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Theta Gold Mines higher on delivering maiden 490,000-ounce underground high-grade gold reserve

This brings the total open pit and underground global mining reserve at the Theta Gold Project in South Africa to 580,000 ounces.

Theta Gold Mines Ltd - Theta Gold Mines higher on delivering maiden 490,000-ounce underground high-grade gold reserve
There has been a 63% conversion factor for the maiden underground mining reserve.

Theta Gold Mines Ltd (ASX:TGM) (OTCMKTS:TGMGF) traded higher after delivering a maiden underground mining reserve for the high-grade TGME Underground Project in South Africa - 490,000 ounces of gold at 5.49 g/t gold.

The underground mining reserve is the result of a pre-feasibility study for the company’s Beta, Frankfort and CDM mines, all in the Central Northern region of South Africa.

As a result, the Theta Project now has a global mining reserve of 580,000 ounces of gold at 3.98 g/t from a total mineral resource of more than 45.5 million tonnes at 4.17 g/t for in excess of 6 million ounces.

Converting to a mining reserve

Theta chairman Bill Guy said the result from the mines, referred to as the TGME Underground Project, showed that a significant portion of the underground 4.5-million-ounce resource can be converted into a mining reserve.

“The historical mining techniques of the mineral field in which we operate meant we have traditionally carried a large percentage of our mineral resources in inferred categories,” he said.

“Now we are showing clearly that modern mining and production methods will allow us to develop this extensive shallow underground reef system.”

Investors were excited too, with TGM shares as much as 14% higher to 29 cents, a three-week high, while the company’s market cap is approximately $127.7 million.

The details

An impressive 63% of the indicated resource was converted for the maiden underground mining reserve, and 3.5 million ounces of the inferred underground resource remains for future conversion.

The 6-million-ounce Theta global mineral resource includes:

  • Underground - 4.5 million ounces (26.3 million tonnes at 5.4 g/t in measured, indicated, and inferred categories with 4.87 million tonnes at 6.20 g/t for 969,400 ounces in the measured & indicated categories)
  • Open pit - 1.3 million ounces (13.02 million tonnes at 3.25 g/t in the indicated and inferred categories.) Of this, there is 9.6 million tonnes at 2.99 g/t (indicated & inferred; 0-130 metres depth) for 917,000 ounces at Theta Project. This includes a probable ore reserve of 2.16 million tonnes 2.31 g/t at a 0.4 g/t cut-off for 161,000 ounces.
  • Tailings & Rock dumps – 174,000 ounces in the indicated & inferred categories.

TGME Underground Project is close to the central processing plant and the Starter Theta Open-pit Project, with the mineral resource inventory sitting adjacent to the TGME Gold Plant Footprint.

The PFS has confirmed the project can be economically mined by modern mechanised long-hole stoping, allowing for on-reef development which reduces development costs, with little development in waste rock.

Steady news flow

Guy said investors could look forward to a steady stream of news flow for the project.

“We have shown in a very short period that we can deliver an initial ore reserve, with high grades achieved, and as we go forward with the underground mine development, the Life of Mine (LOM) can be extended as more inferred resources are converted into mine reserve as part of the underground development work,” he said.

“Later this year, a Rietfontein scoping study will be upgraded to PFS, allowing for another round of mining reserve upgrade, and we are very excited about the potential to follow-up these results with future reserve conversions.

“As shareholders are also aware, we are working continuously on securing the permit to commence open pit mining.

“The open-pit process is taking longer than first anticipated due to a backlog of applications caused by the COVID-19 pandemic which the relevant South African departments are diligently working their way through and any delays in open pit permitting will not affect our ongoing works program.

“Theta Gold is pleased to be breathing life into this large goldfield, delivering reserves and showing a path to production.

Next steps

“It is exciting for the team and the shareholders as we develop the initial projects and look out to the future to other 39 historical mine sites that require exploration and development work,” Guy said.

“Following this success of the maiden underground mining reserve, the team is refining the Development Strategy for our 5-Year Plan.”

- Daniel Paproth

Quick facts: Theta Gold Mines Ltd

Price: 0.26 AUD

Market: ASX
Market Cap: $130.25 m


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