Thor Explorations (TSXV:THX) — Full Year Results

0:01 Good afternoon, and welcome to the THOR EXPLORATIONS investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be dismissed at any time by the q and a tab situated in the right corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question received in the meeting itself. However, the company can review all the questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to CEO, Shegan Lawson. Good afternoon to you, sir.

0:30 Good afternoon. Thank you for joining our webinar, which will be going through the full year results of 2023 and also touching on our q one performance to date in 2024 and also speak of our growth forecasts and targets in 2024 and beyond. By way of introduction, I'm Shegan Lawson. I'm CEO of THOR EXPLORATIONS LTD.

0:58 I have put a disclaimer in here. There will be forward looking statements in this presentation. A high level overview. THOR EXPLORATIONS is the owner and operator of Nigeria's first and only large scale commercial gold mine, the Segalola Gold Mine. It is our flagship asset, which has had two full calendar years of production, last year producing 85,000 ounces of gold for the full year. We have a guidance this year of 95,000 to a 100,000 ounces. We in in addition to the second oil project in Nigeria, we are where we are a first mover, we have picked up additional exploration ground, which we are advancing. We have also picked up over 600 square kilometers of lithium bearing exploration ground, which we are also advancing.

1:47 We have a second project in Senegal, the Duta project, which has a global resource of about 1,780,000 ounces divided fifty fifty between indicated and inferred. We have been working on the Duta project over a number of years now, and that's currently undergoing a preliminary feasibility study work stream. So operationally in 2023, we knew right from the the completion of the bankable feasibility study, we had a challenging year ahead of us at the beginning of twenty twenty three, really because of, the high strip ratio due to the nature of the geometry of the ore body, which was dipping to the south.

2:36 Meaning mining, a lot of waste material, without getting the same amount of gold. As per the DFS, we were projected to produce about 72,000 ounces. We produced ended up producing 85,000 ounces. I believe, you know, despite the challenges we had last year, it was a a success operationally, and we were glad to have completed that pushback of the Western Wall and position ourselves very strongly for the remainder of the mine life as it exists. So out of the 83 85,000 ounces we produced, we sold 73,350 ounces. That's an average realized gold price of $1,907.

3:23 Our cash operating cost was just over $1,000 per ounce, and our all in sustaining cost was $1,313 per ounce. So our EBITDA per ounce was 755, dollars per ounce. Financially, that translated to revenues of $141,245,000 with an EBITDA of $55,000,000 349,000 ounces and a net profit of just under $11,000,000. We ended the year with, just under $8,000,000 in cash, with a lot of deferred income, on on our balance sheet from the goal that we hadn't sold at that period with $11,800,000 to come in and a net debt position of of for the group of $15,900,000.

4:19 In terms of production, we were we were happy with the performance of the plant. This plant over the the over the last two years since reaching commercial production has performed very well. We we we we mined on the mining side, we mined just under 5,000,000 tons and 4,470,000 tons of of waste. We mined 485,000 tons of ore at a grade of just over two grams per ton. The processing plant, like I mentioned, has has performed well, and we processed 235,000 tons of ore at a grade of 2.85 grams per ton in q one this year with a recovery of just over 90%.

5:13 For the full year last year, the recoveries were about 93.4%, and and the the grade was 2.77 grams per ton in in q four. So the total, you know, for the for the year translating to that 85,000 ounces was deemed you know, we we we were very happy with at the at the end. What we did take the opportunity to do, which will come into significance later on this presentation, was carry out a number of plants upgrades as well last year to set us up well for the rest of the year and which we believe will keep our recoveries above 94 and a half percent and up to 97 for the remainder of the of the mine life. So we upgraded the made a number of adjustments to the leaching tank. We upgraded the illusion circuits as well. And those projects were completed last year and commissioned in in the middle of q one this year.

6:19 From an ESG perspective, we were we we continue to prioritize this, and, you know, we we were recognized, should I say, at MDABA this year for our employment practices. Obvious you know, we we employ over 98% of our workforce is local. We have carried out over 25 community projects in the course of 2023. As much as possible, we try and procure it locally with Nigeria, obviously, being it's in in Nigerian mining sector being in its infancy. We have to procure specialist consumables and reagents internationally. But where we have been able to, we've done it locally.

