Fewer ounces, more profit

Thor Explorations' third-quarter financial results, released on 5 November 2026, showed an apparent contradiction. The company poured 15,515 ounces of gold at its Segilola mine in Nigeria, down from 22,617 ounces a year earlier, yet net profit rose to US$47.3m from US$43.1m and EBITDA increased to US$56.9m from US$51.4m. Revenue climbed to US$81.3m from US$69.9m.

The explanation lies in sales and price. Thor (LSE:THX) sold 19,000 ounces during the quarter at an average of US$4,280 an ounce. Selling more than it poured suggests gold produced in earlier periods was sold, although the release did not reconcile the two figures. With output lower than a year earlier, the higher gold price appears to have been the main driver of the revenue increase.

About the company

Thor Explorations owns the Segilola gold mine in Nigeria and is developing the Douta project in Senegal. A single operating mine means the company's results depend on that asset's output and costs. Its gold sales are priced at market prices, so the realised price is a major influence on revenue and profit.

Costs remained contained

Cash operating costs were US$754 per ounce sold and all-in sustaining costs US$993, comfortably below the realised price. Ore processed was 249,607 tonnes at 2.10 grams per tonne, with recovery of 92.8% and no significant unplanned downtime. Mined ore fell to 303,602 tonnes at 1.69 grams per tonne after severe rainfall in late August, which led Thor to lower 2026 production guidance to 70,000 to 72,000 ounces from 75,000 to 85,000 ounces, while keeping All-In Sustaining Cost guidance at US$1,000 to US$1,200 an ounce.

A stockpile containing 58,322 ounces at 0.72 grams per tonne, about two years of plant feed, provides a buffer against Mining disruption.

A large cash position

Adjusted net cash reached US$236.6m at the end of September, against US$81.0m a year earlier. Thor maintained its quarterly Dividend of C$0.0125 a share. For a single-mine producer, that cash gives considerable flexibility, and the obvious call on it is Douta, the company's development project in Senegal. Net cash rose by about US$155m over twelve months, a period in which dividends were also paid, showing how firmly current prices convert into cash at a mine with all-in sustaining costs near US$1,000 an ounce.

Where Douta stands

Douta's Phase 1 environmental and social impact assessment was approved in January 2026, and related forestry and water permits have been obtained. The company said the mining convention and the mining permit were both in their final stages, and chief executive Segun Lawson described progress as significant. Drilling continues on the Bousankhoba permit along a 10km corridor, and an updated mineral resource estimate is targeted for the fourth quarter. LSE:THX has not published a construction decision or Capital estimate so the size of the eventual cash commitment is unknown.

At Segilola itself, four owner-operated rigs are drilling depth extensions of the Northern and Southern zones, with results expected in the fourth quarter. An underground operation could extend the mine's life.

Risks and limitations

Profit depends heavily on the gold price, which could fall. Segilola remains the only source of revenue, and weather has already disrupted mining this year. Douta's convention has been described as near completion for some time, and any delay would hold back development. Exploration in Côte d'Ivoire, including the Marahui project, is at an early stage and competes for capital. Nigerian currency and security conditions, and Senegal's fiscal terms, are also variables outside the company's control.

The profit arithmetic

Sales of 19,000 ounces at US$4,280 give revenue from gold of about US$81.3m, matching the reported figure. A year earlier, revenue of US$69.9m is a lower figure, even though output was higher at 22,617 ounces poured, which shows that the gold price rose enough to offset the lower volume. At cash operating costs of US$754 per ounce and all-in sustaining costs of US$993, the Margin over all-in sustaining costs was about US$3,287 an ounce, so 19,000 ounces generate about US$62m before other items. Net profit of US$47.3m is about 58% of revenue.

Guidance

Lowering guidance to 70,000 to 72,000 ounces from 75,000 to 85,000 ounces reduces the midpoint by about 9%, from 80,000 to 71,000 ounces. The all-in sustaining cost guidance of US$1,000 to US$1,200 an ounce is unchanged, so the company expects costs per ounce to stay in that range even with less gold. The quarter's all-in sustaining cost of US$993 is just below the range.

The stockpile and processing

Ore processed at 249,607 tonnes at 2.10 grams per tonne contains about 16,850 ounces before recovery, and at a recovery of 92.8% gives about 15,640 ounces, close to the 15,515 ounces poured. Mined ore at 1.69 grams per tonne is lower grade than the ore processed, so the plant drew on higher-grade stockpiled ore. The stockpile of 58,322 ounces at 0.72 grams per tonne is low grade but provides about two years of plant feed.

Cash and Douta

Net cash of US$236.6m, up about US$155m from US$81.0m, provides funding capacity. The quarterly dividend of C$0.0125 a share is a small part of that. The Phase 1 environmental and social impact assessment, approved in January 2026, and related permits are steps towards a construction decision at Douta. The cash position means the company could fund early works itself, though the project's capital cost would be the key figure.

Sensitivity to gold prices and output

Because the company operates one mine, a change in output has a direct effect on results. The reduction in guidance to 70,000 to 72,000 ounces reflects the rainfall in late August, which affected mining. The lower mined tonnage and grade were partly offset by drawing on stockpiled ore.

The realised price of US$4,280 an ounce is about 4.3 times the all-in sustaining cost of US$993, so profit is more sensitive to the price than to costs in this range. A fall in the price of 10% would reduce the margin per ounce by about US$428, or about 13% of the margin on the quarter's figures.

Selling more ounces than were poured in a quarter means that the company drew on gold held in inventory. The company has not reconciled the difference, so the exact movement in inventory is not known.

What comes next

LSE:THX held an investor webinar to discuss the results after announcing it on 6 November. Its corporate calendar lists the formal third-quarter report on 16 November, the Annual General Meeting on 10 December and 2026 full-year results on 7 April 2027. Before the end of the year it expects further Segilola underground drilling results, the updated Douta resource and, it hopes, the signed mining convention.