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viewTheta Gold Mines Ltd

Theta Gold Mines has almost a whole gold province to itself in South Africa, and low-cost plans to get mining operations underway

Snapshot

Theta controls 620 square kilometres of the Sabie-Pilgrims Rest gold field in South Africa

Theta Gold Mines Ltd -

Quick facts: Theta Gold Mines Ltd

Price: 0.245 AUD

ASX:TGM
Market: ASX
Market Cap: $107.07 m
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  • Experienced management team
  • Six million ounce gold resource
  • Low-cost start up plans
  • Exploration upside

 

What the company owns

Theta Gold Mines Ltd (ASX:TGM) is focused on the development of projects at the Sabie-Pilgrim’s Rest goldfields in South Africa, 370 kilometres from Johannesburg

Overall resources ring in at six million ounces of gold, including 1.3mln open-pittable ounces

There is significant exploration upside at Pilgrim’s Rest

What’s been happening?

In May 2019, the company completed a feasibility study for starter pits at its projects. In October it was able to source a ball mill from Glencore that’s capable of processing a million tonnes of ore per year. That should be enough capacity to allow for the processing of all the ore from the planned phase one and phase two developments.

What’s the plan?

The plan is to mine just over 200,000 ounces in the first five years, at an all-in sustaining cost of US$764 per ounce. That should generate EBITDA of around US$100mln, assuming a gold price of US$1,257.

In the first half of 2020, Theta plans to select contractors and secure the US$34mln project finance that’s required to get the starter operations going.

Construction will get underway in the second half of 2020.

Longer-term, open pit production will expand before a third phase takes the company into its underground ore. At that point production is likely to move to over 150,000 ounces per year.

Ability to execute?

Financing risk is probably the major factor here, but it’s worth noting the company has plenty of strength in dept on its board, both in regard to capital markets and in regard to technical execution.

Bill Guy, the chairman, is ex-Jupiter Mines, and has more than 25 years of mining industry experience behind him.

Managing director Rob Thomson has more than 35 years’ experience as a mining engineer.

Finn Behnken, a non-executive director, is an investment banker and mining engineer. And two other non-executives are fund managers.

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Watch

Theta Gold Mines successfully enters subscription agreements for $8 million

Theta Gold Mines Ltd (ASX:TGM) chairman Bill Guy updates Proactive Investors on the release of a positive feasibility study for the Theta project to support further exploration on the large historical goldfield in South Africa The company also has completed a capital raising with subscription...

on 12/8/19

2 min read