Thor Exploration Delivers Dividends While Drilling for Growth Across West Africa

• Thor Exploration operates Nigeria's first large-scale commercial gold mine (Segilola), producing ~85,000 oz/year with strong margins due to 93% recovery rates and low AISC positioning
• Company is evaluating optimal transition from open-pit to underground mining at Segilola, with continued drilling revealing mineable widths and grades below current pit design amid rising gold prices
• Advanced Douta project in Senegal progresses toward Q4 PFS with 1.78M oz global resource, targeting 100-120K oz/year production using conventional CIL processing
• Côte d'Ivoire portfolio shows promise with high-grade intersections at Guitry project (targeting maiden resource by year-end) and strong geochemical results at Marahui (5km anomaly)
• Initiated quarterly dividend program while simultaneously increasing exploration budgets across all jurisdictions, demonstrating balanced capital allocation in high gold price environment

Thor Exploration (LSE:THX) represents a noteworthy West African gold story transitioning from single-asset producer to multi-jurisdictional developer. CEO Segun Lawson's recent interview provides crucial insights into the company's strategic positioning during a period of record gold prices and operational expansion.

Nigerian Operations: Maximizing Segilola's Potential

The Segilola gold mine in Nigeria continues to serve as Thor's cash engine, producing approximately 85,000 ounces annually. The operation benefits from exceptional metallurgical characteristics, achieving 93% recovery rates with 60-70% coming from gravity concentration. This operational efficiency, combined with Nigeria's favourable energy costs through compressed natural gas (CNG) usage, positions Segilola in the lower percentiles of global all-in sustaining costs (AISC).

The mine currently faces a critical inflection point regarding its transition from open-pit to underground operations. Lawson explains the strategic considerations: 

"At these gold prices, the logic is that we will continue even if it's just for a small amount to take some more out as an open pit before transitioning to underground." 

The company has released two sets of drill results demonstrating continued mineralization below the designed pit, with mineable widths suitable for both open-pit and underground extraction methods.

Technical studies planned through year-end will determine the optimal transition point, balancing the high strip ratio constraints of the narrow orebody against favourable gold pricing. The competent granite diorite hanging wall provides excellent geotechnical conditions for future underground development, with structural studies already completed to support this transition.

Operational Optimization and In-House Capabilities

A significant operational development involves Thor's decision to acquire and deploy its own drilling rigs. This strategic shift from third-party contractors addresses multiple operational inefficiencies. Lawson notes: 

"Being able to fork out the CAPEX to purchase these rigs and deploy them in the long run ends up being cheaper than using third party contractors."

The company now operates three owned rigs alongside two contractor rigs, providing unprecedented drilling capacity. This enhanced capability enables faster exploration programs, improved flexibility in target selection, and the ability to re-enter historic holes with wedges for directional drilling. The operational benefits extend beyond cost savings to include accelerated resource definition and reduced mobilisation delays.

Senegal Development: Douta Project Advancement

The Douta project in Senegal represents Thor's primary growth catalyst, with a global resource of 1.78 million ounces progressing through preliminary feasibility study (PFS) completion scheduled for Q4 2025. The incorporation of Baraka 3 resources into the mine plan enhances project economics by providing higher-grade material for the front-end of production.

Lawson indicates the PFS will target production of 100-120,000 ounces annually, utilising conventional carbon-in-leach (CIL) processing for oxide material. The metallurgical work suggests straightforward processing characteristics without refractory or problematic elements. 

"We're looking to increase that 900,000 [indicated] number as a reserve and then come up with a mine plan based on that."

The Senegal operation benefits from established mining infrastructure and regulatory frameworks, contrasting with Thor's pioneering experience in Nigeria. The presence of operating mines including Sabodola-Massawa, and others provides proven development blueprints and experienced regulatory processes.

Interview with Segun Lawson, CEO of Thor Explorations

Côte d'Ivoire Exploration: Early Promise

Thor's expansion into Côte d'Ivoire demonstrates strategic portfolio diversification through early-stage exploration assets. The Guitry project, acquired from Endeavor Mining, shows exceptional promise with high-grade, wide intersections remaining open along strike and at depth. The company has committed to delivering a maiden resource by year-end from this 8km by 5km anomalous area.

The Marahui project presents additional upside potential with a 5-kilometer anomaly up to 200 meters wide. Rock chip sampling returned impressive results with grades of "29.9 g per ton, 28, 25 for the entire strike length," according to Lawson. Geophysical surveys planned for Q4 will guide inaugural drilling programs across both licenses.

