Interim Results
Thor Mining PLC
28 February 2008
THOR MINING PLC
Interim report for the six months to 31 December 2007
Dated: 28 February 2008
Thor Mining PLC ('Thor' or the 'Company') ') the specialist metals company
focussed on advancing tungsten-molybdenum and uranium projects in the Northern
Territory of Australia, today announced its interim results for the period ended
31 December 2007.
CEO Report
The CEO presents his review together with the consolidated financial report for
the six months ended 31 December 2007.
The first half of the 2008 financial year has been one of solid progress. The
Company has continued to focus on the development of its 100% owned Molyhil
Tungsten-Molybdenum Project located in Central Australia.
The strategy of moving the Molyhil Project in to production requires an off-take
agreement for the planned production and suitable financing to be completed, as
well as securing all necessary mining approvals. Progress on all matters
continues.
During the period Thor expended in excess of £210,000 on mine development and
£430,000 on exploration of the extensive portfolio of tenements.
OPERATING REVIEW
MOLYHIL TUNGSTEN-MOLYBDENUM PROJECT
In August 2007, following the receipt of the final results from the resource
drilling program independent geological consultants completed a revised resource
for the Molyhil Project.
The revised resource represented a 55% increase in overall tonnage to 3.73
million tonnes at 0.51% combined tungsten (WO3) and molybdenum (MoS2) with a
substantial tonnage upgrade to the Measured and Indicated categories -
increasing the overall level of confidence in the resource. The revised resource
now comprises:
• Measured Resource of 530,000 tonnes at 0.42% WO3 and 0.27% MoS2, a 43%
tonnage increase over the previous Measured resource;
• Indicated Resource of 2.4 million tonnes at 0.39% WO3 and 0.17% MoS2,
a 37% tonnage increase over the previous Indicated resource; and
• Inferred Resource of 800,000 tonnes at 0.15% WO3 and 0.1% MoS2, more
than three times higher than the previous resource.
Mining Reserve
A new mining reserve was then completed. The new mining reserve is based on the
Measured and Indicated categories of the revised resource. Approximately 73% of
these resource tonnages converted to reserve status, which now totals:
Tonnes Grade WO3 Grade MoS2
Proven 456,000 0.47% 0.30%
Probable 1,690,000 0.49% 0.20 %
Total 2.15 million tonnes 0.49% 0.22%
This represents a reserve tonnage increase of 98%.
The mining reserve contains a total of 4.9 million pounds of molybdenum metal
and 700,000 mtu's of tungsten which will be produced over the expected 5.7 year
life of the open pit design.
Financial Model
The previous financial model has been updated, using new input parameters,
including costs based on a processing throughput of 400,000 tonnes per annum. A
number of assumptions were used based on current industry available information,
including prices of USD$32 per lb of Molybdenum and USD$240 per mtu, with
conservative industry discounts of 15% and 28% for concentrate sales
respectively. The financial model uses a USD$/AUD$ exchange rate of 0.85.
Importantly included in this detailed model is expected tax and royalties.
The capital expenditure totals AUD$71m, including additional working capital and
operator fleet, power and camp. This outright purchase of equipment has the
effect of significantly reducing operating costs, now estimated to be AUD$76 per
tonne of ore treated.
The net cashflow (prior to capex) of the project is estimated to be AUD$116m,
after tax and royalties.
Engineering Review
Perth-based consulting engineering group, GR Engineering Pty Ltd, has completed
a review of the capital cost estimate for the Molyhil Project. The review
included the previously announced, proposed upgrade in the processing capacity
of the plant to 400,000 tonnes per annum. This, plus the purchased additional
capital equipment has reduced forecast processing and mining operating costs.
Off-take Negotiations
Thor has focused on a strategy of securing an off-take agreement for Molyhil and
achieving assistance in funding of the project. Financing alternatives are
currently being considered with several interested parties from Australia and
China.
Environmental and Notice of Intent (NOI)
The Mining Management Plan has been submitted to the Northern Territory mines
department for approval along with the granting of the mining leases.