7:07 98% of our workforce is local. However, 29% of our workforce actually comes from the local communities within, should I say, a local from from a local region in terms of the the the mine itself. So the the host the three host communities that fall within our exploration licenses supply 29% of our workforce. We have employed our total workforce is 1,933 people, and we've kept best practice standards in terms of all our compensation. We've paid $4,300,000 in terms of crop compensation, for for land we have used. We've had zero environmental incidents since we've been there through the construction phase at and through our production, and we have recycled over 1,270,000 tons of water.

8:06 In Nigeria where we operate, I always feel it's important to include this slide because we are the only large scale gold miner in Nigeria. We are pioneering, and it's we always get, questions from investors to ask, what it's like operating here. It's it's important to note Nigeria is the major economy in Africa, should I say, with a very sophisticated banking sector and advanced oil and gas sector. It's got a stable political environment. Since we've been in Nigeria, we've seen a successful presidential two successful presidential elections, the last one last year being being completed in June without any issues or disruptions to any businesses.

8:53 With despite the mining sector being in its infancy, it does have an established industrial base, has the largest cement sector in Africa, has a huge quarrying sector, which has meant there has been a lot of transferable skills in the country that we've been able to acquire and bring bring to to our mine. It has a very good access to labor with a young, growing workforce and population. And I think the last two points are very important. There's very strong support from the mining industry, from the government. The incentives in place are very enabling. There's, for example, a five year tax free holiday from the first day of production. We have customs and duty waivers on our imports on on machinery.

9:38 We have free transferability of our currency. We have 100 ownership of our projects as well without a government free carry. So extremely enabling and competitive. And the final point is that it has immense geological potential. It's extremely underexplored. We believe there's a as a first mover, there's a lot of opportunity here to capitalize on.

10:02 So outside the operation of the Sangallala Mine itself, we're carrying out a lot of exploration. Our first priority now is the extend extension of the mine life through exploration underneath the pit. This gold deposit has never been closed out of depth. We have historically never been in a financial position to fully explore at a depth even if when you look at the mine plan, you know, and the the open pit we're mining, we have some of our best intersections are underneath the pit, you know, 4.3 meters at over 18 grams per ton, four and a half meters at 15.6 grams per ton.

10:49 So a lot of focus this year is continuing to chase these high grade shoots of depth to extend the mine life. This drilling program will be commencing this quarter, and we are we look forward to to getting the news in and releasing this to the market. One thing I will note is that we do have a preexisting underground deposit of over a 140,000 ounces grading over 6.5 grams per ton, and a preliminary economic assessment carried out on that when we did our bankable feasibility study for the open pit. So we're not starting on a blank sheet that we do have we we do know there is gold underneath the pit, and we do know it hasn't been closed out. It's also worth noting that when we carried out our our DFS gold was trading, you know, roundabout under just under $1,600 per ounce. And at today's gold price, there's a huge opportunity to to continue the open pit and prior to transitioning to to the underground.

11:54 So there are some ounces that haven't been factored into the mine plan that we believe are easy wins before transitioning to an underground deposit. So the focus this year, we believe we can extend this mine life. We have we have done it at a slower pace prior to today. We're now in a position where we're looking to put more funds to work underneath the pit, and we believe there is upside initially from extending the open pit mine life by going deeper in a wider open pit and then transitioning to an underground mine. Our second area of focus with mine life extension is the ongoing exploration programs within a 25 kilometer radius of the Saint Glolla plant.

12:45 We've had initial successes dot dotted around, and I we haven't had the the big win that we've we'd hoped for. And when I say big win, I'm saying something north of 200,000 ounces. But we have had high grade small deposits scattered around within trucking distance.

13:04 One of the things we're looking to do at the end of the year is aggregate all these studies, all these deposits into a study to assess the commercial viability of aggregating them and and putting them into the into the current mine life. Given the grade we're seeing in some of the the discoveries we've drilled out, these will certainly be beneficial to the economics of the second Lola project. This is all going on whilst exploration is going on in parallel for for larger deposits and where we're beginning to get even more of an understanding of the structural controls. Now we've opened the Segalola pit of the gold in the region. So drilling for satellite targets is ongoing as well in q two.

13:52 We believe this is one of the priorities as well this year, and this is one of the catalysts which we think will will, trigger further value for our shareholders. We look forward to updating the market with our drill results starting from this quarter as well.

14:13 I will now move out of Nigeria to Senegal where we have our second gold project, which is the Duta project. It lies in the Kiniba Inlay in that Southeast corner of Senegal close to the Mali border. Obviously, this is a much more explored region in terms of gold than we are in Nigeria. We have the due to license where we hold a 70% of the license with a local partner who has a 30% free carried up until PFS. We have had good success in Senegal, drilling out a relatively shallow resource on a seven kilometer strike length. However, we do believe there's further upside within our existing license.

