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Mining Co. Hits Roadblocks but Still Meets Production Targets

Source: Streetwise Reports

 

April 25, 2023 (Investorideas.com Newswire) A Canadian mining company operating within Africa maintains interest as a potentially undervalued investment due to new discoveries and amped-up production efforts.


Thor Explorations Ltd. (THX:TSX.V; THXPF:OTCMKTS; THX:LSE) has released the results of its Q1 mining operations in Nigeria and Senegal. The company focuses on precious metals, and its current operations target the exploration of gold mines. However, Thor Explorations did find a vein of high-grade quartz during its operations this year.

The company operates two main mines: Segilola, which commenced operation in 2021, and the Douta resource, which is currently undergoing a PFS (preliminary feasibility study). Drilling is ongoing in both locations.

In an April 17, 2023 research report, Ryan Walker of Echelon Capital Markets stated that "Production and grading were both below our estimates but within the guidance range provided by management. Production was ~5% below planned production owing to challenging ground conditions - notably large boulders at the upper levels of the western push-back. Grading was weaker as ~25% of mined material (31% of ore) was from low-grade areas originally anticipated to be mined in late F2023."

Review of Results

Walker presented the key points of Thor Explorations' latest reports.

The company has multiple catalysts coming up in 2023, including plans to resume drilling at Segilola in order to increase resources that will allow it to begin an underground mining operation as well as extend the life of the mine. Thor Explorations also intends to begin drilling at the new Malete prospect, which resides within its Douta resource.

The Douta PFS is due to be completed in Q423, and the company will also spend the rest of this year exploring and acquiring new, promising properties.

While initial results were slightly below Echelon's estimates, the company intends to initiate drilling on higher-grade resource veins in order to meet its production targets by the end of 2023. Walker noted that he predicts little change in the company's production plans by stating, "F2023 production guidance range remains at 85-95Koz, tilted towards H223 as the current run rate sits at 82.4Koz (Q123)."

Potential Risks

Echelon had previously given Thor Explorations a "Speculative Buy" rating and has chosen to keep the company there after the release of the latest drilling reports. Due to impressive potential resource findings at Douta, Walker is undeterred by the hurdles the company has faced so far this year.

He also notes that the company's stock is performing well.

"We highlight that THX continues to trade at steep discounts relative to peers in terms of P/'24 CF (2.5x vs. 7.1x) and P/NAV (0.4x vs. 0.6x) while generally outperforming those peers on a CPFS CAGR (2023-25) and AISC basis. We would expect these discounts to narrow materially as THX continues to de-risk its story through the production ramp-up at Segilola," Walker reported.

While this assessment shows confidence in Thor Explorations' future, as with all investments, there is still a risk. It is possible that future impediments could slow or stop drilling in the area.

Structure and Predictions

Thor trades on the TSX Venture Exchange and the AIM segment of the London Stock Exchange.

Walker's research report shares recent rating and target price information as well as current market data on the company:

  • Rating: Speculative Buy
  • Price: CA$0.34, with a 52-week high of CA$0.35 and a 52-week low of CA$0.18
  • Price Target: CA$0.75
  • Market Cap: CA$206.3 million

Thor Explorations has 641.9 million basic shares outstanding and 669.5 million fully diluted shares outstanding. The company's cash reserves are CA$2.5 million. By the end of Q1 2023, the company had reduced its debt outstanding to CA$27.9 million.

Disclosures:

1) Cori Rupe wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.

3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures for Echelon Capital Markets, Thor Explorations Ltd., April 17, 2023

Echelon Wealth Partners Inc. is a member of IIROC and CIPF. The documents on this website have been prepared for the viewer only as an example of strategy consistent with our recommendations; it is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular investing strategy. Any opinions or recommendations expressed herein do not necessarily reflect those of Echelon Wealth Partners Inc. Echelon Wealth Partners Inc. cannot accept any trading instructions via e-mail as the timely receipt of e-mail messages, or their integrity over the Internet, cannot be guaranteed. Dividend yields change as stock prices change, and companies may change or cancel dividend payments in the future. All securities involve varying amounts of risk, and their values will fluctuate, and the fluctuation of foreign currency exchange rates will also impact your investment returns if measured in Canadian Dollars. Past performance does not guarantee future returns, investments may increase or decrease in value and you may lose money.

Data from various sources were used in the preparation of these documents; the information is believed but in no way warranted to be reliable, accurate and appropriate. Echelon Wealth Partners Inc. employees may buy and sell shares of the companies that are recommended for their own accounts and for the accounts of other clients. Echelon Wealth Partners compensates its Research Analysts from a variety of sources. The Research Department is a cost centre and is funded by the business activities of Echelon Wealth Partners including, Institutional Equity Sales and Trading, Retail Sales and Corporate and Investment Banking. Research Dissemination Policy: All final research reports are disseminated to existing and potential clients of Echelon Wealth Partners Inc. simultaneously in electronic form. Hard copies will be disseminated to any client that has requested to be on the distribution list of Echelon Wealth Partners Inc. Clients may also receive Echelon Wealth Partners Inc. research via third party vendors. To receive Echelon Wealth Partners Inc. research reports, please contact your Registered Representative. Reproduction of any research report in whole or in part without permission is prohibited.

Canadian Disclosures: To make further inquiry related to this report, Canadian residents should contact their Echelon Wealth Partners professional representative. To effect any transaction, Canadian residents should contact their Echelon Wealth Partners Investment advisor.

U.S. Disclosures: This research report was prepared by Echelon Wealth Partners Inc., a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. This report does not constitute an offer to sell or the solicitation of an offer to buy any of the securities discussed herein. Echelon Wealth Partners Inc. is not registered as a broker-dealer in the United States and is not be subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. Any resulting transactions should be effected through a U.S. broker-dealer.

ANALYST CERTIFICATION
Company: Thor Explorations Ltd. | THX-TSXV

I, Ryan Walker, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report.

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