Capital Allocation and Future Funding

Thor's approach to capital allocation reflects management's confidence in both operational performance and exploration potential. The company has simultaneously increased exploration budgets while initiating quarterly dividend payments. This dual approach addresses shareholder returns while maintaining aggressive growth investment. The company maintains sufficient balance sheet capacity to sustain both initiatives for a minimum two-year period.

Thor's strengthened financial position significantly improves its access to development capital for future projects. The company benefits from existing relationships with the Africa Finance Corporation, its largest shareholder and financier of the Nigerian operation. Additionally, ongoing cash generation and operational track record enhance project financing prospects for Senegal development.

The timing appears favourable for capital access, with Lawson noting: 

"We have a much stronger balance sheet. We will be deploying a lot of capital an equity component from our own balance sheet to derisk the project a lot." 

This self-funding capability reduces dilution risk while demonstrating management confidence in project returns.

The Investment Thesis for Thor Exploration

• Proven Production Platform: Established 85,000 oz/year Nigerian operation with industry-leading recovery rates and low-cost structure providing stable cash generation
• Multiple Growth Vectors: Near-term Segilola life extension through underground development, advanced Senegal PFS completion, and early-stage Côte d'Ivoire exploration upside
• Management Execution: Demonstrated track record of mine construction and operation in challenging West African jurisdictions with strong operational optimization capabilities
• Favorable Market Timing: High gold price environment maximizes cash generation while improving project economics across the portfolio
• Capital Allocation Balance: Sustainable dividend policy combined with aggressive exploration investment demonstrates disciplined growth strategy
• Infrastructure Leverage: In-house drilling capabilities and established EPC relationships reduce development risks and enhance exploration efficiency
• Regional Diversification: Multi-jurisdictional presence across Nigeria, Senegal, and Côte d'Ivoire provides political and operational risk mitigation
• Resource Base Expansion: Continued drilling success at existing assets supports reserve replacement and potential production increases

The current gold market environment presents exceptional opportunities for established producers like Thor Exploration. Record gold prices, driven by monetary policy uncertainty, geopolitical tensions, and inflation hedging demand, have fundamentally altered project economics across the sector. Thor's position as a low-cost producer in Nigeria provides significant margin expansion during this cycle, while its development pipeline in Senegal and Côte d'Ivoire benefits from improved feasibility thresholds.

West Africa's emergence as a premier gold jurisdiction continues attracting major mining investment, with established infrastructure and regulatory frameworks supporting development activities. The region's geological prospectivity, combined with improving political stability and mining-friendly policies, creates favorable conditions for exploration and development companies.

Thor's strategic positioning captures both immediate cash generation benefits and longer-term development optionality. The company's operational expertise in challenging jurisdictions, proven construction capabilities, and strong local relationships provide competitive advantages in a region where execution risk remains significant for many operators.

TL;DR

Thor Exploration operates Nigeria's flagship Segilola gold mine producing 85,000 oz/year with exceptional margins, while advancing the 1.78M oz Douta project in Senegal toward Q4 PFS completion. The company balances shareholder returns through quarterly dividends with aggressive exploration across three West African jurisdictions, targeting mine life extensions and resource growth. Strong cash generation and operational track record position Thor to capitalize on record gold prices while maintaining multiple growth catalysts.

FAQ's (AI Generated)

Q: What determines Thor's decision between deepening the open pit versus transitioning to underground at Segilola? 

Economic studies comparing strip ratios and gold prices will guide the decision, with rising gold prices favoring deeper open-pit extraction before underground transition.

Q: When will the Douta project PFS be completed and what production is targeted?  

The preliminary feasibility study is scheduled for Q4 2025, targeting 100-120,000 ounces annually using conventional CIL processing for oxide material.

Q: How does Thor's in-house drilling capability impact operations? 

Owning three rigs plus two contractors provides cost savings, operational flexibility, faster drilling rates, and eliminates mobilization delays for exploration programs.

Q: How sustainable is Thor's dividend policy given exploration commitments? 

Management committed to maintaining quarterly dividends for minimum two years while increasing exploration budgets, supported by strong cash generation and balance sheet capacity.

Q: What advantages does Thor have for future project financing? 

Established relationships with Africa Finance Corporation, proven operational track record, ongoing cash generation, and stronger balance sheet improve capital access for development projects.

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