Thor Explorations has defended its business arrangements and compliance with applicable regulations following scrutiny over its partnership with a Chinese state-owned company linked to U.S. sanctions.

In 2019, Thor contracted Norinco International Cooperation Limited, a subsidiary of China North Industries Group Co., Ltd. (commonly known as Norinco), to supply a gold ore processing plant for the Segilola mine in Nigeria. In April 2020, Thor issued nearly 35 million common shares valued at approximately US$5 million to Norinco International Cooperation Limited as partial payment for the contract.

Norinco’s parent company has faced significant U.S. government sanctions. It was designated in 2021 by the U.S. Department of Defense as a “Chinese military company” and contributor to China’s defense industrial base. The U.S. Treasury has imposed investment restrictions on Norinco, which has been under repeated scrutiny from multiple U.S. agencies. Despite this, Norinco is not sanctioned by Canadian authorities, and Canadian law does not prohibit companies from engaging with its subsidiaries.

Thor Explorations stated that Norinco International Cooperation Limited fully divested from Thor’s shares after the processing plant was completed and has never received dividends. Blasting operations at Segilola are handled by Auxin, another Norinco subsidiary, highlighting ongoing operational ties at the subsidiary level.

Experts caution that while sanctions do not inherently indicate wrongdoing, partnerships with subsidiaries of sanctioned entities call for heightened due diligence. Sheri Meyerhoffer, former Canadian Ombudsperson for Responsible Enterprise, noted that the presence of sanctions “flags the need for enhanced due diligence” but does not automatically imply improper conduct.

Thor maintains that it has fulfilled all relevant legal obligations, including compliance with sanctions, anti-bribery, and anti-corruption regulations. The company denied any failure in its due diligence responsibilities or misconduct in its engagement with Norinco’s subsidiary.

The former office of the Canadian Ombudsperson for Responsible Enterprise, which used to investigate complaints related to human rights and ethical issues involving Canadian companies abroad, was closed in June 2026 as part of a government decision announced by Prime Minister Mark Carney.

Ben Chalmers, vice-president of the Mining Association of Canada, emphasized the primary responsibility of host countries like Nigeria to regulate mining operations within their borders. Neither Thor Explorations nor its Nigerian operating entity, Segilola Resources Operating Ltd., are members of the association, which currently has no members active in Nigeria.

Chalmers noted that challenges related to Canadian mining firms operating overseas have diminished considerably over the past two decades, crediting initiatives such as Canada’s National Contact Point (NCP), a voluntary government office that promotes responsible business practices but lacks enforcement power. He added that Canadian mining companies are generally regarded as sought-after partners globally, and the association works closely with the government to encourage mechanisms for accountable dispute resolution.

The controversy underscores the complex regulatory landscape companies face when dealing with subsidiaries of foreign firms subject to international sanctions, particularly in sectors such as mining that often involve significant cross-border partnerships.