(MENAFN - ProactiveInvestors - Australia) Thor Mining (ASX: THR, AIM: THR) has increased the Spring Hill resource to 10 million tonnes at 1.4 grams per tonne (g/t) gold for 450,000 ounces (cutoff grade of 0.5g/t) or 4 million tonnes at 2.3g/t (cutoff grade 1.0g/t).
The update represents an 11% increase in tonnes and a 9.5% increase in contained metal, and importantly the resource is within 150 metres of the ground surface providing potential open cut mine extraction opportunities.
The increased resource followed the recent drilling program by Thor at Spring Hill, which is part of an earn-in work program. Spring Hill is located south of Darwin in the Northern Territory.
Mick Billing, executive chairman, commented on the positive news: "We are delighted with this increase in gold resource and the potential for future growth at Spring Hill.
"We are focussed on continuing to build the project's resource inventory, as well as investigating economic options for profitable mine development. We have more targets to test in a region of proven economic gold endowment."
Thor has now completed the exploration expenditure obligation necessary to enable the acquisition of an additional 26% of the Spring Hill project to 51%, from Western Desert Resources (ASX: WDR).
It is expected that transfer documents will be provided to the Northern Territory Department of Resources by WDR in coming weeks.
Thor plans to acquire an 80% interest in the project, and is currently evaluating development options.
Highly prospective near surface mineralisation
Another big plus for Thor and Spring Hill is that the project remains highly prospective for additional near surface mineralisation including previously identified satellite targets, along with new targets identified from evaluation of recently flown high resolution aeromagnetic (helimag) data.
The company will look to use low cost percussion drilling for first pass testing of these targets in early 2013.
Partially drilled mineralisation in several locations proximal to the main Spring Hill resource such as this high grade intercepts from Ross Mining/Billiton joint venture drilling undertaken in 1989-92.
Historic drill intercepts include:
SHRC181: 26 metres at 2.56g/t gold from 59 metres (0.1g/t cutoff), including 16 metres at 4.0g/t gold (0.5g/t cutoff); and
SHRC182: 6 metres at 0.26g/t gold from 0 metres (0.1g/t cutoff), and 13 metres at 0.77g/t gold from 26 metres (0.1g/t cutoff), including 7 metres at 1.13g/t gold from 29 metres.
With a resource of 450,000 ounces of gold and moving to 51%, this places Thor on an EV/Resource ounce of less than 15 for its share of the resource.
This is well below its gold explorer peers in Australia. On this basis, and with further exploration upside at Spring Hill, this places Thor on a highly undervalued ranking.
Throw in its Molyhil tungsten and molybdenum project and the Dundas Project within the Albany-Fraser Province, and the under-valuation become more acute. We consider that Thor offers upside to 0.02 - 0.03.