PERTH (miningweekly.com) – A prefeasibility study (PFS) into ASX-listed Theta Gold Mines’ TGME underground project, in South Africa, has estimated that the project would cost some $79-million to develop.

Theta Gold Mines on Tuesday told shareholders that the TGME underground project was expected to deliver some 419 000 oz of gold to the Theta gold project over a mine life of over seven years.

During the first three years of operation, the underground mine would require a capital investment of $37-million to fund the oxide and backfill plant, and Beta mine development, while a further $27-million capital injection would be required in the fourth year of operation to fund the sulphide circuit and Frankfort and CDM mine developments.

A further $15-million in capital funding would be required to develop and sustain operations.

All-in sustaining costs for the project have been estimated at $905/oz over the life-of-mine, putting it at the bottom quartile for South African gold producers.

The PFS estimated that the project would have a pay-back period from first gold of 13 months, and 22 months from the start of mining. Earnings before interest, taxes, depreciation and amortization over the life of the mine have been estimated at $241.2-million, with the project forecast to have a $91.2-million net present value and an 82% internal rate of return.

“The TGME underground PFS clearly demonstrates that the extensive flat high-grade narrow reef system of East Transvaal Goldfield can be mined economically, and modern mechanised mining and metallurgy can deliver strong project economics,” said Theta Gold Mines chairperson Bill Guy.

“Now that the company has generated a PFS for the TGME underground project, we can optimise our development strategy based on confident numbers. At a 63% conversion ratio, Theta Gold still has 3.5-million ounces of underground resources to develop in order to extend life-of-mine and increase production into the future.”