Thor Explorations’ Douta PFS outlines emerging million-ounce gold producer

[Ben Graham]

Thor Explorations (TSXV, AIM: THX) has released the results of a pre-feasibility study (PFS) for its Douta gold project in Senegal, a milestone that the Canadian miner says puts it on the path towards a multi-asset producer.

The PFS envisions a long-life gold mine capable of producing more than 400,000 oz. at an all-in sustaining cost of $1,493/oz. over its first four years in operation. This would generate $561 million in net cashflow to the company, after repayment of project capital of $253.5 million.

Over the entirety of its estimated 12.6-year mine life, the Douta project is expected to deliver 82,000 oz. of gold per annum — more than 1 million oz. in total — at an average AISC of $1,890/oz.

Using an assumed long-term gold price of $3,500/oz., the PFS gave the project an after-tax net present value (at 5% discount) of $633 million and an internal rate of return of 61%. Its payback period is estimated to be within one year.

First reserves

Forming the basis of the PFS is an updated resource estimate of 50.6 million tonnes at an average grade of 1.04 grams per tonne gold for 1.7 million contained oz. in the indicated category, plus 9.3 million tonnes at 0.92 g/t gold for 273,000 oz. in the inferred category. The resource includes the project’s first probable reserves estimate, totalling 36.6 million tonnes grading 1.03 g/t for 1.2 million oz.

Segun Lawson, president and CEO of Thor, said the company is “delighted with the results” of the Douta PFS, as it confirmed a “high-quality gold project with strong economics, a short payback period and long-term leverage to the gold price through its significant indicated resource base.”

In a press release on Tuesday, the Thor executive noted the PFS presents a “major milestone” strategy to become a multi-asset gold miner in Africa. The company currently operates the Segilola gold mine in Nigeria, which entered commercial production in 2021.

Shares of Thor Exploration rose as much as 2.8% on Tuesday on the PFS release, sending its market capitalization to C$1.2 billion in Toronto ($880 million).

Two-phased mine

The Douta mine plan consists of two phases. The first phase involves mining and processing low-cost oxide and transitional ores, resulting in higher production over the initial four years. The second phase will use fresh “primary” ores for the next 7.8 years, with lower production.

Thor plans to identify additional oxide material for the first phase through ongoing exploration, with the aim of extending and enhancing the mine life.

“We are currently undertaking our 2026 budgeted 40,000 metre drilling program and aim to update the resource in Q3 this year,” Lawson said in the press release.

The latest resource encompasses three prospects on the property: Makosa, Makosa Tail and the recently discovered Baraka 3. Lawson said the company already has several drill targets lined up, including the recently contiguous Douta West and Bousankhoba permits, to expand on the oxide resource.