The first gold has been poured at Thor Exploration’s (TSXV: THX; AIM: THX) 100%-owned Segilola open-pit mine in Nigeria and the company forecasts the mine will produce about 40,000 oz. gold this year.
Commercial production is targeted for September when the plant will be running at a processing rate of 715,000 tonnes per year; Segilola will be Nigeria’s first commercial gold mine, Thor says.
Segilola has a mine life of six years and annual production during the first five years will average 85,000 oz. gold at life-of-mine all-in sustaining costs of US$685 per ounce.
The mine has probable reserves of 4 million tonnes grading 4.02 grams gold per tonne for 517,800 ounces. The estimate used a cut-off grade of 0.30 gram gold per tonne.
At a gold price of US$1,600 per oz., an updated reserve study estimated a post-tax net present value at a 5% discount rate of $311 million and a post-tax internal rate of return of 85%.
The study also forecast an after-tax payback of initial capex ($92 million) in just over one year.
An aerial view of construction at the Segilola project. Credit: Thor Explorations.
According to Thor, the company is the only active gold exploration company in Nigeria.
Thor’s other assets in Africa include the Douta gold project in southeastern Senegal and the Central Hounde gold project in Burkina Faso.
The company has completed 10,000 metres of drilling so far this year at its 70%-owned Douta project, and plans to drill another 10,000 metres. Drill results reported so far have included 5 metres of 11 grams gold per tonne starting from 17 metres in drillhole DTRC155; 5 metres of 10.1 grams gold from 7 metres in DTRC156; and 5 metres of 3.3 grams gold from 4 metres in DTRC181. These holes were drilled at Douta’s southern Makosa Tail prospect, which the company discovered last year.
It’s 100%-owned Central Hounde project lies in the prolific Hounde belt in southwestern Burkina Faso, about 260 km southwest of Ouagadougou. The project consists of three early stage exploration permits. .
Major shareholders in Thor as of June were institutional investors with a 32% stake; the Africa Finance Corporation (17%); family offices (18%); and board and management (9%).
Over the last year Thor’s shares in Toronto have traded in a range of 16.5¢ and 44.5¢ and at presstime were changing hands at 33¢.
The junior has about 623 million common shares outstanding for a market cap of about $205.6 million.
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