MM: Can you explain your funding strategy, as investors seeing the latest placing will be keen to understand your approach to dilution and the factors that drove your decision to raise equity at what many may consider to be a low share price?
MB: We acknowledge that the past few capital raisings have been at relatively low share prices, however we have been exploring our projects and conducting feasibility studies very aggressively over the past 6months, and our cash burn rate has been very high. We need to stay solvent and with need to some funds to complete the Molyhil feasibility study. We obviously would have preferred to raise cash at higher share pricing, however the good news we have progressively released to the market has unfortunately not had the market reaction we had hoped for.
MM: Molyhill seems to be moving forward in leaps and bounds, with recent news on a resource increase, improved recovery and lowered production cost estimates? Can you summarise the factors that give you confidence that Molyhill is potentially viable and able to move forward?
MB: There are a number of factors in our favour, including the increase in the resource, recovery and operating costs. The principle reason however is the current very high global demand for tungsten. We are in the fortunate position that, right now and for the next few years, the world will be short of tungsten.
MM: Clearly value will be articulated if the company is able to secure offtake deal(s) and funding for Molyhill. What gives you confidence that both can be achieved?
MB: Again, the demand for tungsten is critical here, along with the confidence that our production costs are low enough to provide potential off-take partners assurance that we will be able to maintain supply for a reasonable period of time.
MM: You also have gold projects in the portfolio. Can you summarise for investors and potential investors why you find the projects attractive and what the key steps on the pathway to value, for the gold portfolio, are?
MB: In the first instance, the price of gold is very high and we suspect it will remain high for some time yet. Any mining company producing gold right now is likely to be making a very handy return for shareholders.
We believe that in the near (2 year) term, there is potential for us to be in production at Spring Hill, and this is a goal worth pursuing.
In the medium term there is also the prospect of much larger gold endowment at depth at Spring Hill and also at the Dundas project in Western Australia. The hope is that these will be large enough and profitable enough to deliver good returns to shareholders even at lower gold prices.
This year we will:
-
- Continue to explore close to surface at Spring Hill and Dundas, and also test for deeper mineralisation (“Callie” model) at Spring Hill.
- Conduct scoping studies and metallurgical testwork to examine the potential for early production at Spring Hill, and if the results are positive,
- We will also commence environmental studies and any necessary discussions with traditional owners to “fast track” development potential.
MM: What’s your vision for the company looking forward over the coming years, but reflecting your greater understanding of Molyhill and enhanced clarity on the gold operations?
MB: I envisage that by the end of 2013 we will be in production at Molyhil, and potentially at Spring Hill about 1 year later. These are both very good things to do. In addition however, I expect that we should be well advanced in other projects; be they Spring Hill “deeps”, Dundas, extensions to Molyhil, or other projects which are on our radar.
The objective is to build a mining house of some substance.
ENDS
DISCLOSURE: MiningMaven principals own shares in Thor Mining
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