PERTH (miningweekly.com) – An upgraded feasibility study on ASX-listed Thor Mining’s Molyhil tungsten project, in the Northern Territory, has increased the project’s economic potential.

With the projected capital expenditure remaining unchanged at A$70-million, the Molyhil mine was now expected to have a net present value of around A$67-million, as opposed to the A$28-million estimated in the original 2012 definitive feasibility study (DFS), while the internal rate of return had increased from 24% to 44%, after tax and royalty payments.

Thor said on Monday the company had incorporated an updated Joint Ore Reserves Committee-compliant reserve statement into the Molyhil DFS, while also completing the necessary mining and production schedules and capital and operating cost estimates.

The increased reserve has allowed Thor to increase the mine life at Molyhil from the original four years, to six years.

The Molyhil project was expected to deliver yearly earnings before interest, taxes, depreciation and amortisation of about A$201-million, with production costs estimated at $112/t.

“The Molyhil project has taken a significant step forward with this enhanced feasibility study. The returns are very attractive, and cash flow available from debt servicing of 2.5 times project capital costs,” said Thor executive chairperson Mick Billings.

“Substantial work has been undertaken to improve costs and we believe that Molyhil has a very attractive cost structure and a low start-up capital expense,” Billings said. He added that the company was not underestimating the task of securing project financing.

“However, we believe these upgraded project economic outcomes are compelling."

Thor would now move to secure an offtake partner for the balance of concentrate sales from the Molyhil mine, after US-based Globan Tungsten & Powders in 2013 agreed to take between 70% and 75% of the Molyhil production.

The company would also work to secure financing for project development, after which detailed engineering studies would start, along with the completion of the mine management plan and on-site civil works in preparation for mine and process plant construction.