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Theta Gold Mines Secures A$110m Funding For Its TGME Gold Project In South Africa

Theta Gold Mines Secures A$110m Funding For Its TGME Gold Project In South Africa. Theta Gold Mines Limited is pleased to announced that it has entered into a non-binding Streaming Term Sheet with Sprott Resource Streaming and Royalty Corporation under which Sprott is to advance US$70 million (~A$110 million) cash in return for a gold stream on Theta’s TGME Gold Project in South Africa.

The Project is expected to deliver to Sprott up to 100,000 ounces of gold over its Life-of-Mine, for which Sprott will pay 10% of the gold price per ounce delivered under the stream. Theta has the option to buy-back 50% of the stream based on a pre-agreed price, following which Theta will deliver 2% of the ongoing gold production. Prior to initial gold delivery, Theta will pay in cash or scrip (at 10% discount to 5 days volume-weighted-average-price (“VWAP”)) on a semi-annual basis, 9.5% per annum interest to Sprott for the funds advanced.

Mr Bill Guy, Executive Chairman of Theta commented, “We are very pleased to announce this significant milestone in our project financing efforts for the construction of the TGME Gold Project. Sprott Streaming & Royalty is an experienced and well-regarded project finance partner to the mining industry; its parent Sprott Inc. is a New York Stock Exchange (NYSE) and Toronto Stock Exchange dual-listed group, and we are excited to be working with Sprott to re-develop South Africa’s very first gold field. The streaming deal is a much more cashflow friendly style of financing compared to a straight debt finance. It is less risky to a start-up project where the unique repayment mechanism provides the Company the flexibility to manage its cashflow as long as the minimum gold delivery requirements are met.”

Under the Term Sheet, conditions precedent to closing include the completion of technical, legal, and environmental and social due diligence, the receipt and review of the project’s final development budget and schedule, the completion of definitive documentation, and the receipt of applicable environmental permits, operating licences and regulatory approvals. Closing is scheduled by the first quarter of 2023 and the funds will be applied towards the construction of the TGME Gold Project, located in the Eastern Transvaal Goldfields in the Mpumalanga Province, South Africa. A due diligence team involving externally appointed consultants by Sprott shall start immediately; upon a satisfactory conclusion, a Binding Gold Stream Agreement between Sprott and Theta Gold shall be finalised, executed and announced to the market in detail. Sydney-based debt specialist the Kamara Group is advising and representing the Company to complete this project financing process.

Mr Bill Guy continued to say, “Once the Sprott funding is closed, the Company may commit to further upgrading our Ore Reserve base, as well as to potentially further expand our total mineral resource in order to increase production scale and life of mine from the existing stage one definitive Feasibility Study mine schedule, hence creating ongoing significant value growth for our shareholders. The Company recently published a definitive Feasibility Study (FS) 2 for the Project demonstrating robust economics for a horizontal stope underground mining and milling operation with low initial capital cost and high rate of return. An Environmental Impact Assessment (EIS) is ongoing with the local authorities and is expected to be completed later this year, along with the final approvals for two Water Use Licenses(WUL) under application”.

By Thomas Chiothamisi
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