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MINING | Theta Gold Mines
THETA GOLD MINES A new name for a company operating in South Africa’s oldest goldfield
Resource Global Network
MINING | Theta Gold Mines
Transvaal Gold Mining Estate (TGME) lays claim to being South Africa’s first gold mining company after being incorporated in 1895, roughly a decade after gold was unearthed from a site called Pilgrim’s Rest in the then Province of Transvaal. This was an unprecedented discovery at the time because the gold mineralisation ran for miles underground, as opposed to the sporadic alluvial gold finds that were commonplace in the region previously. This singular discovery was to have an untold impact on South Africa’s history, kickstarting the famous Witwatersrand Gold Rush which birthed South Africa’s commercial-scale gold mining industry and the city of Johannesburg, which has since grown to become the nation’s largest city today. Ownership of TGME and the endless mining claims around Pilgrims Rest have been passed through a number of public and private hands during its 124-year history, with ASX-listed Theta Gold Mines the current incumbents in 2019. Theta purchased TGME in 2012 and initially planned to focus on the underground
Resource Global Network potential of 43 historical mines around Pilgrim’s Rest, Barberton and Sabie, located approximately 370 km Northeast of Johannesburg in today’s Mpumalanga Province. However, the company’s recent name change signifies a new focus on open pit mining across the prospective area that spans 62,000 hectares and contains a JORC resource of 39.15 million tonnes (Mt) at 4.6 g/t Au for 5.75 million ounces (Moz) - one of the largest JORC resources owned by a junior explorer on the ASX today. “The name change from Stonewall Resources to Theta Gold Mines signals a clear directional change towards progressing open cut strategies, as well as a new board, and a new company constitution,” says chairman Bill Guy. “This large 620 km2 field has never experienced open cut mining. In Western Australia, the approach of drill testing the old historical underground workings to delineate shallow open cut resources has delivered several newly operational mines.”
Theta Hill The company is focusing its efforts on the Theta Hill deposit within the Pilgrim’s Rest claim and has recently completed a scoping study on the project, which defined a 4.5Mt resource at 4.14 g/t Au for 600,000 oz (85% Inferred) and confirmed the potential low cost of the development and operation.
MINING | Theta Gold Mines
The scoping study indicated all-in sustaining
The refurbishment of TGME’s existing CIL
costs (AISC) at US$569 per oz along with
plant is the only significant order of business
a low capex requirement of $16 million,
for Theta at a capital cost of $11 million,
primarily due to the fact that a large amount
which will provide the plant with new
of infrastructure is already in place in the
crushing and milling circuits, additional CIL
surrounding area.
circuit tanks, and the upgrade of the elution circuit and gold room.
“There is already a large permitted footprint near Theta Hill with an existing CIL plant
Theta’s scoping study also specified a LOM of
and all associated infrastructure including
7.6 years with a 67,000 oz per annum average
offices, stores, workshops and weigh bridge.
production rate, plus a strong IRR of 132%
In addition, there is an existing tailings dam
and a post-tax/royalty net cashflow of $213
and associated pollution control dams and
million for the LOM.
return water pond. The office, store and workshop infrastructure is currently in use by
While these findings clearly indicate a robust
the onsite exploration management team,”
project, Theta is hoping to further validate
Guy explains.
these numbers in its feasibility study due in the first quarter of 2019.
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“In the feasibility study, the company is
Additional targets have been identified
planning on confirming the positive project
adjacent to or near Theta Hill which show
economics which came out of the scoping
open-cut potential and could add incremental
study and have a mining reserve to cover two
tonnages to the mine plan. Meanwhile, the
to three years of production.
opportunity to develop a second, high grade open-cut mine at Vaalhoek is also being
“The feasibility study will also allow the
explored by Theta.
board and company to move forward with confidence and a positive study will allow
Theta’s chairman says that in 2019 the
different financial models and financing
company will cost out drilling for the
options to be examined.”
remaining targets around Theta Hill in order to eventually add those into the mining
Beyond its current focus on completing the
reserve, while a drill programme has been
feasibility study for Theta Hill, the company
scheduled at Vaalhoek for the same purpose.
