Febuary 4, 2019 Shares Outstanding: 370,682,965
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Suite 1010, 1075 West Georgia Street
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NEWS RELEASE
NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR
DISTRIBUTION TO U.S. WIRE SERVICES
FOR IMMEDIATE RELEASE TSXV: THX
Febuary 4, 2019 Shares Outstanding: 370,682,965
Vancouver, British Columbia
THOR EXPLORATIONS COMPLETES ROBUST DEFINITIVE FEASIBILITY STUDY FOR THE
SEGILOLA OPEN PIT GOLD PROJECT AND POSITIVE PRELIMINARY ECONOMIC ASSESSMENT
FOR THE SUPPLEMENTARY SEGILOLA UNDERGROUND GOLD PROJECT
Highlights:
- Segilola Open Pit Project: Post-tax NPV5% $138m, 50% IRR and Payback in under 1.4 years
- Segilola Underground Project demonstrates clear upside potential – accretive NPV5% of $35m
- Thor is at an advanced stage of negotiations with potential project finance lenders
- Updated presentation now available on Thor’s website https://www.thorexpl.com
Thor Explorations Ltd. (TSX VENTURE: THX) (“Thor” or the “Company”) is pleased to announce positive
results for its Independent Open Pit Definitive Feasibility Study (“DFS”) at its 100% owned Segilola Gold
Project (the “DFS Project”) in Nigeria.
Thor is also pleased to announce that it has also completed an Independent Preliminary Economic
Assessment (“PEA”), undertaken by Roscoe Postle Associates Inc., for a proposed supplmental Underground
Project (the “UG Project”) at Segilola.
The DFS Project comprises an open pit mine and will include the construction of a new 625,000 tonnes per
annum (“tpa”) processing plant, which would consist of a conventional crushing circuit, two stage grinding,
gravity, carbon-in-leach, elution, electrowinning and smelting to produce gold dore. The DFS envisions a
construction start date in Q2 2019 and an 18 month construction period with an initial 5 year mine life.
The UG Project considers an initial 3 year underground operation which can be brought on during the open
pit mine life to supplement the open pit ore with high grade underground production. The deposit remains open
below the resources considered in the UG Project.
Figure 1: Final Open Pit Mine Design with Preliminary Underground Design
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The DFS Project description conforms with the Project’s existing 25 year Mining License “ML41” (renewed in
September 2016) and approved Environmental Impact Assessment (“EIA”).
DFS and PEA Highlights
All amounts stated in this news release are in US dollars (“$”) unless otherwise stated
Base Case is stated at a gold price of $1,300
PEA results are stated on an accretive to DFS basis unless otherwise stated
Table 1: Key Points
Feasibility Study
Segilola Open Pit Project
Preliminary Economic Assessment
Segilola Underground Project
Cashflow $178m $43m
NPV Pre-tax NPV5% of $138m
Post-tax NPV5% of $138m
Pre-tax NPV5% of $35m
Post-tax NPV5% of $35m
IRR Post-tax IRR of 50% N/A
Payback Post-tax 1.4 years on initial capital N/A
Capex Pre-production capital of $87m Development capital of $13m
Production Average of 80,000oz LOM Average of 33,000oz per annum, LOM
Combined average of 100koz per
annum, LOM
Production Cost LOM All-in sustaining cost of $662/oz LOM All-in sustaining cost of $756/oz
Mine Life 5 years N/A
Probable Mineral
Reserves
3.0 Mt @ [4.20 g/t Au containing
405,600oz Au at 0.77 g/t cut off
N/A
LOM Recoveries 97.0% for 393,400oz 96.0% for 102,000oz
Segun Lawson, President & CEO, commented:
“We are excited to kick off the year with a robust Definitive Feasibility Study of the Segilola Open Pit Project
and the Preliminary Economic Assessment of the Segilola Underground Project. Both these studies confirm
the robustness of Segilola and the significant upside potential that exists.The Feasibility Study confirms that
the initial Segilola Open Pit is a high margin gold project generating a robust post-tax IRR of 50% with an
excellent 1.4 year payback and an NPV5% of $138m with excellent leverage to gold price sensitivity. The
Underground Preliminary Economic Assessment demonstrates an initial view of the potential of the deposit
which remains open at depth whilst already potentially providing an additional NPV5% of $35m to the Project.
