Junior miner Theta Gold Mines has changed its strategy on the project funding structure for its South African gold project, chairperson Bill Guy said on Monday.

The ASX-listed company has opted to fully redeem its A$6-million secured bonds with 2Invest, freeing up its project interest to be available as collateral for future potential project funders.

Theta will use funds from a $8-million private placement to redeem the bonds. The company has received $6-million from the first tranche of a two-tranche, $10-million placement to Hong Kong Ruihua Investment (HRIM), along with a firm commitment for an additional $2-million from institutional investors.

Theta said that HRIM remained committed to the second tranche of the placement for $4-million.

Theta has also decided not to proceed with the streaming transaction initially proposed with Sprott Streaming and Royalty. Instead, the company is now concentrating on negotiations with Yellow River, a subsidiary of Power Construction Corporation of China (PowerChina). The discussions revolve around a proposed engineering, procurement and construction (EPC) agreement, which includes 70% deferred payment terms for the construction of Stage 1 of its TGME gold plant and tailings storage facility.

In addition to the EPC negotiations, Theta is engaged in advanced talks with multiple project financiers. These discussions are aimed at securing the additional funding necessary to complete the capital expenditure required for the TGME gold project.

“The current gold price environment has changed the board’s strategy on the project funding structure. Our July 2022 definitive feasibility study was done based on gold price assumption of $1 642/oz and we have witnessed a significant rally in gold prices since that time,” said Guy.

Theta’s project is located next to the historical mining town of Pilgrim’s Rest, in Mpumalanga.

Following small-scale production from 2011 to 2015, the company is currently focusing on the construction and financing of a new gold processing plant within its approved footprint at the TGME plant.

The company has completed a feasibility study released to the ASX two years ago, for the first four mines - Beta, CDM, Frankfort and Rietfontein. The base case comprises a 12.9-year mining operation and delivering 1.24-million ounces of contained gold.