15:03 We we do have soil geochemical anomalies, gold bearing anomalies where we are looking to continue drilling this year. However, the the next milestone we're working towards now is a preliminary feasibility study, which we are looking to to publish in the second half of this year. There's further exploration going on in the northern part of the license. We have had, unfortunately, to push the preliminary feasibility study back from my initial projection of q one this year whilst we've been working on looking at the metal metallurgical studies. And, also, we've been working on we on the met metallurgical studies, and, also, we've been working on increasing our oxide components of the resource.

15:55 That drilling is also ongoing this quarter, and we look forward to getting these results out to the market as early as over the next five weeks. In Senegal, we have we have increased our footprint there. We have acquired a contiguous license called the Due to West license, and this has excellent potential. It lies between ourselves and the Massawa deposit owned by, Endeavor. What we have seen here is we've already found a number of gold anomalies in soil from the work we've carried out in q one this year, and we've also seen potential extensions to the Mucosa tail. So this license contains advanced exploration targets, and it provides it has the opportunity to provide immediate additional exploration potential to the Duta project.

16:50 We've identified anomalies that run kilometers to the south as well, and we are starting or should I say, we have just started this week drilling program on the oxides here as well, which can be also added to the to the potential. So this is a project we believe has blue sky exploration potential. It's a project we believe in our portfolio has significant value potential to our shareholders that is very important for the company. And we look forward to completing the preliminary feasibility study and having an initial tangible commercial valuation and assessment of this project and and look forward to sharing that with the market.

17:37 The final piece in our portfolio is our lithium, portfolio in Nigeria, where we have created a separate subsidiary to pick up prospective ground in Nigeria. This has all come as a result of us being a first mover in Nigeria and being able to quickly identify opt opportunities that will enhance value to shareholders. We believe the the lithium potential in Nigeria is significant. Last year, we carried out an initial drilling program to assist and intersect at some very high grades at decent intersections. However, we couldn't generate enough targets to keep up with to keep up with the drilling we we were looking to do. So what we did last year, we paused on the drilling.

18:26 And since September last year to to May this year, what we have been doing is working up drill targets. I'm pleased to say we're still extremely encouraged by our lithium portfolio. We've worked up, close to 4,000 meters worth of drilling, and that drilling also starts this quarter as well. So we believe this is a project that can be fast tracked to a a resource. We are aiming to to to do that and get a a a a lithium resource. We have a target, an internal target to get a lithium resource out this year, and then this provides excellent option optionality to existing THOR shareholders without any dilution at all. So what we look forward to to doing is updating the market with the drill results and then start making some strategic decisions on NuStar Minerals.

19:22 So the outlook and catalyst for this year, we have, as a core, we are maintaining our guidance of 95,000 to 100,000 ounces for the year, at an all in sustaining cost of between 1,100 and $1,200 per ounce. Out of our senior debt facility, we took with the Africa Finance Corporation that will be fully repaid this year, and the company then is in a position to start strengthening its balance sheet and and start building up significant cash. We have drilling programs now going on through the course of the year. And as I described in this presentation, those can be categorized into the near mine drill targets, the underground drilling program, drilling in Senegal on the existing Duta project and the Duta West project, and also advancing our Nigeria lithium portfolio to a maiden resource.

20:25 I think this is this is extreme extremely we're we're extremely well positioned. Now we finished 2023, which involved mining a lot of waste and opening up the the pit at the Segolola mine to be able to mine more flexibly and efficiently through through the course of this year. We're now very well positioned where the plant upgrades have been carried out, and we expect better recoveries between 94 and a half and 97% recoveries from the plant. We're in a position where we're going to be we're now generating significant much more significant amounts of free cash than we ever had. And we're in a position where we are very well positioned to grow through the, growth of our resources, but we're very, well positioned in the fact that we're underpinned by very strong cash flow regardless of exploration success.

21:27 So that's it. I believe, we will now move to a q and a session where I'll be happy to answer any questions. Thank you. Perfect, Shagan. Thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab, which situated on the top right hand corner of your screen. We have received a number of questions for today, Shaken, and I want to start this q and a session with this one here, which reads as follows. Is THOR EXPLORATION considering exploring Northern Nigeria where this where there's more chance of gold deposits? We I think first and foremost, we are a first mover gold producer in Nigeria. So Nigeria we've taken a long term view of Nigeria. Security permissioning, there's nowhere we wouldn't look in the country.

