Latest news with #ThetaGoldMines
News.com.au
2 days ago
- Business
- News.com.au
Kristie Batten: Theta moves towards gold production in South Africa
One of Australia's top mining journalists, Kristie Batten, writes for Stockhead every week in her regular column placing a watchful eye on the movers and shakers of the small cap resources scene. June was an important month for Theta Gold Mines (ASX:TGM), as it put all the pieces in place to build South Africa's next gold operation. Theta owns 74% of the 6.1 million ounce TGME brownfields project, 370km northeast of Johannesburg, which is where South Africa's gold mining industry began almost 130 years ago. The company ticked off a number of milestones last month on its path to production. It received a credit-approved loan facility agreement and indicative funding terms for up to US$35 million from the Industrial Development Corporation of South Africa, which will form part of the funding for the TGME underground mine. Specialist South African firm Moore Debt Advisory has been appointed to support the company through the process to secure commercial co-lenders. Theta also made a decision to mine and raised US$4 million via a private placement to existing shareholder Hong Kong Ruihua Green Development, which will allow early works. A report released by RaaS Research Group earlier this month pointed out that Theta traded below the average and median on an enterprise value per ounce basis when measured against 22 ASX developer peers. 'This suggests that the market capitalisation of Theta can materially re-rate should the company successfully enter production,' it said. Also this month, veteran analyst Warwick Grigor, of Far East Capital, suggested Theta represented 'sound value'. 'Better and better' Theta released a feasibility study for TGME in 2022 and an update is due in the current quarter. It's unusual for a company to make a decision to mine before the release of the feasibility study, but Theta chairman Bill Guy told Stockhead the project was profitable at a much lower gold price than today. The 2022 study covered the first four mines, Beta, CDM, Frankfort and Rietfontein, for a 12.9-year mine life to produce 1.24 million ounces of gold. The peak funding requirement was forecast at US$77 million. The 2022 study used a gold price of US$1642 an ounce and returned a pre-tax net present value of US$324 million and internal rate of return of 65%. 'Basically, we expect most of those numbers to improve by between 50% and 100%,' Guy said. 'We probably expect the all-in costs to go up a little bit, because South Africa has a sliding scale for royalties, and the peak capex will probably go up over US$80 million. 'There's no issue with profitability. It's just gotten better and better, so the project's very profitable. It has strong cashflow. Even at US$1642 it's going to make, over US$500 million in free cash, post-tax. We know that's even higher now.' Site work underway 'We've just finished decommissioning the old plant site, getting ready for our bulk earthworks and civil, so we really want to start that next couple of weeks,' Guy said. Equipment has been delivered to site and the quoting process for the engineering work and plant is underway. Guy expects the earthworks to be completed by the end of the year. 'Once we've done that, then we're really only 12 months away from a gold bar,' he said. Guy described the full-scale development process as 'plug and play'. 'Everything is built in the factory, inspected, dismantled and put back on the truck and trucked to site, so we don't have a big civil camp. We don't have all those extra costs,' he said. Being a brownfields site, the existing infrastructure including roads, power and water, keeps capital costs down. 'Roads are incredibly expensive. Tailings dams are incredibly expensive,' Guy said. 'We have no office administration buildings. We have housing.' Licence to operate Last month, the company locked in a 13-year renewal of Mining Right 83 through to 2038, accounting for more than three quarters of the mine schedule under the 2022 study. As per South Africa's Mining Charter, 26% of the project is owned by Black Economic Empowerment entities, comprising local community trusts, an employee trust and a strategic entrepreneurial partner. 'We spend a lot of time and energy on that social licence in the community – the community are our shareholders. They are part of the project as well,' Guy said. 'I think what Theta has done, which is quite unique, it really has built that social licence from the ground up, and that's how we really fight through the paperwork and everything else.' The company quickly got the support of the provincial government. 'Because the community went out and asked for the mine. They signed petitions for the mine,' Guys said. 'They call it their mine, because they will actually benefit … so I think that's made a big difference.'
