With gold prices still sitting at lofty heights, Theta Gold Mines (ASX: TGM) has taken a major step forward in their South African gold operations with the AUD $550,000 purchase of a ball mill. 

The secondhand mill was previously used by Glencore with independent expectations confirming the mill to be in excellent condition. The purchase enables Theta to expedite production operations at a time when market conditions are highly favourable for gold producers. 

“An equivalent new 2.5MW ball mill with spare parts costs ~A$5.5m and would take up to 40 weeks from order to delivery,” said Chairman, Bill Guy. 

“Instead, Theta has managed to secure a secondhand mill in excellent condition, and with an inventory of vital spare parts for less than A$800,000 (incl. dissemble & delivery), and pleasingly, it can be relocated to the TGME Processing plant by January 2020. 

“The purchase also provides certainty of grinding capability for the mine and, being larger than initially planned for in the feasibility study, allows for future throughput increases. Securing this ball mill marks another key milestone towards first production.”

With the Ball Mill being located at Rustenberg, South Africa, the Company anticipates relocation of the mill to their Pilgrims Rest project by January 2020. 

Within Pilgrims Rest, Theta has a significant gold resource in the historically high yielding region, where their combination of JORC-compliant prospects combine for approximately 6 million ounces of gold (44.8Mt @ 4.18g/t Au).

Their three major goldfields are located 370km NE of Johannesburg where the fields have produced more than 6.7Moz of gold since 1880. 

Gold prices have been rising notably since September 2018 when the price of Gold was US$1180 per ounce and now trade at around $1500 a year later. This has significantly increased gold project valuations whilst reducing project payback periods for gold developers advancing to production.

Theta’s project feasibility study completed in May 2019, identified the Project to have Post‐tax NPV5% of USD49.6m and 65.1% IRR. 

The Company recently completed an $8m capital raise to advance production facilities with those shares to be held in escrow until December 2020.