Theta Gold Mines Ltd (ASX:TGM) has demonstrated robust results in a definitive feasibility study (FS) for the TGME Underground Gold Mine Project in South Africa, delivering strong economics from the 6.46 million tonnes gold resource at 5.95 g/t.
Headlining the financial numbers, the study confirmed a net present value (NPV) of A$432 million at US$1,642 per ounce gold price and investors have responded positively with shares up 14.81% to A$0.062.
The definitive FS presents a clear pathway to production via the re-development of TGME’s gold assets within South Africa’s renowned gold mining region, with a forecast total life of mine (LOM) production of 1.24 million-ounce of contained gold.
“Significant milestone”
Theta chairman Bill Guy said: “The completion of the definitive FS marks a significant milestone achievement for Theta Gold shareholders and brings with it the rebirth of one of South Africa’s historical mine projects offering significant opportunities for our employees and their families as well as the local communities within the region.
“The definitive FS has confirmed the mining method, technical aspects and the economic viability of the 540,000 tonnes per annum mining and processing operation.
“The standalone CIL plant is to be constructed in modules using technology that enhances the design efficiency and construction of the metallurgical plant, with the optionality to expand production capacity in the future as additional mines are brought into production.
“The definitive FS uses a base gold price of US$1,642/ounce (A$2,189/ounce) with an AISC of US$834/ounce (A$1,112/ounce), thus displaying the financial robustness of the project which delivers capital payback of US$99 million (A$132 million) in 31 months.
“Once up to seven mines are brought into production, including Vaalhoek, Desire and Glynn’s mines, an annual production of 160,000 ounces will make Theta one of South Africa’s most significant, mid-tier listed gold doré producing companies.”
Potential upside
Theta’s potential upside beyond the feasibility study includes:
- Phase 2 - Increase production to include seven mines, with an expanded processing plant to 80,000 tonnes per month producing up to 160,000 ounces per annum within five years.
- Enlarging mineral resources via exploration targets, alongside the incorporation of additional mines from 40 neighbouring historical mines.
- Adoption of ESG fundamentals during the planning, design and development stages of the project.
- Tendering of mine services contracts in South Africa to achieve the most competitively priced outcome.
- All current reserves and LOM material are hosted in shallow orebodies.
About the project
The Transvaal Gold Mining Estate (TGME) Underground Gold Mine Project initially includes four mines in phase one - Beta, Frankfort, Clewer-Dukes Hill-Morgenzon (CDM) and Rietfontein - is near the towns of Pilgrim’s Rest and Sabie in Mpumalanga Province, 370 kilometres northeast of Johannesburg.
This project contains more than 43 historical mines with a longer-term plan to bring these large shallow goldfields back to production with minimum capital expenditure.
Additionally, there is 3.6 million ounce of inferred mineral resources available for future development – not included in the base case LOM plan.