Thor outlines million-oz Senegal gold producer

Thor Explorations (TSXV, AIM: THX) says its Douta gold project in Senegal might deliver 82,000 oz. of gold a year as part of the company’s aim to become a multi-asset producer.

The a new prefeasibility study envisions a $253.5-million capital cost long-life gold mine capable of producing more than 400,000 oz. at an all-in sustaining cost of $1,493 per oz. over its first four years in operation. This would generate $561 million in net cashflow to the company, according to the study issued on Tuesday.

Over the entirety of its estimated 12.6-year mine life, the Douta project is expected to produce more than 1 million oz. in total — at an average AISC of $1,890 an ounce, Thor said. The company currently operates the Segilola gold mine in Nigeria, which entered commercial production in 2021.

The Douta study confirms a “high-quality gold project with strong economics, a short payback period and long-term leverage to the gold price through its significant indicated resource base,” Thor President and CEO Segun Lawson said in the release. 

First reserves

Using an assumed long-term gold price of $3,500 per oz., the study gave the project an after-tax net present value (at 5% discount) of $633 million and an internal rate of return of 61%. Its payback period is estimated to be within one year.

Forming the basis of the study is an updated resource estimate of 50.6 million tonnes at an average grade of 1.04 grams per tonne gold for 1.7 million contained oz. in the indicated category, plus 9.3 million tonnes at 0.92 gram gold for 273,000 oz. in the inferred category.

The resource includes the project’s first probable reserves estimate, totalling 36.6 million tonnes grading 1.03 grams for 1.2 million oz.

Shares of Thor Exploration rose as much as 2.8% on Tuesday on the release, sending its market capitalization to C$1.2 billion in Toronto.

Two-stage mine

The Douta mine plan consists of two stages. The first involves mining and processing low-cost oxide and transitional ores, resulting in higher production over the initial four years. The second will use fresh “primary” ores for the next 7.8 years, with lower production.

Thor plans to identify additional oxide material for the first stage through ongoing exploration, with the aim of extending and enhancing the mine life.

“We are currently undertaking our 2026 budgeted 40,000-metre drilling program and aim to update the resource in this year’s third quarter,” Lawson said in the release.

The latest resource encompasses three prospects on the property: Makosa, Makosa Tail and the recently discovered Baraka 3. Lawson said the company already has several drill targets lined up, including the contiguous Douta West and Bousankhoba permits, to expand on the oxide resource.