Investors have backed their belief in Theta Gold’s plan to become an operational mid-tier gold producer by supporting a $1.7m private placement.

Proceeds from the placement of more than 24.28 million shares priced at 7c each will be used to fund preliminary development and planning activities for its Transvaal Gold Mining Estate (TGME) Gold Project in South Africa.

Funds will also be used by Theta Gold Mines (ASX:TGM) to complete permitting approvals for the project and general working capital.

“Both the signing of the A$110m (US$70m) Sprott Term Sheet for Stream funding and the completion of the definitive Feasibility Study (FS) for the TGME Underground Gold Mine marks significant achievements for the Company and allows us to move forward providing a clear road map for Theta Gold to transition into an operational, mid-tier gold producer,” chairman Bill Guy said.

“Due diligence work is being prepared for Sprott’s team and their various appointed consultants. The board shall provide an update of this progress in December 2022.

“I welcome the new strategic international and domestic investors to our registry as funds will be used to progress our pre-development work including final permitting and various operational-readiness spends.”

Share Purchase Plan

The company is also looking to raise a further $1.5m through a share purchase plan for existing shareholders.

This will offer each shareholder the opportunity to subscribe for up to $30,000 worth of shares at the same price as the placement.

Any shortfall from the SPP may be allocated at the discretion of the board.

Transvaal Gold Mining Estate (TGME)

The feasibility study for the TGME underground gold mine project, which initially includes the Beta, Frankfort, Clewer-Dukes Hill-Morgenzon (CDM) and Rietfontein mines, has forecast total life of mine production of 1.24Moz of gold over the 12.9 year Phase 1 plan.

Economics are attractive with pre-tax net present value and internal rate of return – both measures of a project’s profitability – estimated at US$324m ($498.9m) and 65% respectively.

Capex is estimated at US$174m with payback in 31 months while all-in-sustaining costs are estimated at US$834 per oz.

There is potential for further growth given that more than 3Moz of Inferred Resources have not been included in the base case LOM plan.



This article was developed in collaboration with Theta Gold Mines (ASX:TGM), a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.