16 Jan 2024 11:22A lot is happening here with gold production around 100k oz pa from Nigeria. But what is Segun up to with Douta?
The PFS has been moved back from Q4/23 to Q1/24 to give more time for a new MRE to be issued in Q1 ahead of the PFS where the resource of 1.78 million oz gold is expected to be expanded to 2 million oz at a higher grade, with more converted from inferred to indicated category and for development of the mining process with the Chinese in conjunction with the metallurgy work in Perth.
Exploration here has so far been limited but with further exploration and drilling along a 15 km mineralised corridor the resource can be expanded further.
Douta is not a straight forward development due to the refractory ore element as with the nearby Massawa development (Endeavour).
The cost of building a 100k oz pa mine at Douta will not come cheap. $130 million for Stage 1? It can be done in two stages with the oxide ore CIL processing first followed by a BIOX. Stage 1 could be financed 50% by a Finance Co and the balance through cash flow this year and next. Commence 18 month build early 2025 with completion mid 2026.
Randgold/Barrick did not develop the much higher grade and larger Massawa deposit for 10 years before selling out for $380 million in 2020.
When the PFS comes out it is sure to trigger interest from predators and in particular from Endeavour to add to their regional supply of ore to their huge operation at nearby Sabodala. The economics for the low grade ore could be improved for Endeavour by installing a crusher and ore sorter at Douta before trucking to Sabodala.
What price would Endeavour offer for Douta? $100 million?
(B2B Gold sold its 1.1 million oz, 2.3 gm/t Toega resource in Burkina Faso to West African Resource in 2021 for $45 million).
Segun says he is not looking to dilute shareholders with future development of Douta or the recent Nigerian lithium deposits but is open to partners/JV's. He has strong links to the Chinese who were contracted for construction of Segilola and are involved with the process design for Douta.
So it's likely the ball will kick off with the PFS in a couple of months time. Future development of a second mine for Thor in Senegal? Or a sale providing funds for gold and lithium mines in Nigeria where Thor is the first mover with plenty of attractive prospects.
None of this is in the sp at a near 3 year low of 21.5c.
THX Mkt Cap is $137 million.
Dual listed. Also on the UK AIM (THX) with sp 13p.
Major holdings: Segun Family 15%. Segun 4.5%.
Target Price: 30p - Canaccord Genuity 15/1/24.
If significant lithium deposits are discovered and developed Thor could become a billion dollar gold and lithium producer.