A Good Lesson to Learn

Yesterday afternoon, Thor was closed nearly 20% lower.
My exposure on Thor is around 3.5% of my total portfolio, and from the time I bought the share about a week ago, the decline is around 12%.

It is not too much of a disaster, yet give me a good lesson and experience on turbularity of the share market.

There's an article on today's the Australian about Thor, however what's behind the pull out is still a question. A lot of maybes, a lot of perhaps. Here it is:

Where to now for Thor after Chinese snub?

April 27, 2007

WHILE the uranium world keeps its fingers crossed for a change of heart from the Australian Labor Party this weekend on uranium mining, at least one yellowcake hopeful will be a little less enthusiastic about the decision.

Perth-based junior Thor Mining got a real kick in the guts on Thursday when it found out that its Chinese partner had pulled out of the partnership to develop its Molyhil project in the Northern Territory.

But in a slap in the face, Hunan Nonferrous Metals couldn't even pick up the phone to tell Thor, if media reports are to be believed.Hunan, one of the world's biggest non-ferrous metal companies, is believed to have faxed Thor of its intentions to withdraw from the project. No explanation was given. The Memorandum of Understanding and the exclusivity agreement Thor and Hunan signed just last month is now dead in the water.

It also puts into doubt several other confidential agreements Thor had with other parties who were hoping that Hunan would still be in the picture. Perhaps the writing was on the wall on April 13 when Hunan asked for an extension for its period of due diligence over Molyhil. Hunan was to have had until April 15 to do its due diligence, but informed Thor two days earlier that it needed until the end of April. Thor agreed, and also postponed the date for completion of commercial negotiations until May 11."Thor and Hunan continue to work closely together on the outstanding due diligence matters and Thor is optimistic that all outstanding matters will be resolved," is how chief executive John Young put it at the time.

But perhaps it was the recent release of drilling update at Molyhil which upset Hunan, but that is unlikely.After a stuff-up in which Thor signed off on the statement without the "Competent Persons" statement on Thursday, it issued a corrected version today, just before it advised that Hunan had jumped ship. Extension drilling of the current JORC-compliant resource, 2.4 million tonnes grading 0.8 per cent comprising 0.8 per cent combined tungsten oxide and molybdenum, showed combined tungsten-molybdenum grades better than 1 per cent."The reverse circulation drilling program comprising 25 holes drilled for 2586 metres has identified extensions of the mineralisation outside of the current mining reserve and is expected to lay the foundations for an increase in the resource and reserve inventory at Molyhil," Thor said."Thor's board believes that the completion of a revised JORC resource is critical in establishing more accurate project valuations, which will ultimately have an effect on commercial negotiations regarding financing and off-take terms."Mr Young said he expected the completion of a new pit optimisation study by Australian Mining Consultants to be finished by "mid-year". Maybe Hunan couldn't wait any longer.

Hunan's departure is a big blow to Thor. It now has to look for other partners to fund and develop Molyhil. A start up at Molyhil is essential to get some dollars in the bank to advance its uranium assets which are also in the Northern Territory. Just like Thor's share price rocketed when Hunan came knocking in March, it has also dived when the market found out about its departure.It is all about where to now for Thor to restore the investor faith.