Theta Gold moves forward with TGME Project
Theta Gold Mines (ASX: TGM) has reached a pivotal milestone by officially approving the commencement of mining operations at its TGME Gold Project, located approximately 370 kilometers northeast of Johannesburg, South Africa. This development coincides with gold prices currently hovering around US$3,264 per ounce, nearly double the price used in the company’s 2022 feasibility study.
That earlier study, which assumed a gold price of US$1,642/oz, indicated a potential annual output of 80,000 to 100,000 ounces over a 13-year mine life, at an impressively low all-in sustaining cost (AISC) of US$834/oz. Even under those conservative assumptions, the project showed strong financial metrics, with a net present value (NPV) of US$432 million.
Soar in gold price
With the surge in gold prices since mid-2022, an updated feasibility study is now underway and expected to be completed in the September quarter of 2025. This revised analysis is anticipated to reflect significantly improved project economics.
Meanwhile, early-stage construction is already in progress. Bulk earthworks and civil engineering activities have begun, and part of the funding for these efforts will come from a recently announced private placement. Hong Kong-based investor Ruihua Green Development Limited is subscribing to over 47 million new shares at A$0.13 each, representing a modest 7.3% discount to TGM’s 15-day volume-weighted average price (VWAP). Additionally, the investor will receive more than 23 million options exercisable at a minimum of A$0.13, or an 8% discount to VWAP.
This placement will generate approximately A$6.2 million, which will be used for continuing civil works, preparing the plant site, acquiring Stabilenka geotextile material for ground reinforcement, advancing water management systems, and supporting general working capital needs.
In parallel with equity financing, the company has also secured a significant US$35 million loan facility from South Africa’s Industrial Development Corporation (IDC). This government-backed financing comes with favorable terms, including a seven-year duration and an 18-month grace period before principal and interest payments begin. Completion of legal, technical, and environmental due diligence has paved the way for TGM to start seeking additional funding through commercial lenders.
To manage this syndication process, Theta has appointed Moore Debt Advisory, a specialist firm based in South Africa. An information memorandum has already been circulated to potential co-lenders. With over 1 million ounces of mineable reserves out of a 6.1 million-ounce resource, TGM’s transition into the production phase is becoming more tangible. Chairman Bill Guy called this moment “a defining milestone” in the project’s journey, emphasizing the strategic progress being made through both equity and debt funding channels.
