The companies have signed a memorandum of understanding (MOU) that sets the stage for a more comprehensive engineering, procurement and construction (EPC) turnkey agreement to be finalised.

This will follow soon after a definitive feasibility study has been completed on Segilola, slated to happen in the December quarter.

Such a definitive contract would cover the design, engineering, procurement, site preparation, construction, commissioning, performance testing and hand-over of the project and its associated infrastructure.

CEO Segun Lawson says the MOU offers a clear path to Thor achieving gold production at Segilola in 2020. The US$71.4 million project is fully permitted and "shovel ready".

"NORINCO International has provided a competitive EPC proposal priced on the preliminary feasibility study design, which provides confidence that the project can be delivered on time and on budget by a well-established EPC contractor," Lawson says.

The development of Segilola, about 120km north-east of Lagos in the Osun region, is being closely watched in Nigeria, since it is the most advanced precious metals project.

The deposit contains an indicated resource of more than 556,000 ounces gold grading 4.2g/t gold, of which 448,000oz is in the probable reserve category, grading on average 4.2g/t. Segilola also holds an inferred resource of 306,000oz grading 4.7g/t.

News of the MOU did little to move the equity Monday, which closed flat at C17.5c (US13.44c) a share, giving the enterprise a market valuation of about C$64.87 million.