Native Title
Thor recently signed a landmark Native Title Mining Agreement which should
enable the Molyhil Mining Leases to be granted. The Agreement was signed with
representatives of the community of the Eastern Arrernte people of the Northern
Territory, one of the largest Indigenous groups in Central Australia.
Molyhil IP Survey
An extensive Induced Polarisation ('IP') Geophysical Survey was completed at
Molyhil. This survey successfully identified the Molyhil skarn mineralisation.
The completion of this IP survey represents the first stage in increasing the
regional exploration effort at Molyhil to target additional deposits. Chargeable
responses have been identified south, along strike beyond current drilling and
500m to the west of the Molyhil mineralisation.
The Molyhil deposit itself remains open at depth with potential to increase
resources with deeper drilling. A plan to drill these deeper targets will be
finalised once results from the underground conceptual study are completed.
Drilling of these and regional targets will commence in 2008.
Oorabra Reefs
A total of 58 rock chip samples were collected during the quarter from barite/
fluorite veining east of Molyhil near Gap Bore. Assay results have confirmed
significant barite (Ba) mineralisation with assays up to 9.37% Ba returned. Many
others range between 3.5 to 4.5% Ba. Visually massive fluorite (CaF2) was noted
in most samples. Historically values ranged from 5.7% CaF2 to 85% CaF2 (Central
Pacific Minerals). Further check assaying for other elements will need to be
carried out including F as CaF2 (fluorite or fluorspar). In 1972 Central Pacific
Minerals identified an inferred resource of 250,000 short tonnes at 37% CaF2,
this resource is excised from the Molyhil tenement EL23825.
The area in general seems to be under explored and has potential for rare earth
('REE'), barite, fluorite, gold, silver and base metals. Given the recent price
increases of barite and fluorite and the proximity to infrastructure at Molyhil
the area is worthy of further investigation.
URANIUM EXPLORATION
Hale River Uranium Project
An air core drilling program was completed in the September quarter at the Hale
River Uranium Project with a total of 28 holes completed for 1,829 metres of
drilling. Geological logging of the drill holes confirmed the presence of
downward coarsening sandy sequences and carbonaceous horizons within the
targeted channels. Results from the upper carbonaceous horizon returned values
up to 100ppm U confirming the presence of weak redox style mineralisation.
Existing anomalies need further drill testing and work to date has confirmed the
presence of suitable 'trap sites' for roll front style Uranium mineralization.
Plenty Highway Project
During the last quarter of 2007 a program of reconnaissance air core drilling
was completed at the Plenty Highway Uranium Project with a total of 16 holes
completed for 1,582 metres drilled.
A number of the holes did not reach bedrock due to the intersection of deep clay
horizons which exceeded the capabilities of the drill rig. The HoistEM data
appears to have correctly defined the extent and approximate depth of the
palaeo-channels in the area. Further analysis of the EM survey is required to
develop new drilling targets in this area.
Harts Range Project
The Harts Range project area lies on the eastern margin of the Entia Dome. The
Entia Gneiss forms the core of the Entia Dome, which is located on the western
part of the Exploration License area.
Reconnaissance rock chip samples were taken on pegmatite veins mapped at the
Daicos prospect area returned a best assay of 19.37% U from highly radioactive
samples with visible uraninite and columbite. Other highly anomalous elements
associated with these samples included assays up to 28.32% Nb and 25.52% Ta.
A total of 374-80 mesh soil samples were collected over a 100m x 50m contact
zone covering the Daicos prospect area during October. A further 24 additional
rock chip samples were collected from veining in the area. No results have been
received as yet. Drilling is being planned to determine the thickness and strike
extent of the individual zones.
Bundey River Project
An airborne EM survey was scheduled to be flown in late 2007. The survey was
completed by the end of January 2008 by Geoforce using the latest generation
SkyTEM equipment.
Montana GIS have been contracted to model the data as soon as it becomes
available.
OTHER PROJECTS
Exploration has been held up at Hatches Creek, as the Central Land Council was
unable to organise a final clearance meeting with traditional owners. This is
now expected to occur prior to June 2008.
