Headquartered in Australia, Theta Gold Mines Limited (ASX: TGM) is a company engaged in the exploration and mining for gold. The company controls 62,000 hectares of gold mining and prospecting rights in the Transvaal gold fields through its controlling subsidiaries in the Republic of South Africa.
The company announced a positive Feasibility Study for the Theta Project today. The Theta Project is a gold project which includes the Columbia Hill deposit and part of the Theta Hill deposit within Mining Right 83 in South Africa. Mining Right 83 is fully authorized for underground mining and a modification to include open pit mining is in progress. The study was completed based on initial Ore Reserve within Mining Right 83 of 205.0 Koz Au (2.31Mt @ 2.76g/t Au).
The Feasibility Study confirmed the project economics and commercial viability of the Theta Project. The study indicated that the project has a significant cost advantage with an All in Sustaining Costs of USD764/oz over the 5?year Life of Mine (“LoM”), which is in the bottom quartile for South Africa producers. The results for the project are robust for shallow pits with an average depth of 70 to 90m as they deliver mill feed head grade LoM of 2.71 g/t Au.
The study showed that the project has high metallurgical recoveries - 92.6% metallurgical recovery for the first year of production and 91.6% for LoM. The study also reported that a peak funding of USD29.2 million is required for the project, and after permitting and financing, there will be a short nine months of construction/refurbishment period. The project’s financial modelling revealed that the project is financially viable to modern open-pit gold mining methods being applied for the first time in this historic goldfield.
The study shows that the project will deliver a substantial free cash flow generation post construction of USD65.7 million over LoM. The company aims to increase ore reserves and obtain additional TSF to extend LoM.
According to the Chairman of Theta Gold Mines Limited, Mr Bill Guy, even though a small part of the resource base was converted into a mining reserve, the study confirmed the project economics and commercial viability of the project. The company expects to add considerable additional reserves to the Theta Project potentially.
In another announcement today, the company notified that an increase in the global Mineral Resource (JORC 2012) to over 6 M oz Au (44.8 Mt @ 4.18 g/t Au, 74% Inferred and 26% Measured), with a 30 per cent increase for open cut resources. It included:
- 3Moz open cut resources (13.08Mt @ 3.12g/t Au)
- 5Moz Underground resources (26.3 Mt @ 5.4 g/t Au)
The company informed that Theta Gold has also delivered the Company’s maiden Ore Reserve following the last quarter’s successful drill campaigns. The Company targets to make a solid production platform from Theta Project focussed mainly around the deep, open?cut resource.
The company’s stock advanced 8.3 per cent today, closing at AUD 0.130 on the Australian Securities Exchange. The stock fluctuated between a high and low value of AUD 0.13 and AUD 0.12, respectively. The stock has generated a YTD return of 41.18 per cent.
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