22:12 But as a priority, we think the best value for shareholders is coming to coming via extending the mine life. We think in fact, it's a fact that we have sunk all our CapEx. We have no further significant CapEx requirements. Every additional ounce we find that can be put into the process plans is what I like to to call a super ounce. You know, very low all in sustaining cost. No CapEx requirement. No huge studies required. So our priority remains within that 25 kilometer radius. And then after that, we we we look elsewhere. Perfect. Great. Just turning to the next question. With the current cash flow, is acquiring another mining project feasible? And with the projected debt payoff, what's the next big move for THOR EXPLORATIONS?

23:01 Yeah. Look. We that that's the the beauty of the position we're in. You know, we we will be completely deleveraged, and we do have organic opportunities within our portfolio to to create value. However, with the cash generation, you know, we're we're able to look at other opportunities in West Africa and Africa as a whole that we think if they add value to shareholders, it's something we would definitely consider. It's something we discussed internally, and I think we will be in a position, probably from q four onwards to to look at these, opportunities more seriously. That's great. The next question here reads as follows. When can we next expect a dividend payment, and what are the plans to protect shareholder value?

23:50 I think it's important to note that I I am a shareholder with a with a lot of skin in the game, and I'm completely aligned with protecting shareholder value. We haven't made a a formalized dividend policy announced yet. However, we are in a position where we we're going to be building up a lot of cash and returning money to shareholders is something that's we're looking to prioritize as well. Perfect. Just moving on. Could you please give some flavor as to what the account payables include and why the outstanding sum is growing and why it is so high? Is this pattern now changing, and how do you expect pay these down in 2024? Yes. So we in q three and q four last year, we were carrying out certain upgrades to the mill, which had meant that we built up a lot of golden circuit.

24:40 I believe at the end of the the year was about 11,000 ounces. Now that those now those upgrades have been completed and the recoveries are improved, we now expect to start drawing down on these on this excess golden circuit over the course of the year and in q one next year. Coincidentally, the 11,000 ounces since q three last year, given the gold price environment we're in, has has actually increased in value, and we expect and and it's worked in our favor. So we expect to to draw down about 1,500 ounces per month, from this excess, golden circuit over the course of the year.

25:28 What was the second half of that question? And how do you okay. How how is the pattern changing? So so we saw was a the we saw an increase. There will be an increase at the end of q one in terms of accounts payable. But one thing, if looking deeper into that to understanding why that increase is there, The upgrades were completed in mid q one. So the rate of gold and circuit buildup, you will see just went from 11,000 to 12,000 ounces over the course of q one. However and you will see the the rate of the increase was a lot smaller in q one than than it's ever been. And then from q two onwards, which is now, we expect this to start coming down very, very rapidly, particularly at this increased gold price environment.

26:18 Perfect. That's great. The next question is around financial performance and asks if you can explain the difference in the financial performance between 2022 and 2023. Yes. Okay. I I I believe we went through the the numbers in the presentation, and I I would just add to to the numbers I went through that, you know, the key difference is we produced 98,000 ounces in '22 and eighty five thousand ounces in '23 and sold 72,000 ounces in '23. So our revenue was was far less than 2022 just based on the number of ounces we produced, and that trickled down to the EBITDA and net profit. Perfect. That's great. Next question here. What happens after five years at the Segalola project based on the current reserve estimation?

27:08 Yeah. So, look, if we we can look at it in two ways. One is first scenario is we do not find another ounce of gold, and we have to close the mine down. If we do that, we're looking at roundabout production of a further 300,000 ounces from today at today's gold price of even if we take a, let's say, a a $2,000 gold price, the remainder of the mine life, the all in sustaining cost is round about a thousand dollars per ounce. So, you know, it's if the gold price stays where it is, there's a we're looking at $300,000,000 of free cash flow in in this company without finding another ounce of gold. And then we it would be a good problem to have as to what to do with that cash. The hope is that we do find more gold. We extend into the underground. We transition to an underground mine, and we also bring in additional satellite deposits into into play in with with the Segolola plant to extend the mine life in in that way as well.