No work has been completed at the Hatches Creek and Curtis Pound Projects.
CORPORATE
Capital Raising
During July 2007 a placement of 6,800,000 shares at 11 pence per share was
completed on the Alternative Investment Market ('AIM') of the London Stock
Exchange. These shares have been placed with Sophisticated Investors based in
the UK for trading on the AIM market.
The funds raised, approximating $1.7m after costs, and have been used to
supplement short term working capital requirements and provide additional
finance for the development of the Molyhil Project.
Yours faithfully
THOR MINING PLC
John A Young
Chief Executive Officer
15 February 2008
INDEPENDENT REVIEW REPORT TO THOR MINING PLC
Introduction
We have been engaged by the company to review the financial information for the
six months ended 31 December 2007 which comprises the Consolidated Income
Statement, Consolidated Statement of Changes in Equity, Consolidated Balance
Sheet, Consolidated Cash Flow Statement, and the related notes. We have read
the other information contained in the half-year report and considered whether
it contains any apparent misstatements or material inconsistencies with the
financial information.
This report is made solely to the company in accordance with guidance contained
in ISRE 2410 (UK and Ireland) 'Review of Interim Financial Information Performed
by the Independent Auditor of the Entity' issued by the Auditing Practices
Board. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our work, for this report,
or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in Note 1, the accounting policies are consistent with those that
the directors intend to use in the next financial statements. The condensed set
of financial statements included in this half-yearly financial report has been
prepared in accordance with the International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 31 December 2007 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
CHAPMAN DAVIS LLP
Chartered Accountants
2 Chapel Court
London SE1 1HH
15 February 2008
The maintenance and integrity of the Thor Mining Plc website is the
responsibility of the directors; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the financial
information since it was initially presented on the website.
Consolidated Income Statement
For the 6 months ended 31 December 2007
Notes £'000 £'000 £'000
Six months ended Six months ended 31 Year ended 30
31 December 2007 December 2006 June 2007
(Unaudited) (Unaudited) (Audited)
Administrative expenses (205) (130) (323)
Corporate expenses (315) (671) (1,190)
Other expenses (67) - -
OPERATING LOSS (587) (801) (1,513)
Interest receivable 50 19 126
Other income 35 - -
LOSS BEFORE TAXATION (502) (782) (1,387)
Taxation - - -
LOSS ON ORDINARY ACTIVITIES AFTER
TAXATION
(502) (782) (1,387)
Loss per share :
Basic 2 (0.36)p (0.80)p (1.27)p
Consolidated Statement of Changes in Equity
For the 6 months ended 31 December 2007
Foreign
Currency
Issued Share Retained Translation Merger Option
Capital Premium Earnings Reserve Reserve Reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 July 2006 192 1,928 (783) 59 405 100 1,901
Loss for the period - - (782) - - - (782)
Foreign currency - - - 47 - - 47
translation reserve
Total recognised income and - - (782) 47 - - (735)
expense
Share based payments - - - - - 413 413
expense
Shares issued 198 3,482 - - 1,229 - 4,909
At 31 December 2006 390 5,410 (1,565) 106 1,634 513 6,488
At 1 July 2006 192 1,928 (783) 59 405 100 1,901
Loss for the period - - (1,387) - - - (1,387)
Foreign currency - - - 372 - - 372
translation reserve
Total recognised income and - - (1,387) 372 - - (1,015)
expense
Share based payments - - - - - 683 683
expense
Shares issued 207 3,688 - - 1,229 - 5,124
At 30 June 2007
399 5,616 (2,170) 431 1,634 783 6,693
At 1 July 2007 399 5,616 (2,170) 431 1,634 783 6,693
Loss for the period - - (502) - - - (502)
Foreign currency - - - 327 - - 327
translation reserve
Total recognised income and - - (502) 327 - - (175)
expense
