Theta Gold Mines Ltd underground pre-feasibility study shows extensive high-grade

‘s () maiden underground pre-feasibility study (PFS) for the TGME Underground Project in South Africa shows that the extensive flat high-grade narrow reef systems of East Transvaal Goldfield can be mined economically.

The company’s chairman Bill Guy said that the PFS demonstrated that the use of modern mechanised mining and metallurgy could deliver strong project economics.

This maiden PFS covers the Beta, Frankfort and CDM underground (UG) mines, which form part of the Central Northern area and are collectively referred to as TGME Underground  Project.

The TGME Phase 1 Underground Project, which excludes the open pits, has compelling financials based on a forecast gold price average of US$1,570/ounce and a ZAR/USD exchange rate of 15.9. These include:

• Pay-back period from first gold 13 months;
• Pay-back period from start of mining 22 months;
• 419,000 ounces gold delivered to plant over initial Life of Mine (7.67 years);
• By the third year, production over 60,000 ounces gold/year (recovered);
• US$241.2 million EBITDA over LoM; 
• Internal Rate of Return (IRR) 82%; 
• US$91.2 million Net Present Value (NPV); and
• US$905/ounce gold all-in sustaining cost (AISC) over LoM, bottom quartile for South Africa producers.

It estimates total LoM capital expenditure of US$79 million including:

• Peak capex for first three years of US$37 million (oxide and backfill plant and beta mine development);
• Year 4 of US$27 million sulphide circuit and Frankfort and CDM mine development; and
• US$15 million of remaining capital to develop and sustain operations. 

“Economical mining clearly demonstrated” 

The PFS shows that the narrow high-grade reef system can be mined with modern mechanised mining techniques (safer, increased productivity and minimum dilution), and that the gold can be recovered utilising modern metallurgical technologies (Ultrafine grinding and Intense CIL). 

This proof of concept is part of de-risking the underground projects.

Chairman Bill Guy said: “Now that the company has generated a PFS for the TGME Underground Project, we can optimise our development strategy based on confident numbers.” 

ASIC cost on yearly basis for TGME Underground Project. 

Process plant operations

The UG plant will be able to accommodate a variety of ore sources incorporating different streams that require different treatment solutions while sharing front-end (crushing) and back-end (CIL, elution, gold room, tailings) infrastructure. 

It will also be further expandable with modular additions and the CIL section will also be shared with the 50kt/m Theta Open Pit plant (oxide ore plant).

The existing process plant will be upgraded and refurbished to treat ore from Beta and will follow a conventional Carbon-in-Leach (CIL) configuration at a rate up to 30ktp/m.

Frankfort ore will be concentrated via Dense Media Separation (DMS) at the shaft and only the concentrate will be trucked to the process plant – the ore from CDM mines will also follow the same process route.

The DMS will process up to 15,000tp/m and discards will be stockpiled at the shaft.

The existing tailings facility will be re-commissioned for the first phase, while for subsequent phases the CIL Tailings will be pumped into the mined-out workings of the Beta mine adjacent to the process plant as backfill. 

Potential upgrading of mined ore from Beta and CDM via XRT or DMS is under investigation and not factored in but it could potentially further increase gold production. 

Bottom quartile of costs

Guy said: “At a 63% conversion ratio, Theta Gold still has 3.5 million ounces of gold in underground resources to develop in order to extend LoM and increase production into the future.

“Due to the shallow, high grade and…