Theta Gold’s Mining Approval Hinges on Debt Syndication and Feasibility Update
Theta Gold Mines has approved the Decision to Mine for its TGME Gold Project in South Africa and raised US$4 million through a private placement, advancing its path toward production amid rising gold prices.
- Board approves Decision to Mine for TGME Gold Project
- US$4 million private placement completed with existing institutional investor
- Feasibility study update underway reflecting gold prices over US$3,000/oz
- Commercial bank syndication progressing with US$35 million loan facility secured
- Funds allocated to bulk earthworks, civil engineering, and working capital
Board Approval Marks Major Milestone
The board of Theta Gold Mines Limited (ASX – TGM) has formally approved the Decision to Mine for its flagship TGME Gold Project located in South Africa’s Mpumalanga Province. This pivotal endorsement follows preparatory bulk earthworks and civil engineering activities already underway on site, signaling a transition from development to production readiness.
Capital Raise Strengthens Financial Position
In tandem with this milestone, Theta Gold successfully completed a US$4 million (approximately A$6.2 million) private placement with Hong Kong Ruihua Green Development Limited, an existing institutional shareholder. The placement involved issuing over 47 million new shares at 13 cents each, alongside unlisted options, providing the company with fresh capital to accelerate construction and operational groundwork.
Feasibility Study Update Reflects Bullish Gold Market
The company is updating its 2022 feasibility study, which initially projected a net present value (NPV) of A$432 million based on a gold price of US$1,642 per ounce. With gold prices now exceeding US$3,000 per ounce, the economics of the TGME project are poised to look even more compelling. The updated study is expected to be completed in the third quarter of 2025, potentially enhancing investor confidence and project valuation.
Advancing Debt Financing Through Syndication
Theta Gold is progressing its commercial bank syndication to complement project funding, building on a US$35 million loan facility approved by the Industrial Development Corporation (IDC) of South Africa. The loan offers a seven-year term with an 18-month moratorium on capital and interest repayments, providing financial flexibility as the project ramps up. The company has engaged Moore Debt Advisory to lead the syndication process, distributing information to potential co-lenders.
Strategic Use of Funds and Consultant Shares
Funds raised will be directed toward critical on-site activities including bulk earthworks, plant site terraces, civil engineering, geotextile reinforcement purchases, and water management systems, alongside supporting working capital. Additionally, Theta Gold is issuing shares to consultants in lieu of cash payments, reflecting a strategic approach to managing expenses while maintaining momentum.
Looking Ahead
Chairman Bill Guy described the Decision to Mine as a defining moment, emphasizing the company’s focus on executing its development strategy amid a favourable gold price environment. With financing arrangements advancing and operational groundwork underway, Theta Gold is positioning itself to unlock significant value from its extensive South African gold assets.
Bottom Line?
Theta Gold’s approved mining decision and fresh capital injection set the stage for a critical growth phase, but the market awaits the updated feasibility study and finalised debt syndication to fully gauge project potential.
Questions in the middle?
- How will the updated feasibility study revise project economics amid soaring gold prices?
- What are the terms and potential partners involved in the ongoing commercial bank syndication?
- How quickly can Theta Gold transition from earthworks to full-scale production at TGME?