viewThor Explorations Ltd.

Thor Explorations is building Nigeria's first large scale gold mine at Segilola


Thor is advancing its wholly-owned flagship Segilola gold project in Nigeria - the country's first large scale gold mine - towards production

Thor Explorations Ltd. -

Quick facts: Thor Explorations Ltd.

Price: 0.215 CAD

Market: TSX-V
Market Cap: $133.6 m
  • Developing high-grade Segilola project and pipeline of exploration opportunities

  • Nigeria set to emerge as one of the 20 largest economies globally this year

  • Mining friendly country with very little exploration over last 60 years due to focus on oil

What Thor Explorations does:

West Africa-focused mining group Thor Explorations Ltd (CVE:THX) is advancing towards production its wholly-owned flagship Segilola gold project in Osun state, Nigeria - the country's first large scale gold mine.

The Vancouver-based company also has a growing portfolio of quality exploration assets in Senegal and Burkina Faso.

At Segilola, construction has already started on a 15 month build for the high grade open pit project, all approvals are in place and first gold production is earmarked for the first quarter of 2021.

In April last year, the firm 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 includes 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. The latter was closed in December last year. AFC will become a 20% shareholder in Thor after the facility closes, up from a 10% stake currently.

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 shows a robust project, mined by a contractor, with a five-year mine life, which offers excellent leverage to the gold price.

Capital expenditure for the mine is 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.

At a gold price of US$1,300 per ounce, the project's net present value (NPV) was put at US$138 million, with a payback of 1.5 years. Life of mine production was put at 393,000 ounces, at an average rate of 80,000 ounces of gold per year.

How is the company doing:

As well as the flagship open pit at Segilola, there is potential to use the same infrastructure to expand the mine underground for potential output of 30,000 ounces a year at a head grade of 6.3 g/t for an initial three years.

A preliminary economic assessment showed capex required for this project was US$13 million and the pre-tax net present value (NPV) was put at US$35 million.

Meanwhile, at the firm's Douta project in Senegal, Thor (which owns 70% of the project) has unearthed the Makosa discovery, which is being advanced to a maiden resource estimate. 

Mineralization here covers over 3 kilometres (km) of strike with several zones up to 35 metres true width. The property is parallel to Randgold’s 4.4 million ounce Massawa project, which is 5km away.

Thor also has three contiguous permits, which make up the Central Houndé project over 484 sq km in Burkina Faso. This is a joint venture with the mining titan Barrick Gold, with the latter owning 51%. Barrick can earn up to 80% of the project by funding all costs, and a minimum of US$2 million, and complete a preliminary feasibility study. There is a minimum spend requirement of US$3.5 million in the first three years.

In December last year, the firm revealed it now had more than 900 sq km of under-explored geological terrain near Segilola in Nigeria, after it boosted its footprint there with the addition of two new exploration licenses comprising 344 sq km.

Thor has a first mover advantage in Nigeria and these new licenses, represent 20km of northern strike extension from the main ore body on the project, it said.

Inflection points:

  • Segilola mine build progress
  • Gold price moves
  • More exploration results

What the boss says:

In December, at the time of the Thor's acquisition of two new exploration licenses near Segilola, Segun Lawson, the firm's chief executive, noted that the deal was part of the junior explorer’s “build and consolidate” strategy. 

“We look forward to progressing exploration programs on all our licences with the ultimate aim of delivering additional production ounces through the central Segilola process plant, which is scheduled to commence production in within 15 months from the high grade Segilola open pit, with an initial production rate of 100,000oz per annum," he said.

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