News.com.au
07-07-2025
- Business
- News.com.au
ASX miners bring shine back to South African gold
Rich in history, South Africa's gold mining industry is being reborn under the watch of two ASX listed companies Theta Gold Mines is bringing one of South Africa's most storied gold mines back to life West Wits Mining targeting first gold pour in 2026 As gold prices soar, ASX gold developers have emerged among the next generation of miners to restore and reinvigorate South Africa's status as one of the world's top gold jurisdictions. In 1993, South African gold producers delivered close to 620t of bullion to global markets, as much as 49% of the world's total. Nowadays rising output from competitors like Australia, Russia, Canada and China has relegated the richest democracy in Africa to 12th place, producing under 100t in 2024. But the outlook for gold developers in the Rainbow Nation is looking brighter, with prices in excess of US$3300/oz, paired with a weak Rand, leading many to recalculate their economics in updated studies. On top of that, a tenuous coalition led by the country's two largest political parties – the African National Congress and Democratic Alliance – has sharpened the tools of government after years of inertia under the long ruling ANC, promising to modernise its services and make its business environment more attractive. Against that backdrop, mines that have laid dormant for years are now on a pathway to development. Key among those is the Transvaal Gold Mining Estates project, where ASX-listed Theta Gold Mines (ASX:TGM) last month announced a decision to mine one of South Africa's most historically significant gold fields. Located 370km east of Johannesburg in the Mpumalanga Province, the TGME project is not part of the Witwatersrand Basin, the famous 1.5Boz gold field from which more bullion has been sourced than any other in history. Rather it is located near Pilgrim's Rest, the site of South Africa's first major gold rush in September 1873. Theta's local subsidiary – TGME – holds particular significance for the story of the country's relationship with the yellow metal. It was the first listed gold mining company in South Africa and at over 130 years, among its oldest continuously running corporations. TGM's announcement that its board had approved the project's redevelopment starts the latest chapter in the mine's illustrious history. "It does have a long history, 130 years of history and pretty consistent mining," Theta Gold Mines' executive chair Bill Guy said. "And it had a lot of gold left behind. Historically they produced about 6.7 million ounces and we've got 6 million ounces on the book. "We know there's more gold than that but the board really had to make a decision about where do we stop exploring and when do we start mining and making some money." Return of the gold rush The key mine of the TGME in the early days was the Beta gold mine, which produced consistently from the early 1900s to the 1972, producing over 550,000oz at grades in the order of 21g/t – around two-thirds of a troy ounce. Other, smaller mines, wound up operations during World War 2 due to a lack of manpower, but the project eventually found itself in the hands of a young Randgold Resources, which went on to develop major gold mines in West Africa and become a part of world class gold miner Barrick. The gold field now under Theta's control includes 6.1Moz of resources at an average grade of 4.17g/t, over 1.6Moz of those in the higher confidence indicated category and over 1Moz at Beta alone. Theta is aiming to revive the operations by scaling up production from four underground mines at Beta, Rietfontein, Frankfort and CDM, producing 1.1Moz over 12.9 years based on its current mining inventory at a head grade of 5.95g/t and underground production rate of 540,000tpa. That would deliver 80-100,000ozpa within three years of the mine's development, with average all in sustaining costs of ~US$900/oz, among the lowest in South Africa and some of the lowest in the world. However, those numbers are largely based on a definitive feasibility study from 2022, using a base case gold price of just US$1642/oz. With spot gold now double those levels, an updated study is due in the September quarter, likely to make the economics even stronger. "I joined the company about six years ago (and) we've doubled the resource from 3Moz to 6Moz, we've restructured the company and we've got 30 guys on the ground now, so we effectively have an operating mine site. Everyone on that site is an experienced miner," Guy said. "We just feel we're in a very good spot, ready to go. We've completed all our studies, we'll have one updated feasibility study in August in terms of the much higher gold price. "Our first feasibility was at US$1642/oz and even at US$1642/oz it was a very profitable mine." Strong support The first three mines included in the development have already been approved, Guy said, with 11km of exposed reef system to tap into. Stockpiles estimated to hold 174,000z of gold are already stacked up for potential processing alongside the underground development, with underground stocks also left behind by the old timers on account of the very high cut-off grades the project was mined at historically. Guy said the +5g/t grade of the mining inventory would be considered "very high grade dirt" if it was in Australia. TGM has already secured the support of the South African Government's Independent Development Corporation, which has signed an agreed credit approved loan facility agreement for US$35m ($53.8m) to cornerstone its debt finance. The agreement includes attractive terms including a seven year term from first drawdown and an 18-month capital and interest moratorium. Legal, technical and environmental due diligence has also been completed, a reflection of the importance of ESG considerations to investing in South Africa. Guy says the social licence to operate is a major factor in mining approvals in South Africa, with Theta anticipated to have 500 full time employees once the mine is up and running, making it the largest private employer and taxpayer in the Mpumalanga region. On the jurisdictional front, power supply issues which have plagued South African industry and consumers have become less prominent in recent times, Guy said. The expansion of standalone power plants and solar power in the country in recent years has helped take pressure off the national grid, with transport infrastructure around the TGME site also improving. "You have to remember also as a miner you're a strategic industry and, effectively, you're the last one to have the power turned off," Guy said. "I was there for 6-8 weeks before Christmas and we didn't have one load shedding event or one power blackout. "Things have improved dramatically. When I was there 2-3 years ago I would expect to have a load shedding event at least twice a day. So the power's improved a lot." Emerging trend Theta isn't the only ASX miner aiming to restore an historic South African gold mine. West Wits Mining (ASX:WWI) also has the support of the IDC via a senior debt facility for around US$50m for its Qala Shallows development in Gauteng, where it's aiming to pour first gold via a toll treatment deal with Sibanye-Stillwater in Q4 2025. Qala Shallows holds an ore reserve of 351,424oz, with the initial plan to ramp up to a rate of 70,000ozpa by 2028. With a broader mineral resource of 5.025Moz at 4.66g/t gold at the broader Witwatersrand Basin project, a study is under way to assess the potential expansion of the WBP operation to 200,000ozpa. The Qala Shallows development is also, like TGME, being placed under the microscope via a feasibility study review, with the price of gold well above the US$1850/oz used in its last DFS update in 2023. "Obviously with the rise in gold price there's a lot of opportunity to optimise that cut-off grade, which will add a lot of reserves or (resources) which we excluded from our mining plan," WWI CEO Rudi Deysel told Tylah Tully in a recent Stockhead TV interview. "So the expectation is we can accelerate the buildup of the production profile, as well as increase our reserve base, which is a big thing, as well as increasing life of mine." West Wits recently raised $14m in a placement, of which US$5m will be used to buy back a 10% minority interest in the holding subsidiary for the WBP, taking its ownership at the mine level from 66.6% to 74%. The rest will be used for the feasibility study review and optimisation, working capital and to commence operations at Qala Shallows. "The intention is to mobilise and prepare for operations in the next two months and then early (H2 2025) we will start with our production," Deysel said. The plan is to build up a 30,000t stockpile for six months after mining begins before trucking to Sibanye's Ezulwini plant, with a first gold pour expected early next year. Away from gold but still in the realm of precious metals, the development landscape for Southern Palladium's (ASX:SPD) Bengwenyama platinum and palladium mine is also looking brighter after platinum prices surged to an 11 year high of more than US$1400/oz in early July.
