TSXV-listed Thor Explorations has capitalised on its first-mover advantage in the under-explored country of Nigeria.
It has achieved this by not only advancing its flagship Segilola gold project but by also acquiring four additional prospective exploration licences covering 337 km2 as a means to build a strong future project pipeline in the country, says CEO and President, Segun Lawson.
This article first appeared in Mining Review Africa Issue 9 2018
Thor Explorations first captured the attention of the mining and investment community in February 2018 when it won the Investing in African Mining Indaba 2018 Investment Battlefield competition and was recognised as the most promising emerging mining company, out of 22 other junior mining companies who participated in the battlefield.
Since winning the award, Nigeria-native Lawson and his team have been hard at work advancing the Segilola gold project, which is currently at definitive feasibility study (DFS) stage and considered as Nigeria’s most advanced gold project.
Segilola – the flagship
Located in Osun State, Nigeria approximately 120 km from Lagos, Thor Explorations first acquired the 100%-owned Segilola project in August 2016 and renewed the project’s mining licence (for 25 years) three months later in November 2016.
The company spent the first half of 2017 reviewing existing drill data and carrying out its own proof of concept diamond drill programmes.
This was followed by the release of a maiden mineral resource estimate for Segilola in September which confirmed a JORC-compliant indicated resource of 556 000 oz grading at 4.2g/t of gold, an inferred resource of 306 000 oz grading at 4.7g/t of gold and a probable reserve of 448 000 oz grading at 4.2 g/t of gold.
This was followed by the completion of the prefeasibility study (PFS) in October 2017, which confirmed the potential to establish an open pit gold mine with a 12-15 month construction period and a seven year mine life at a cost of US$71.4 million.
The project PFS was modelled on a 500 000 tpa processing plant consisting of a conventional crushing circuit, single stage grinding, carbon-in-leach, elution, electro-winning and smelting to produce 85 000 ozpa to 95 000 ozpa of gold dore at an all-in sustaining cost of US$682/oz, an after tax NPV (5%) of $138 million and IRR of 53%.
Thor Explorations spent the majority of 2018 till now undertaking definitive feasibility study work and pre-development work-streams aimed de-risking and optimising the project following the completion of the PFS.
In doing so, the company has undertaken open pit infill resource and metallurgical drilling, geotechnical drilling as well as additional resource drilling on identified opportunities as well as detailed fixed-wing LIDAR and photo-imagery survey of the Segilola mining and exploration licenses, which it completed in May.
A metallurgical test work programme using a representative bulk sample totalling over 500 kg of diamond core was also completed in May this year and confirmed a 77.5% average gravity recovery and a 98.9% total recovery at 106 µm grind size and 24-hour cyanide leach.
“The metallurgical test work results will also be used to further streamline and optimise the processing flowsheet in the DFS,” explains Lawson.
“The DFS, which remains on time, will be completed in the fourth quarter of 2018 and Thor aims to go straight into the 12-15 month mine construction period expected to begin at the start of next year,” says Lawson adding that Thor Explorations will pour first gold at Segilola in the first quarter of 2020.
Following completion of the DFS, Lawson says that the company will continue to assess the resource potential at depth by undertaking a concurrent preliminary economic assessment to determine the potential for a future transition of operations from open pit to underground, extending the mine life beyond the PFS mine plan of seven years as the resource has not yet been closed out at depth.
In addition to the DFS work and near term development of Segilola, its remains a highly prospective exploration project and Thor Explorations is therefore continuing with exploration work to investigate identified geochemical anomalies on strike, assessing the potential for near pit satellite opportunities.
Before construction can begin, Thor Explorations must bring the project to financial close, which it aims to do so before year end, in a jurisdiction that remains tough to fund, particularly because of the infancy of its mining sector.
“The total capital raise required to take the project to financial close is between $75-80 million – $50 million of which will be debt, and the remainder in equity.
“Having raised $4.23 million in March and an additional $8 million in equity in August, both via a private placement of shares, we plan to raise the outstanding capital when we go to market in Q4 this year,” Lawson notes.
Fully cognisant of both the Nigerian mining industry’s opportunities and challenged, Lawson believes that if Segilola was anywhere else in the world it would already be a big hole in the ground, he enthuses.
Senegal in close second
The Douta project was the first project acquired by the company, while still called African Star Resources – and essentially kicked off the development of the company.
Located within 5 km of Randgold Resources Massawa project within the Kéniéba inlier, in eastern Senegal, Douta covers an area of 103 km2.
Thor Explorations paid local owner, International Mining Company SARL, part cash and part shares for a 70% stake in the project – which it raised by means of a reverse takeover with Canadian company Thor Explorations – and so Thor Explorations was born.
In July 2017, the explorer completed a 2 000 m RC drilling programme on the Makosa prospect within the Douta project, which successfully identified a number of wide, near-surface significant intersects – most notably 9.5 m at 8.1g/t gold including 6.9 m at 10.9g/t gold.
Thor Explorations has increased the strike length at Douta to 3.1 km and has also drilled a second target within its licence where it recently announced a second potential discovery.
“The plan with Senegal is to get to a maiden resource this year and establish some value in the country,” says Lawson.
Burkina Faso – an untapped bounty
About three months after the Douta project was acquired, Thor Exploration’s pegged some land in south west Burkina Faso and was awarded the licenses for these projects in November 2011.
The Central Houndé project consists of three contiguous three grassroots exploration permits, namely Ouéré, Bongui and Legue, covering 474 km2 in the prospective Houndé greenstone belt, south west Burkina Faso are being advanced through an earn-in agreement with Acacia Mining.
As per the earn-in agreement signed in 2015, Acacia Mining, which currently satisfied all the conditions to earn a 51% stake in the project, may increase its share to 80% by funding all costs (at a minimum $2 million) and on completion of a PFS.
Should the project progress to construction, Acacia will be liable to pay a decision to mine payment to Thor Explorations of $1 million.
“While too early to tell which direction the project may go, the project offers good option value for Thor Explorations either way,” says Lawson.