We are also pleased to announce that the Company is in advanced discussions with project financiers and is
proceeding with EPC turnkey documentation with its preferred EPC contractor Norinco International (who
assisted the Company in the development of the Feasibility Study), with a view to commencing construction
at Segilola in Q2 2019.
Exploration drilling on additional targets within the Exploration License is ongoing and the Company considers
that strong potential exists to realise exploration upside as we continue to explore for potential satellite
deposits.
The Government of Nigeria is strongly promoting the growth of the mining industry and is offering a compelling
fiscal incentive program to support companies in the development of the Country’s mineral resource sector.
The Company is highly appreciative of the continued support provided to it by the Government of Nigeria.”
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Notes:
1. The Mining Sector is designated a Pioneer Industry approved by the Federal Executive Council. Pioneer status
is a fiscal incentive provided under the Industrial Development (Income Tax Relief) Act (”IDITRA”), Laws of the
Federation of Nigeria. Eligible companies operating in designated pioneer industries, which apply for and are
granted pioneer status, are entitled to income tax holiday for up to 5 years – 3 years in the first instance, renewable
for 2 additional periods of 1 year. In addition to income tax holiday, pioneer companies enjoy other benefits, such
as the exemption of dividends paid out of pioneer profits from withholding tax. This Incentive scheme has been
in place and functional for over 14 years.
2. According to the Nigerian Minerals and Mining Act, all operators in the mining industry are exempted from
payment of custom and import duties in respect of plant, machinery, equipment and accessories imported
specifically and exclusively for mining operations.
3. The nameplate capacity of the Segilola process plant will be 650,000tpa, which is above the DFS Project
production throughput of 625,000tpa.
Figure 2: Gold Price Sensitivity
Gold Price (USD/oz) USD 1,200 USD 1,300 USD 1,400
After Tax
Life of Mine Cash Flow (USDm) 138 178 217
NPV5% (USDm) 104 138 171
IRR (%) 40% 50% 60%
Payback (years) 2.0 1.5 1.0
Figure 3: Discount Rate Sensitivity
177.8
169.0
160.6
152.7
145.2
138.0
131.2
124.7
118.6112.7107.0101.796.691.787.082.578.374.270.366.562.9
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
200.0
0%1%2%3%4%5%6%7%8%9%10%11%12%13%14%15%16%17%18%19%20%
NPV in Millions US$
Discount Rate
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Mineral Resource Estimate
The Mineral Resource (Table 2) is reported according to the optimisation parameters shown in Table 3 is
inclusive of all Indicated and Inferred material.
Table 2: Segilola Resource Estimate, January 2019
Zone Cut Off Category Tonnage Grade Contained Metal
(g/t Au) (Mt) (g/t Au) (000 oz Au)
Open Pit 0.64 Indicated 3.0 4.5 441
Open Pit 0.64 Inferred 0.3 6.8 73
Notes:
1. Based on the ‘reasonable prospects of economic extraction’ test as required by the CIM, the DFS Mineral
Resources are reported using an optimised pit shell, as defined by the parameters shown in Table at a cut off
grade of 0.64g/t gold.
2. Estimation contrained by wireframes defined by nominal 0.5g/tAu lower cut off.
3. The Mineral Reserve estimate has been prepared by Mr Chris Speedy (MAIG,#5349), of Auralia Mining
Consulting Pty Ltd, who is a qualified person under NI 43-101
4. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.
5. The DFS open pit Mineral Resource estimate is reported from an Ordinary Kriged block model.
6. Unless otherwise noted, the Company's Mineral Resources are estimated using appropriate lithological
interpretations, grade compositing and grade estimation techniques.
7. The Company has adopted industry-standard procedures for sampling, data verification, compiling, interpreting
and processing the data used to estimate Mineral Reserves and Mineral Resources.