28:13 So I I I think as a base case, the company is very well positioned. And and, obviously, our hope is that the the Segolola mine continues to run for another ten years and more. Perfect. Another question here. I think you might have just covered part of it, but I'll read it out. Can we comment on the short remaining mine life at Segalola to 2027? Is there not merit in rapidly advancing the drill campaign there to say 10,000 or even 15,000 meters to help rapidly advance mineral resource and mine of and life of mine? Yeah. So we definitely covered part of that in the last question, but, look, there's definitely a strong rationale in in that question. And, you know, what's held us back previously is, number one, budget, and now now we've we've we're able to access a bit more budget. We we will we are advancing this at a fast faster pace.

29:09 However, you know, we've also gotta be careful as to, you know, what we're drilling. You know, it's these we're we're we're looking for intersections between three and five meters wide that are that are, you know, three, four, 500 meters deep. So we it's it there there are a lot of structural controls that come into place that we have to try and work up in terms of targeting for this drilling, which is what we're doing. And that term that's I guess that's the bottleneck one of the main bottlenecks to the rate at which we drill. But we're definitely stepping up the rate at which we drill, and, you know, we're we're quite excited by this. You know, we we think, you know, the fact we haven't closed this resource out of debt. We're not starting from a blank piece of paper. There is existing gold that's been defined by ourselves.

30:00 We think we're very well positioned for for the next phase of exploration underneath the pits. Perfect. That's great. The next question here, at what quarterly rate do you expect to repatriate the excess gold ounces out of out of circuit during 2024? Okay. I believe I I answered that in the previous question as well when I was talking about the the payables. So we will be looking at drawing down on the golden circuit at a rate of about 1,000 to 1,500 ounces per month. Perfect. Moving on. When can we expect to see a reserve estimate for the for Duta, and will this trigger the removal of the IMC's 30% free carry element? If so, what's your current thoughts on their desire slash ability to remain involved in the project?

30:50 So the the PFS and updated reserve will come out in q three. We are doing some studies on the metallurgy, which is proving to be more tricky than we initially thought. There is a there is a a very strong positive here is that the oxides, which is a a big component of this, is right from surface and very free milling, and that would make an initial starter to the to to the overall project. Some of the delays have been purely logistical in terms of moving samples around the world. How however, that has meant we've pushed our our PFS into the second half of the year. The free carry PFS will then end. It then goes to contribute to dilute.

31:43 Our local partner, you know, has a desire to continue. I'm not 100%, and I can't really speak for him on his ability to continue. But we have a very good relationship, and, you know, I'm sure he'll be fully transparent, and we'll we'll discuss how things are are gonna move forward once we get to that point. Perfect. Thanks very much. Turning to the next question. When does the lithium field come live in terms of production and sales? If you could give a bit of color around that, that'd be great. Look. This is I could just answer this is might just be my my my wish list, but I think I'm not able to say exactly when when it'll come live, but our next milestone is a maiden resource. Unlike gold, I I believe the lithium is going to be a lot easier to to mine and produce from.

32:32 We're hoping to get that maiden resource this year. Perfect. And maybe time for one more question. So how do you invest in THOR EXPLORATIONS? We're listed on both the market of the London Stock Exchange and the TSXV market of the Toronto Stock Exchange. Most brokers you know, the the the shares are are fungible across both exchanges. Most most brokers have access to our shares. So, you know, it's it's it's just through the exchanges, I I believe. Perfect. Thank you very much for answering those questions you can from investors. And, of course, the company can review all the questions submitted today, and we'll publish those responses on the investor meet company platform.

33:21 But just before redirecting investors, provide you their feedback, which you know is particularly important to the company, could I just ask you for a few closing comments? Yeah. Look. I think we are we we are very well positioned as a growth company. We're underpinned by strong production. You know, we have strengthening balance sheet. We've we've have a line of sight to paying down the accounts payables. Now we've we are drawing down on the golden circuit. We're in a favorable gold price environment. We have shareholder optionality with our lithium. We have diversification from our jurisdiction in terms of production in so in Nigeria and where we're looking at advancing a project in in Senegal.

34:07 And as a base case, you know, without any more exploration success, we I do believe we're extremely undervalued just from, free cash flow alone. And we look forward to updating the market through the course of q two and the rest of the year. Perfect, Shagan. Thank you very much for updating investors today. Could I please ask investors not to close this session as you now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations? This will only take a few moments to complete, but I'm sure it be greatly valued by Shagan and and the company. On behalf of the management team of THOR EXPLORATIONS LTD, we'd like to thank you for attending today's presentation, and good afternoon to you all.