Share based payments - - - - - 79 79
expense
Shares issued 22 775 - - - - 797
At 31 December 2007
421 6,391 (2,672) 758 1,634 862 7,394
Consolidated Balance Sheet
At 31 December 2007
Notes £'000 £'000 £'000
31 December 2007 31 December 2006 30 June 2007
(Unaudited) (Unaudited) (Audited)
NON-CURRENT ASSETS
Intangible assets - deferred
exploration costs 4,621 3,582 4,191
Mine development costs 939 231 726
Property and equipment 3 92 24 95
TOTAL NON-CURRENT ASSETS 5,652 3,837 5,012
CURRENT ASSETS
Cash and cash equivalents 1,871 2,603 1,836
Trade and other receivables 71 94 96
Other 20 14 10
TOTAL CURRENT ASSETS 1,962 2,711 1,942
TOTAL ASSETS 7,614 6,548 6,954
NON-CURRENT LIABILITIES
Interest bearing liabilities (57) - (60)
Total non-current liabilities (57) - (60)
CURRENT LIABILITIES
Trade and other payables (133) (60) (181)
Provisions (18) - (9)
Interest bearing liabilities (12) - (11)
TOTAL CURRENT LIABILITIES (163) (60) (201)
Total liabilities (220) (60) (261)
NET ASSETS 7,394 6,488 6,693
EQUITY
Issued share capital 421 390 399
Share premium 6,391 5,410 5,616
Merger reserve 1,634 1,634 1,634
Foreign exchange reserve 758 106 431
Option revaluation reserve 862 513 783
Retained losses (2,672) (1,565) (2,170)
TOTAL EQUITY 5 7,394 6,488 6,693
Consolidated Cash Flow Statement
For the 6 months ended 31 December 2007
Notes £'000 £'000 £'000
Six months ended Six months ended Year ended 30
31 December 2007 31 December 2006 June 2007
(Unaudited) (Unaudited) (Audited)
CASH FLOWS FROM OPERATING ACTIVITIES
Operating loss (502) (782) (1,387)
(Increase)/decrease in trade and other receivables 17 (80) (56)
Increase/(decrease) in trade and other payables (191) (31) 22
Depreciation 17 4 29
Share options expensed 79 413 683
Unrealised exchange gain 327 46 372
Net cash flow from operating activities (253) (430) (337)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (10) (19) (38)
Payments for mine development (175) (231) (727)
Payments for exploration expenditure (317) (833) (1,389)
Net cash flows from investing activities (502) (1,083) (2,154)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of borrowings (6) - (5)
Issue of ordinary share capital 814 3,991 4,209
Share issue costs (18) (359) (361)
Net cash flow from financing activities 790 3,632 3,843
NET INCREASE IN CASH AND CASH EQUIVALENTS 35 2,119 1,352
Cash and cash equivalents at beginning of period 1,836 484 484
Cash and cash equivalents at end of period 1,871 2,603 1,836
Notes to the Half-yearly Report
For the 6 months ended 31 December 2007
1. PRINCIPAL ACCOUNTING POLICIES
(a) Presentation of Half-yearly results
This half-yearly report was approved by the Directors on 15 February 2008.
The half-yearly results have not been audited, but were the subject of an
independent review carried out by the Company's auditors, Chapman Davis LLP.
Their review confirmed that the figures were prepared using applicable
accounting policies and practices consistent with those adopted in the 2007
annual report and to be adopted in the 2008 annual report. The financial
information contained in this half-yearly report does not constitute
statutory accounts as defined by Section 240 of the Companies Act 1985.
This half year report does not include all the notes of the type normally
included in an annual financial report. Accordingly, this report is to be
read in conjunction with the annual report for the year ended 30 June 2007,
which was prepared in accordance with International Financial Reporting
Standards, including IAS 34 'Interim Financial Statements', and complies
with the listing requirements for companies trading securities on the AIM
market.
The half-yearly report has been prepared under the historical cost convention.
(b) Basis of consolidation
The consolidated financial statements comprise the financial statements of
Thor Mining PLC and its controlled entities. The financial statements of
controlled entities are included in the consolidated financial statements
from the date control commences until the date control ceases.
