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.

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

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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.