8. DFS Mineral Resources are inclusive of DFS Mineral Reserves.
9. Numbers may not sum due to rounding.
Table3: Optimisation Parameters applied for Mineral Resource reporting
Whittle Input Parameter Value Unit
Overall Pit Slope 50 West/42 East degrees
Surface Mining Cost (Waste) 2.67 US$/t
Mining Dilution 10 %
Mining Recovery 95 %
Processing Cost 19.40 US$/t ore
Processing Recovery (Au) 97 %
G&A Cost 5.77 US$/t ore
Grade Control 0.34 US$/t ore
Rehandle 0.65 US$/t ore
Refining 0.88 US$/t ore
Discount Rate 8 %
Metal Price Gold 1,500 US$/oz
Selling Cost/Royalties* 14.88 US$/oz
DFS Open Pit Mineral Reserve
The DFS open pit Mineral Reserve constitutes a selected portion of the DFS open pit Mineral Resource which
is economically and practically mineable under the specified project parameters as shown in Table 4 The
economic cut-off grade calculated from these parameters is 0.77g/t gold. The Mineral Reserve has been
defined in accordance with NI43-101 guidelines, which excludes Inferred Mineral Resources.
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Table 4: Segilola DFS Open Pit Reserve Summary, January 2019
Zone Category
Tonnage Grade Contained Metal
(Mt) (g/t Au) (000 oz Au)
Open Pit Probable 3.00 4.20 405
Total 3.00 4.20 405
Notes:
1. The DFS open pit Mineral Reserve has been formulated as part of the DFS, and is based on open pit mine
designs for which a mine production schedule and economic analysis have been conducted. The DFS open pit
Mineral Reserve is reported using an economic cut-off grade of 0.77g/t gold
2. The DFS open pit Mineral Resource and Mineral Reserve estimates have been prepared independently in
accordance with the classification criteria of the National Instrument 43-101 Standards of Disclosure for Mineral
Projects ("NI 43-101") and in accordance with the CIM Standards on Mineral Resources and R eserves,
Definitions, and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by the
CIM Council.
3. The Mineral Reserve estimate has been prepared by Mr Anthony Keers (MAusIMM, CP Mining), of Auralia Mining
Consulting Pty Ltd, who is a qualified person under NI 43-101.
4. The Mineral Reserves are estimated using appropriate cut-off grades based on an assumed long term price of
$1,250 per ounce of gold. Mineral Reserves are estimated using appropriate process recoveries, operating costs
and mine plans that are unique to this project and include estimated allowances for dilution and mining recovery.
Table 5: Parameters applied for Open Pit Mineral Reserve reporting
Parameter Value Unit
Surface Mining Cost (Waste) 2.67 US$/t
Mining Dilution 10 %
Mining Recovery 95 %
Overall Processing Cost 27.04 US$/t ore
Processing Recovery (Au) 97 %
Discount Rate 8 %
Metal Price Gold 1,250 US$/oz
Selling Cost/Royalties* 14.88 US$/oz
* Additional royalties are payable to previous project owners TML (Tropical Mines Limited) - 1.5% capped at US$4M and
Ratel Group – 1.5% capped at US$3M. These royalties were not applied in the pit optimisations but were applied in the
economic analysis.
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Underground PEA
As part of a parallel PEA study an underground Resource Estimate (Table 3) has been prepared by RPA Inc
based on an independent, underground model.
Table 6: Segilola Initial Underground Resource Estimate
Zone Cut Off Category Tonnage Grade Contained Metal
(g/t Au) (Mt) (g/t Au) (000 oz Au)
Underground 2.58 Indicated 0.1 9.4 28
Underground 2.58 Inferred 0.35 7.9 90
The preliminary economic assessment is preliminary in nature, that it includes mineral resources that are
considered too speculative geologically to have the economic considerations applied to them that would
allow them to be categorized as mineral reserves, and that there is no certainty that the preliminary
economic assessment will be realized, and mineral resources that are not mineral reserves do not have
demonstrated economic viability.
