Proposed Acquisition of the D

RNS Number : 6108H

Thor Mining PLC

25 February 2010

 

THOR MINING PLC

Proposed Acquisition of the Dundas Project

The Directors of Thor Mining PLC ("Thor" or the "Company") (AIM, ASX: THR) advise that the Company has embarked on an expanded exploration and acquisition strategy as a mineral exploration and development company in accordance with its objects as set out in its Admission Document. The Board seeks to increase shareholder value by the acquisition of suitable exploration and development projects and will focus initially on Western Australia with an emphasis on new mainstream commodity opportunities in addition to Thor's historic portfolio of projects in the Northern Territory.

Implementation of this strategy has commenced with Thor's proposed acquisition of the Dundas gold exploration project in the broader Norseman area southeast of Kalgoorlie in Western Australia. A number of potential other acquisitions, focussing primarily on gold, are currently under review.

The Board identified the need for a new exploration direction for Thor as current global demand, depressed forward prices and the strength of the Australian dollar mitigate against the near term commercial development of the Company's Molyhil tungsten and molybdenum project off the Plenty highway, north-east of Alice Springs in the Northern Territory.

The Company will keep the market informed of other developments as they occur.

The Dundas gold project (the "Dundas Project")

The Directors of Thor are pleased to advise that terms have been agreed for the proposed acquisition of 3 tenements covering 340 square kilometres in the Western Australian Goldfields approximately 100 kilometres southeast of Norseman. The tenement package comprises exploration licences E63/872, E63/1101, and E63/1102.

Geologically, the project lies within the Albany-Fraser Province, an area of more than 500km x 100km situated at the south-eastern margin of WA's gold-rich Yilgarn Province.

The gold potential of the Albany-Fraser Province has been revolutionised in the past 10 years by the discovery of the circa 5 million ounce Tropicana gold deposit and numerous other gold occurrences of economic potential. Tropicana has been shown to be just one of a cluster of deposits and to extend for at least one kilometre down the dip of the enclosing strata or structure. With the exception of an area surrounding the Dundas Project (Dundas Nature Reserve) which was quarantined from exploration from 1996 until late 2006, the Province is entirely controlled by significant gold mining entities such as AngloGold, Newmont, Dominion, Teck-Cominco, WA Mining, an investor, Mr Mark Creasy, and Triton Gold Limited.

Until the Tropicana discovery, the Albany-Fraser Province was little explored for gold, its potential being hidden by perceived unfavourable geology, very poor outcrop, and in part, burial under younger sediments.

Location

The Dundas Project area is located within the general southerly strike extension of the most gold-rich part of the Yilgarn province, the Wiluna-Kalgoorlie-Norseman greenstone belt. Thor Directors believe this may impart an enhanced prospectivity to the section of the Albany-Fraser Province containing the project area.

In addition, the tenements are located in a part of the Albany-Fraser Province where the south-westerly grain of the Province is displaced south-eastwards by about 50km. The overprint of a south-easterly structure appears to mimic elements of the Tropicana geology and apparently creates opportunities for dilation of the rock sequence - a structural element generally favourable for mineralisation.

Prior Exploration

A limited (forty sq km) program of surface geochemical exploration for gold conducted by BHP within E63/872, revealed gold anomalies comparable with those associated with gold mineralisation elsewhere in the belt. These are therefore drill ready and untested. The remaining 335 sq km of the Dundas Project is unexplored for gold.

A more extensive program of surface geochemical sampling conducted to the north and west of E63/1101, revealed similar anomalies. One of just three RAB drill holes into these anomalies reported a bottom-hole sample of 1.1 g/t gold, confirming the existence of gold mineralisation as a source of the gold anomalies, greatly increasing the prospectivity of the whole area.

The tenements lie within the Dundas Nature Reserve, to which access for mining has only recently been restored.  A consequence of this is that the area has never been explored in detail and no drilling has been conducted within the boundaries of these tenements.

Agreement Terms

Terms and conditions of the Dundas Project acquisition agreement are as follows:

·      The initial acquisition of a 51 % Interest in the tenements for AUD$100,000 upon signing the acquisition agreement;

·      Option Stage 1 - An additional 9% interest in the tenements exercisable by Thor by the issue to the vendors of 45 million fully paid ordinary shares in Thor within 5 months of the date of the acquisition agreement, unless parties agree otherwise;

·      Option Stage 2 - An additional 20% interest in the tenements exercisable by Thor on or before 30 September 2012 by the allotment to the vendors of fully paid ordinary shares in Thor equal in value to A$2 million provided Option Stage 1 has been exercised and a minimum spend of AUD$1million on exploration on the tenements; and

·      Option Stage 3 - Thefinal 20% interest in the tenements exercisable by Thor at the earlier of: (i) 60 days following an additional spend of AUD$1million on exploration on the tenements, or: (ii) the 30 September 2014 by the allotment to the vendors of fully paid ordinary shares in Thor equal in value to AUD$2 million provided Option Stage 1 and Option Stage 2 has been exercised.

If Thor elects not to take up its rights to increase its equity interest to 80% & 100% respectively, then the parties will form a joint venture. The vendors may then sell their interests with Thor holding first right of refusal. In the event that the vendors do not sell their interest and are diluted to 5% collectively, they will revert to a 1.5% net smelter interest.

From completion of the Acquisition Agreement until either Thor becomes the registered holder of 100% interest in the tenements or the commencement of the Joint Venture Thor has undertaken to sole fund exploration of the tenements and to keep the tenements in good standing.

The Directors believe that further fund raisings will be required as the Dundas Project develops through Option Stages 1 to Option Stage 3 and other projects are progressed.

The transaction is subject to approval of Thor's shareholders at a general meeting of the Company.

The information in this report that relates to exploration results, mineral resources or ore reserves is based on information compiled by Trevor Ireland, who is a Fellow of The Australasian Institute of Mining and Metallurgy. The services of Mr Ireland are engaged by Thor on a contractual basis. Trevor Ireland has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Trevor Ireland consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

Commenting on the proposed transaction, the Chairman of Thor, Mr Mick Billing, said today "we are delighted to have been able to access this prime package of gold prospective exploration territory with significant upside and in a broader gold province well regarded in Western Australia's resources sector. While our Molyhil tungsten/molybdenum project in the NT is on hold due to depressed metal prices, we have adopted an invigorated growth strategy based on mainstream commodities in proven mineral provinces to explore for very large gold deposits."

Enquiries:

Mick Billing	+ 61 (0)414 741 007	Thor Mining PLC	Executive Chairman
Laurie Ackroyd	[phone]	Thor Mining PLC	CFO/Company Secretary
John Simpson	+ 44 (0)20 7776 6550	Daniel Stewart & Co. plc	Nominated Adviser

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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