Theta Gold Mines Shifts Funding Strategy for South African Gold Project
Junior miner Theta Gold Mines has revised the funding strategy for its South African gold project, according to chairperson Bill Guy.
The ASX-listed company will fully redeem its A$6-million secured bonds with 2Invest, freeing up its project interests to serve as collateral for future potential project funders. Theta plans to use funds from an $8-million private placement to facilitate the bond redemption.
The company has already received $6 million from the first tranche of a $10-million, two-tranche placement with Hong Kong Ruihua Investment (HRIM), alongside a firm commitment for an additional $2 million from institutional investors. HRIM remains committed to the second tranche, which is valued at $4 million.
Theta has also decided against moving forward with a previously proposed streaming transaction with Sprott Streaming and Royalty.
Instead, it is focusing on negotiations with Yellow River, a subsidiary of Power Construction Corporation of China (PowerChina). The negotiations center around an engineering, procurement, and construction (EPC) agreement that includes 70% deferred payment terms for the construction of Stage 1 of its TGME gold plant and tailings storage facility.
Additionally, Theta is in advanced discussions with multiple project financiers to secure the additional capital required for the TGME gold project.
“The current gold price environment has prompted the board to change its strategy on project funding. Our July 2022 definitive feasibility study was based on a gold price assumption of $1,642/oz, but we have seen a significant rally in prices since then,” Guy said.
The TGME project, located near the historic mining town of Pilgrim’s Rest in Mpumalanga, is Theta’s primary focus. Following small-scale production from 2011 to 2015, the company is now concentrating on constructing and financing a new gold processing plant.
The company completed a feasibility study in 2022 for its first four mines—Beta, CDM, Frankfort, and Rietfontein—outlining a 12.9-year operation with an estimated 1.24 million ounces of contained gold.
