PERTH (miningweekly.com) – ASX-listed junior Thor Mining has reported yet another cost reduction at its planned Molyhil tungsten project, in the Northern Territory.
The metals developer reported a 13% reduction in the expected operating costs at Molyhil to around A$78/t, following recent work on processing improvements and cost factors, and on extending the mine life from four to six years.
Thor told shareholders that the improvements earmarked by the recent work included a 25% reduction in the ore mass to be processed at Molyhil, which would improve the grade of the ore and allow for the inclusion of some lower-grade material previously deemed uneconomic.
This would deliver an additional 8% by value of contained tungsten and molybdenum over an initial four-year mine life, without increasing the amount of ore processed.
Thor also identified a number of cost reduction initiatives, including switching to an owner-mining model, rather than a contract model, and purchasing infrastructure, rather than leasing it.
The company said that while these activities would have implications on the capital cost of the Molyhil project, other identified savings have allowed Thor to keep the expected capital cost unchanged at A$70-million.
“This is positive news for Molyhil. The feedback from the 2012 definitive feasibility study (DFS) showed that the short mine life is an impediment to securing project finance,” said Thor executive chairperson Mick Billings.
He noted that Thor would need to re-estimate a number of cost items in the process, and recalculate its ore reserve and mining plan prior to finalising an upgrade to the DFS.
“However, it is hoped that these improvements will do much to both extend Molyhil’s mine life and significantly improve the project’s financial outcomes,” he added.
In November last year, Thor slashed its operating cost forecasts by at least 19%, while operating cost savings of up to 28% were deemed possible if production credits for molybdenum, a potential by-product from mining at Molyhil, were taken into account.
The initial DFS found that the Molyhil mine could produce some 400 000 t/y, delivering 2 200 t/y of scheelite product and 1 250 t/y of molybdenum concentrate.