Notes:
1. Estimation contrained by wireframes defined by nominal 2.5g/tAu lower cut off.
2. Reported resource is within stope wireframes for a price of US$1500/ozAu.
3. Resource grade cut off of 2.58g/tAu
4. Process recovery 97%, total operating cost $95.6/t
5. Average stope thickness 3.2m, Level interval 15m, maximum stope width 7m
6. Crown pillar 20m
7. Minimum mining width 2m, hangingwall dilution 0.2m, footwall dilution 0.2m
8. The Mineral Resource has been prepared independently in accordance with the classification criteria of the
National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") and in accordance with
the CIM Standards on Mineral Resources and Reserves, Definitions, and Guidelines prepared by the CIM
Standing Committee on Reserve Definitions and adopted by the CIM Council.
9. The Mineral Resource estimate has been prepared by Jack Lunnon of RPA Inc, who is qualified person under NI
43-101.
Figure 4 : Preliminary Underground Design
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Services
Electrical power will be generated on site. During construction a 400 kW/400 V and a 200 kW/400 V diesel
generator will be installed by the contractor at the processing plant and at the camp. The permanent main
power supply for processing will be provided by seven 1.2 MW Compressed Natural Gas (CNG) generators,
five of which will be on duty and two on stand-by. Emergency power will be provided by a 640kW/400V 50Hz
diesel powered generator. Diesel and Compressed Natural Gas (CNG) will be delivered to site by road tanker.
For the Open- Pit Project alone, the treatment of the ore will result in the production of approximately 625,000t
of tailings per annum. The tailings will be pumped as a slurry to a tailings management facility (“TMF”). The
TMF will be located 1.3 km southwest of the process plant. The TMF consists of a single valley style
embankment (North) and two small (less than 5 m) saddle dams (West and East). The TMF has been
designed to International Standards.
Water for the plant will be provided from the plant feed water dam to the east of the processing plant, via a
raw water pond. Water will be sourced as reclaimed water from the TMF as well as supplemented from the
raw water system
Some raw water will be treated and upgraded to potable water standards, with a further portion treated to non-
potable standards suitable for domestic use other than drinking.
Figure 5: Proposed Site Infrastructure Layout
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Exploration Target
In addition to the classified resources and reserve, Thor believes that there is potential to extend the known
mineralised inventory through further exploration campaigns. In accordance with Section 2.3 (2) of the National
Instrument 43-101 Standards of Disclosure for Mineral Projects this potential is expressed within ranges (Table
7).
Table 7: Segilola Initial Underground Exploration Target
Range Tonnage Grade Contained Metal
(Mt) (g/t Au) (1000oz Au)
low 1.1 9.4 330
high 2.5 7.9 630
• Potential quantity and grade is conceptual in nature
• There is insufficient exploration to define a mineral resource
• It is uncertain if a mineral resource estimate will be delineated
• Basis of Exploration Target
• Mineralisation is not closed off at depth and along strike beyond the limits of the PEA
underground resource (Figure 3)
• Targets include high-grade northern shoots
• Tonnages estimated from unclassified resource block model reported beneath Whittle shell and
projection of TVM
• Low grade range assumed from underground indicated grade
• High grade range assumed from underground inferred grade
Figure 6 : Gram-metres Longitudinal Sections for Lodes 100 and 200 showing mineralised trends
external to PEA underground resource
Geology
The project area is located in the crystalline basement complex rocks of southwestern Nigeria within the Upper
Proterozoic rocks of the Ilesha schist belt which formed part of the Pan African mobile belt. At Segilola, gold
mineralisation is localised within structural “compartments” defined by the intersection of two main controlling
features: a westerly-dipping footwall calc-silicate suite of rocks and sub -vertical shear zones. Gold
mineralisation is associated with stacked set of steep westerly-dipping, north-trending pegmatitic quartz-
feldspar veins that intrude variably deformed gneissic rocks and schist. The vein system, which outcrops in
places, extends over a strike length of about 2,000m and downdip to nearly 400m from surface. The gold
itself is often coarse and visible in diamond core. There are opportunities to extend the known resource both
along strike and down-dip.