Chairman's Address to Shareholders at 2016 AGM
Thomson has maintained a quality exploration program on its high value opportunities in New South Wales with a particular focus on tin. The Company continues to see a favourable outlook for tin and recent price movements have borne out this faith. NSW is arguably one of the best regions for tin exploration given its historic production and diverse geological potential.
The key area of attention has been the Bygoo project, located just north of NSW's once largest tin mine at Ardlethan. The Company has so far conducted three drill programs, with each program successfully intersecting high-grade tin mineralisation in a greisen zone in the roof of the Ardlethan granite. There have been outstanding tin intercepts at Bygoo North representing some of the best drill intersections recorded in grass-roots tin exploration in Australia for some years. The greisen zone is open to the east, west and down dip, and further drilling is planned.
Some 400m south at the Bygoo South prospect, Thomson also has had success, with a shallow intersection of high-grade tin mineralisation under old workings. The gap zone between Bygoo North and Bygoo South requires testing as does the Big Bygoo prospect 1.5km to the south. It is clear that the contact zone between the Ardlethan Granite and volcanic rocks under the Thomson exploration licence is a very important mineralised corridor which the Company intends focussing a significant proportion of its future exploration effort.
Recently, the Company applied for a new Exploration Licence (ELA 5350) over an area south of Ardlethan, contiguous with Thomson's EL 8260. This application covers a number of old tin workings in the Frews area, as well as several old gold shows further south. Historical exploration has shown that this area offers further potential for significant tin mineral systems.
Elsewhere, the Company entered a farm-in and joint-venture agreement with Silver City Minerals Limited in August 2016 over its Wilga Downs project. The project is considered an excellent copper target, with a ground geophysical survey by Thomson generating a VTEM conductor in comparable rocks to the Tritton copper mine to the south.
Thomson is indeed pleased to work with Silver City Minerals to ensure that this exciting copper target is tested in the near future. Once Silver City earns an 80% interest, Thomson will be free-carried until commencement of a definitive feasibility study when both companies will contribute to expenditures pro-rata. The above arrangement will allow Thomson to focus on its Bygoo tin project.
Also during the year, Thomson joint ventured a number of other projects including its Havilah prospect, with potential VMS mineralisation in Silurian volcanic rocks, to Silver Mines Ltd and its Mullagalah prospect to a private investor who has now earned a 50% interest in the tenement.
Thomson was granted EL 8392 in southern NSW during the year which covers the significant tin-tungsten mineral system at Mt Paynter.
It was indeed encouraging to receive news in August 2016 that the NSW Government will provide drilling assistance to test the Mt Jacob and Cuttaburra B IRG targets.
Beer & Co Equity Research recently issued a research report on the Company. Beer and Co recommended Thomson as a Speculative Buy on the basis of the good tin results from Bygoo and Beer's confidence in an increasing tin price.
The Company is also constantly on the lookout for funding opportunities and alert to jointventure projects that will add to the Company's exploration portfolio and to shareholder value. In this respect I am pleased to report that Thomson Resources has signed a Farmin and Joint Venture Agreement for its Bygoo Tin Project with a North American private investor who can earn 51% interest on contributing $A3 million in a series of staged payments by 30 November 2017. The investor has an option to contribute additional funds to earn a further 25% interest. The option will be exercisable until 1 October, 2018 at an exercise price of A$22 million, with an initial payment at commencement of A$4 million.
Thomson welcomes this investment as a strong show of support for the prospectivity of the Bygoo Tin Project. The farm-in funding removes the financial constraints on Thomson in developing this project towards production. Drilling is planned to commence at Bygoo North as soon as practical.
About Thomson Resources Ltd
Thomson Resources Ltd (ASX:TMZ) is an NSW active mineral explorer. Thomson has several tin projects (including an advanced project near Ardlethan), as well as gold, copper and zinc targets in a range of settings. Thomson has a good record of discovery, with multiple new Intrusion-Related Gold (gold with copper, lead, zinc, molybdenum, tungsten) systems discovered in the Thomson Fold Belt in the NW of the state.
Thomson Resources Ltd