Stellar metrics just the start for near-term developer Theta Gold
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THETA GOLD MINES | GOLD
GOLD OUTLOOK
OUTLOOK
Stellar metrics just the
start for near-term
developer Theta Gold
Theta Gold Mines is poised for a see the long-term future at Theta,” Guy said. “These guys
know how to build a mine in South Africa and deliver a
rerating as it rapidly moves to project.”
become a key player in South He said the input from ex-Harmony experts had helped
Africa’s mining industry. hone the company’s focus on starting with the higher-grade
underground ore, to get the initial capex paid off.
The company is bringing a new shine to an historical, Theta’s existing 1.4Moz openpit resources would form part
multimillion-ounce gold field, looking to initially start with of future expansions.
an eight-year, low-cost underground development set to
provide an internal rate of return around 100% at the Underground mining is well understood in South Africa and
current gold price. However the excellent metrics are just the phase one TGME underground mines are within a
the beginning, chairman Bill Guy is quick to point out, at granted Mining Right (MR 83). Non-conforming changes to
what the company believes will be a circa 30-year operation. Environmental Management Plan (EMP) will require further
permitting.
Theta has more than 6 million ounces of gold under
management at its flagship TGME project, putting it in the A prefeasibility study released in April for the TGME
top three undeveloped gold resources among ASX-listed underground development – based on three of the 43
peers. former mines – outlined initial capex of US$79 million
(
GOLD OUTLOOK | THETA GOLD MINES
“We really see this as
He noted the TGME PFS was based on only 16% of the 4.5
million ounces in the project’s underground resources, and
a good investment
said the project held plenty of further upside.
The next cab off the rank is the Rietfontein mine, which has
an indicated 242,200oz grading 8.2g/t and an inferred opportunity – we’re
undervalued against
537,600oz at 14g/t.
Theta is planning to upgrade Rietfontein’s 2017 scoping
study to a prefeasibility study in the third quarter, to feed
into a larger feasibility study on the phase one
our peers.”
development.
The company then has a multitude of near-surface targets The sentiment is echoed by Zacks Small-Cap Research
near the existing, fully permitted processing plant, which is analyst Steven Ralston, who described Theta as being on the
set to be upgraded and expanded. threshold of becoming a gold producer and highlighted
management’s moves to optimise the project by initially
“The resource pipeline into the future is strong and the scale targeting higher-grade, near-surface deposits and
of the potential resources and the geology in South Africa optimising mining and processing methods.
should not be underestimated,” Guy said.
Ralston said Theta’s preferred method of mechanised long
“Over 40% of the world’s gold has come from the small hole stoping would result in higher grade ore, dramatically
corner of South Africa that we call home.” improving cost efficiency per ounce.
Guy envisages a debt and equity combination for likely well- He indicated a target price of US69 cents per share, based
timed project funding. on the calculation of share value of attributable resources.
“We feel there is a lot of money going towards projects and This target converts to about AU88 cents, compares with
at the moment, but there’s a relatively few number of pre- Theta’s current share price of A24 cents on its primary ASX
development projects around,” he said. listing.
The top of Theta Gold Mines’ TGME gold plant in South Africa
26 May 2021
THETA GOLD MINES | GOLD OUTLOOK
Ralston expected Theta’s stock to react to upcoming
announcements concerning the Rietfontein PFS, resource
upgrades and process towards refurbishing the CIL
processing plant, along with plant design and metallurgical
upgrades.
Focus on ESG
Theta said Environmental, Social and Governance (ESG)
considerations were integral to its development strategy in
South Africa.
It has assembled a highly-competent team to deal with all
“licence to operate” aspects and said local communities
were highly supportive of Theta’s projects.
The company believes TGME will be the biggest employer in
the region and its projects are structured for broad-based
economic participation.
Theta itself owns 74% of the assets, with the balance held
by Black Economic Empowerment entities.
Guy also highlighted the support being shown for the
resources sector in South Africa, with both president Cyril
completing a PFS on Rietfontein, which could further
Ramaphosa and mines minister Gwede Mantashe having
increase the initial production profile.
mining backgrounds.
The company is aiming to upgrade its phase one
Ramaphosa recently said mining would be a key
development plans to a feasibility study within the year and
component of post-COVID-19 economic recovery and job
transition to producer status in 2022.
creation in South Africa. Mantashe also recently reiterated
the government’s commitment to expediting the approvals “This is the beginning of a very long story,” Guy said.
process in the sector.
The pro-mining sentiment gives Theta confidence of
gaining approvals for its proposed amended works Theta Gold Mines – at a glance
programme and associated environmental approvals.
“You have two key persons in the country politically who Head Office
have a very deep understanding of mining and are very Level 35, Intl Tower One
supportive of it,” Guy said. 100 Barangaroo Ave, Sydney NSW 2000
“The outlook for South Africa is picking up and through Tel: +61 2 8046 7584
Theta, you have a chance to get access to a re-emerging Email: info@thetagoldmines.com
economy. Web: www.thetagoldmines.com
“It’s got the best infrastructure on the African continent … Directors
it’s a very important jurisdiction globally.” Bill Guy, Finn Behnken, Bill Richie Yang, Rob Thomson,
Looking ahead, Theta’s 160,000oz per annum production Simon Liu, Brett Tang
aim is based on a six-mine operation and the project hosts a Shares on Issue
multitude of expansion opportunities to further increase 503.25 million
the resource base and production for more than three
decades. Market CAP (at April 29, 2021/A24c)
A$123 million
Meanwhile there are a suite of upcoming catalysts set to
draw investors’ attention. In the coming months, Guy said Major Shareholders
Theta was working on an increase to the mining reserve and Top 10 (68%), Directors and management (9.5%)
May 2021 27You can also read