harbours ambitions of undertaking multiple mine developments under a long-term
In addition, the new Columbia Hill discovery
production target of +100,000 oz per annum.
is currently being drilled to test for extensions of the orebodies. “As the year goes on, the exploration team will also
MINING | Theta Gold Mines
“The name change from Stonewall Resources to Theta Gold Mines signals a clear directional change towards progressing open cut strategies, as well as a new board, and a new company constitution� Bill Guy, chairman
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MINING | Theta Gold Mines
“We believe that our strong environmental focus, plus the offer of two community years ago the jobs“About to a mining with a 130-year history, will build a idea was floated to pivot strong case to support mining again in the local area.”
from being an iron ore exporter to a local steel producer. The idea was that we would build a steel mill in front of the iron ore deposit.”
Resource Global Network consider the underground resources and the
“In broad terms, the company is already
remaining 43 historical mine sites,” Guy adds.
compliant with the main financial aspects
South African mining – on the mend?
of the new Mining Charter,” says Guy. “The company has a 26% black economic empowerment (BEE) ownerships spilt
The reputation of South Africa’s mining
between employees and local community
industry took a beating during the final
groups.
months of Jacob Zuma’s presidency, with corruption allegations swirling around the
“Moreover, the company sees South Africa as
government and all major areas of business,
having many advantages over its neighbours.
including mining.
It’s the most developed country in Africa with strong rule of law, roads, freeways, ports,
Adding to the sector’s woes was an ill-
power stations, a large mining workforce and
conceived rewrite of the Mining Charter
operating mines through the country.”
in 2017 - which was met with vociferous opposition, a stagnant gold price and
Further throwing its weight behind the
continually rising input costs, plus sporadic
sector, Theta recently joined the re-branded
industrial action relating to job cuts, worker
Minerals Council South Africa (formally the
safety and wage grievances.
Chamber of Mines), adding its voice to a respected body of members from across the
All these factors combined to dent confidence national minerals industry. in the mining industry and damaged the jurisdiction. However, after new President
Corporate social responsibility
Cyril Ramaphosa pledged to fix the struggling
Theta also maintains a committed approach
national economy in 2018, hopes are high
to corporate social responsibility (CSR),
that he can steer the mining sector back to
and is involved in various social projects
prosperity.
in communities surrounding the TGME.
reputation of South Africa as a business
The most significant of these is an ongoing The first sign of this recovery materialised in
commitment to local schools, which sees
September when the government published
the company financially support additional
a revised version of the Mining Charter after
teachers at the local school, along with a
months of engagement with key stakeholders
student meal programme and extra teaching
in the industry. The updated version upheld
aids.
plans to raise the level of black ownership to 30% for new mining rights, but allowed
“This year the company will again provide
companies that have already met the 26%
sponsorship to the South African National
threshold to remain at that level.
Gold Panning Championships, which have
MINING | Theta Gold Mines
been held on the company’s mining claims at Pilgrims Rest for the last 21 years. “The event attracts a large number of tourists but is primarily a family day with races and events taking place. Overall, the Panning Championships has a very positive affect on the local economy,” says Guy.
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From an environmental perspective, Theta
“We believe that this strong environmental
has explored many ways of reducing its
focus, plus the offer of jobs to a mining
impact on the environment and this is
community with a 130-year history, will build
evidenced by the company’s choice of mining
a strong case to support mining again in the
method for the Theta Hill project.
local area.”
Contour haulback mining is mostly used
In 2019, the company will continue
in the coal industry for mining shallow
drilling and development at Theta Hill as
thin seams but will be utilised at Theta Hill
it progresses towards the ultimate goal of
to significantly reduce its environmental
pouring gold bars, with the first big milestone
footprint and the cost of earth works too.
set to arrive in early 2019 when the feasibility study is published.
“Applying coal mining techniques and technologies into a gold mine is innovative
“Bringing the shallower open pit resources
and means that mining and rehabilitation
onstream first will then allow further
are carried out simultaneously, leaving the
underground mine exploration and
natural contours of the hill intact with no
development to be funded out of cash flow,”
remnant open pit.
concludes Guy.
ASX:TGM
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Published by Anderson Murray Media Ltd
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