Yahoo
11-06-2025
- Business
- Yahoo
TGM secures $35m loan agreement for South African underground gold project
Theta Gold Mines has secured a loan facility agreement and indicative funding terms from the Industrial Development Corporation of South Africa (IDC) for the financing of the TGME underground gold mine project in South Africa. The IDC has granted a seven-year debt funding loan valued at R622m ($35m) for the project, which includes an initial 18-month period where both capital and interest payments are deferred. The agreement follows a thorough due diligence process and is subject to standard conditions including satisfactory security terms with co-lenders and completion of the company's equity funding contribution. The company has also achieved a 13-year renewal for Mining Right 83 (MR83) until 2038. MR83 covers key mines including Beta, CDM and Frankfort within the TGME Underground gold project. Theta Gold Mines' subsidiary has maintained control over this area for more than 130 years, underscoring its long-standing presence in the region. Theta Gold Mines chairman Bill Guy said: 'The IDC, South Africa's state-owned institution, has completed a due diligence and approved funding of the project. Its debt funding Loan Facility Agreement in the TGME Underground Gold Project signals strong confidence in the project's economics and alignment with IDC's sustainable growth mandate. 'This is a major funding milestone, with [the] next step finalising legal agreements. IDC has a proven track record backing early-stage African successes like Kumba Iron Ore and Alphamin Resources.' Theta Gold Mines, an advanced gold development company, is currently updating its definitive feasibility study (DFS), initially released on 27 July 2022, with the revised version expected in the third quarter of 2025. With the current gold spot price near $3,324/oz, the updated DFS is expected to reveal substantially improved economics for the project. Last month, the company started pre-construction at the TGME gold processing plant in South Africa. "TGM secures $35m loan agreement for South African underground gold project" was originally created and published by Mining Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Yahoo
01-05-2025
- Business
- Yahoo
Theta Gold begins pre-construction activities at TGME gold plant in South Africa
Theta Gold Mines has announced the commencement of pre-construction activities at its TGME gold processing plant in South Africa. The plant will process a combination of underground ore, surface tailings and rock dumps from the TGME Gold Project to produce Doré bars for refining. The company has started decommissioning the old gold plant and finalising design and engineering packages in preparation for the construction phase. RM Processing has been appointed to oversee the final plant design and cost estimates. The tender process for construction is in its final stages, and the civil design works and site layout have been fully permitted. The company has outlined a forecast schedule targeting the second quarter of 2025 for the execution of engineering, procurement, construction and management (EPCM) contracts and the commencement of bulk earthworks. Predevelopment work included the procurement of electrical and wastewater management systems, engagement of mobile cranes and heavy equipment, and the purchase of machinery to dismantle old structures. Additionally, the site has been prepared with perimeter fencing, rerouted water supply and temporary reservoir installations. Theta Gold Mines has also identified a near-term opportunity to process approximately 174,000oz of gold, including 140,600oz of indicated resources, from tailings dams and surface rock dumps located around the processing plant. Theta Gold Mines chairman Bill Guy said: 'We are pleased to report that Theta is nearing build-ready with a fully designed, engineered and permitted gold processing facility. 'The transition from planning to action has begun with the decommissioning of the old plant and site preparation well under way. This is a major step forward in transforming Theta into a near-term gold producer.' In February 2024, Theta Gold Mines signed a memorandum of understanding with Yellow River, a unit of Power Construction Corporation of China, to construct the first phase of its TGME project. "Theta Gold begins pre-construction activities at TGME gold plant in South Africa" was originally created and published by Mining Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