The financial statements of subsidiaries are prepared for the same reporting
period as the parent company, using consistent accounting policies.
All inter-company balances and transactions have been eliminated in full.
Notes to the Half-yearly Report
For the 6 months ended 31 December 2007
2. LOSS PER SHARE
Six months ending Six months ending Year ending
31 December 2007 31 December 2006 30 June 2007
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Basic loss per share for the period
Loss (502) (782) (1,387)
Weighted average number of shares 139,116,507 97,250,362 114,014,198
Loss per share - pence (0.36) (0.80) (1.27)
No diluted loss per share is presented as the effect of exercise of outstanding
options is to decrease the loss per share.
3. PROPERTY, PLANT AND EQUIPMENT
During the six months ended 31 December 2007 the group assets with a cost of
£92,000 (six months ending 31 December 2007: £24,000). This
comprised of motor vehicles and other equipment amounting to £54,000 and
£38,000 respectively.
4. SHARE-BASED PAYMENTS
In September 2007 a grant of unlisted options was made to staff and a consultant
of Thor Mining PLC.
The terms and conditions of the grant made during the six months ended 31
December 2007 are as follows:
Number Grant Date Expiry Date Exercise Price
2,750,000 26 September 2007 15 June 2009 11.25p
Fair value of share option and assumptions for the six months ended 31 December 2007:
Underlying security mid-market value £0.0913
Exercise Price £0.1125
Dividend rate -
Standard deviation of returns 70.00%
Risk free rate 5.15%
Expiration period (years) 1.7248
Black Scholes valuation £0.0289
The basis of measuring fair value is consistent with that disclosed in the
consolidated financial report as at and for the year ended 30 June 2007.
Notes to the Half-yearly Report
For the 6 months ended 31 December 2007
5. CAPITAL
The movements in issued share capital during the period were as follows:
31 December 2007 30 June 2007
Issued and paid-up share capital
Ordinary shares 421 399
Number £'000
Movements in shares on issue
Balance as at 1 July 2007 132,859,508 399
Share issue 7,596,395 22
Balance as at 31 December 2007 140,455,903 421
6. SEGMENT REPORTING
The consolidated entities only business segment, which relates to the
exploration and development on tenements, operates solely in Australia.
Thor Mining PLC
Company Information
Directors John W Barr (Executive Chairman)
John A Young (Chief Executive Officer)
P Mark Smyth (Non-executive Director)
Gregory M Durack (Non-executive Director)
Secretary Stephen F Ronaldson (United Kingdom)
Damian P Delaney (Australia)
Registered office 3rd Floor
55 Gower Street
London WC1E 6HQ
Australian office c/o Molyhil Mining Pty Ltd
Level 1
282 Rokeby Road
Subiaco Western Australia 6008
Telephone: + 618 9327 0900
Fax: + 618 9327 0901
Shareholder Enquires Damian P Delaney
dpd@thormining.com
Shareholders are encouraged to register on the
Company's website to receive updates by email.
Web site: www.thormining.com
Nominated Adviser and Blomfield Corporate Finance Limited
Broker London
Telephone: + 44 (0) 20 7512 0191
Fax: + 44 (0) 20 7512 0747
Auditors Chapman Davis LLP
London
Solicitors Ronaldsons
London
Hardy Bowen
Australia
Registrar Computershare Investor Services plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol BS99 7NH
Telephone: + 44 (0) 870 702 0002
Fax: + 44 (0) 870703 6116
Registered number 05276414
Enquiries:
John Young + 61 (0)419 954 020 Thor Mining PLC Chief Executive Officer
John Simpson 020 7512 0191 Blomfield Corporate Nominated Adviser
Finance Limited
Leesa Peters 020 7429 6600 Conduit PR Limited Public Relations/UK
or -
Jos Simson 020 7429 6603
Nicolas Read + 61 (0) 8 9388 1474 Jan Hope & Public Relations/Australia
Partners
Updates on the Company's activities are regularly posted on Thor's website
www.thormining.com, which includes a facility to register to receive these
updates by email.
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