How is it doing:
On February 2, Thor Explorations announced an encouraging first set of drill results from the northern extensions of the Makosa Discovery at its Douta Project, Senegal, with mineralisation confirmed over 1,000 metres (m) of strike length in a number of parallel lodes at Makosa North.
The group noted that the drilling program was designed to test the mineralisation along strike and down dip from the mineralisation delineated from previous drill programs on Makosa. The results received to date confirm the continuation of the Makosa mineralised system along strike to the north.
The best results included 5m grading 3.37 grams per ton (g/t) gold from 32m returned from drill hole DTRC129, which is located on the northern-most section completed in this program. The group said there is obvious potential to extend the mineralised strike length further to the north. Ongoing exploration is planned to explore the Makosa North mineralisation both to the north and at depth.
In December 2020, Thor Explorations had also announced encouraging final drill results from in-pit and extensional diamond drilling at Segilola, which could potentially lead to more ounces being recovered, ahead of an updated resource statement earmarked for early in the first quarter this year.
Highlight drill assays included 32.5 metres (m) (17m true width) at a grade of 3.2 g/t gold in one hole, and 47.5m (20m true width) grading at 2.2 g/t gold in another.
Meanwhile, in October, the company said it had started a 10,000m reverse circulation (RC) drilling program at its Douta project, following a successful auger drilling campaign carried out in May and June which delineated three promising drill targets.
The firm said the program would initially focus on the Maka prospect where two high-grade gold mineralized areas have been defined through auger drilling. The program will then focus on extending the strike length of the Makosa discovery located in the southern part of the licence. The next major milestone for Douta then is the publication of a maiden resource.
The Douta licence is strategically positioned between the ‘world-class’ deposits of Massawa and Sabadola to the west and the Makabingui deposit to the east and is home to five separate gold prospects identified by surface geochemical sampling.
These comprise the more advanced Makosa prospect over a 3km strike length, and the earlier stage Maka, Mansa, Samba and Makosa Tail prospects.
On the financing front, on December 1 last year, Thor revealed that it had received an initial disbursement of US$21.5 million under the US$54 million senior debt facility from the Africa Finance Corporation.
The drawdown coincided with the arrival of the first shipments of equipment at Lagos port, as well as the shipment of SAG and ball mills from China under an EPC contract with Norinco International.
- First gold pour from Segilola project
- Further results from Douta
- More news from Burkina Faso project
What the boss says:
In February's statement on Douta, Thor Explorations chief executive Segun Lawson, told investors: “These drill results extend the mineralised strike length of Makosa by over a kilometre. Furthermore, the mineralisation remains open to the north and at depth. We will be extending the drill program to follow the mineralisation along strike as Makosa remains a priority for us. And continues to demonstrate its exploration potential.
"We are looking forward to receiving the remainder of the results from the other prospects in the coming weeks, which we intend to feed into a maiden resource statement.”
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