VANCOUVER (miningweekly.com) – Vancouver-based exploration junior Thor Explorations has closed a "transformational" acquisition of the Segilola gold project, considered the most advanced gold project in Nigeria.

According to the TSX-V-listed company, the project holds a compliant indicated mineral resource of 555 000 oz at a relatively high grade of 3.8 g/t.

"The Segilola gold project is now Thor's flagship project and has the potential to be a landmark project in the Nigerian mining sector. Its acquisition is also transformational for Thor, providing Thor with an excellent opportunity to develop and grow an existing high-grade resource with the potential to fast-track production.

“The acquisition is a material change in Thor's portfolio of gold exploration and development assets. Thor's immediate priority is to update the resource statement for which there is strong rationale for significant upside,” advised president and CEO Segun Lawson.

Thor has acquired Segilola Resources Operating (SROL) from Tropical Mines (TML) and Delano Gold Mining Industries (Delano). This was also made possible through Thor's acquisition of joint venture partner Segilola Gold (SGL) from Ratel Group (Ratel), a wholly owned subsidiary of TSX-V-listed RTG Mining.

Under the terms of the share purchase agreement between the company, TML and Delano, Thor acquired 100% of the shares of SROL for a cash payment of $1.3-million and the issuance of 103.85-million common shares, or 40.68%, in the company (after accounting for stock issued regarding a private placement). It also granted a 1.5% net smelter return (NSR) royalty capped at $4-million, and a further cash payment of $545 000 upon declaring commercial production at the mine.

Under the terms of the share purchase agreement between the company, Ratel and RTG, Thor bought 100% of the shares of SGL in return for a cash payment of $1.45-million, the issuance of 16.89-million shares, a 1.5% NSR royalty to Ratel capped at $3.5-million, and a payment to Ratel of a further $50 000 in cash upon closing its next financing deal or within a year from closing. It also committed a further $2-million upon completion of a financing deal for the development of full-scale mining at the Segilola project or two years following closing.

Thor advised that it had also closed a C$4.65-million private placement by issuing 40.12-million shares at C$0.115 apiece. Proceeds from the placement will be used to finance the acquisition of the Segilola project and the company's associated transaction costs to fund the initial work programme at Segilola, to advance the company's exploration project and for working capital purposes.

Located in Osun state, about 120 km north-east of Lagos, the property comprises mining licence ML41 and exploration licence EL19066. ML41 covers 1 720 ha and is contained within the larger EL19066 covering an area of 2 700 ha.

The Segilola project comprises a proposed openpit gold mining project based on an indicated mineral resource defined by a comprehensive drilling programme, including 157 drill holes totalling over 12 200 m to define 555 000 oz of gold at an average grade of 3.8 g/t when using a cutoff grade of 1 g/t gold and applying a top cut of 50 g/t. 

As part of the acquisition of SROL, two SROL nominees, Folorunso Adeoye and Kayode Aderinokun, have been appointed to Thor’s board.

The news bumped Thor’s stock up by as much as 25% on Friday to C$0.15 apiece.