G O L D M I N E S
A N N U A L R E P O R T 2 0 2 2
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED Theta Gold Mines Limited
Contents
Chairman’s Letter .................................................................................................................... 3
Review of Operations .............................................................................................................. 4
FY22 Highlights ........................................................................................................................ 5
Theta’s TGME Underground Gold Mine Definitive Feasibility Study (FS) ................................ 7
Environment, Social and Governance (ESG) .......................................................................... 17
Ore Reserve and Mineral Resource Statement ..................................................................... 25
Disclaimer’s ........................................................................................................................... 27
Corporate Governance Statement ........................................................................................ 31
Directors’ Report ................................................................................................................... 36
Remuneration Report ............................................................................................................ 45
Directors’ Declaration ........................................................................................................... 52
Auditor Independence Declaration ....................................................................................... 53
Financial Statements ............................................................................................................. 54
Independent Auditor’s Report .............................................................................................. 91
Shareholder Information ....................................................................................................... 96
Directory ................................................................................................................................ 98
2022 Annual Report
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Theta’s team has worked very hard to reduce
its
environmental footprint; The project is an extension of
existing underground mines. There will be only minor new
ground disturbances as infrastructure will be placed on
the existing footprint, where the higher-grade ore will
lead to reducing chemical consumption and processing
cost per ounce of gold. The social contract with the local
population will be
further enhanced by mining
underground, which is well understood in the area. The
region has over 150 years of underground mining history.
There was a steady transition of the company from
exploration to development as the company
looks
towards the next major repositioning to a gold producer.
During the year, 83% of all funds raised went to South
Africa to develop the TGME Underground Project. During
this process, the share register has also changed, with the
number of shareholders recently surpassing 1,200.
the project
Moving forward into the 2023 financial year, the company
will work on completing
financing
requirement, permitting, further exploration work, and
underground development. Once project financing is
complete, we will begin the mine build phase. Currently,
the company has 30 staff on site led by our Chief
Operations Officer, a proven African gold mine builder Mr.
Jacques Du Triou.
the continued support
We appreciate
from our
shareholders, and we welcome new shareholders to the
share register. The company looks forward to continuing
to progress project development and deliver good news
for shareholders in 2023.
Thank you for your continued support.
BBiillll GGuuyy
Charles (Bill) Guy
Chairman
CHAIRMANS LETTER
Dear Fellow Shareholders,
On behalf of the Board of Directors, I am pleased to
present the 2022 Annual Report for Theta Gold Mines
Limited (ASX: TGM | OTC: TGMGF). In the last twelve
months, the company has delivered its 2021 promise to
change direction to underground mining. The TGME
Underground Feasibility Study (FS) was completed in July
2022, along with the submission of the Environmental
Impact Assessment (EIA) for Mining Right (MR)83.
The company completed a FS for the first four mines Beta,
CDM, Frankfort and Rietfontein (TGME Underground
Project). The Base Case life of mine (LOM) plan will
comprise a 12.9-year mining operation starting in 2024 to
deliver a production of 1.24 million ounces of contained
gold. Peak production is over 100,000 ounces per year. By
adding the fourth mine Rietfontein to the mining
schedule, there has been a significant scale-up from the
April 2021 pre-feasibility study with a production rate of
just above 60,000 ounces per year.
The estimated development capital or peak funding
requirement is US$77 million (with a total Capex of
US$100 million), with the project forecast to generate a
pre-tax NPV10% of US$324 million (A$432 million) and pre-
tax Internal Rate of Return (IRR) of 65% at the forecast
average gold price of US$1,642/oz over the LOM.
Underground mining will deliver higher-grade ore to the
gold plant with a much smaller environmental footprint
that’s well supported by the local community and key
stakeholders, with access to a larger resource base of 4.5
million ounces of underground mineral resources.
The company has 6.1 million ounces of total gold
resources under management. The new multi-mines
strategy delineated by the Board set a goal to deliver
160,000 ounces of gold per year over 5 years, offering a
clear growth profile in production and shareholder value.
Environment, Social and Governance (ESG) is enhanced by
the TGME Underground Project. Over 20 environmental
studies were completed for Mining Right (MR)83. The
Impact Assessment Report and
final Environmental
Environmental Management Programme
(EIA/EMPr)
have been submitted to the Department of Mineral
Resources and Energy (DMRE) together with the final
technical documents for the integrated water use licence
application to the Department of Water and Sanitation
(DWS) for final decision.
The findings from the EIA/EMPr and specialist studies
have not elicited any fatal flaw. The outcome of the
decisions from the DMRE and DWS on the applications are
expected in Q1, 2023.
2022 Annual Report
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
REVIEW OF OPERATIONS
OVERVIEW
Theta Gold Mines Limited (“the Company” or “Theta
Gold” or “TGM”) is a gold exploration and development
company that holds a range of prospective gold assets
through its 74%-owned subsidiary Transvaal Gold Mining
Estate Ltd (TGME) in a world-renowned South African gold
mining region. The Company’s shares are dual listed on
the Australian Securities Exchange (ASX: TGM) and the
OTC Markets in the United States (OTC: TGMGF) with
Depository Trust & Clearing (DTC) Eligibility.
The Company’s TGME Underground Gold Mine Project
(“The Project” or “TGME Project”) phase one consists of
four existing mines, Beta, Frankfort, CDM and the
Rietfontein mine. The Project is located next to the
historical gold mining town of Pilgrim’s Rest, in the
Mpumalanga Province, some 370km northeast of
Johannesburg or 95km north of Nelspruit (the Provincial
Capital City) and includes more than 43 historical mines
identified across the vast prospective gold field of 620
square kilometres (62,000 hectares).
The Company delivered its very first definitive Feasibility
Study (FS) in July 2022 which presents a clear pathway to
production via the re-development of TGME’s gold assets
and is currently focused on the holistic strategy to deliver
long term organic growth, with initial development
focusing on the permitting of six mines to target a
production profile of 160,000 ounces Au per annum. The
TGME Project (Phase 1) incorporates the first four mines.
In April 2021 Theta declared a maiden underground
mining reserve of 419,000 oz @ 5.49 g/t Gold, along with
the first Maiden Underground Pre-Feasibility Study. The
Mining Reserve were based on only 16% of the 4.5 Moz
underground gold resource and incorporated only three
mines across the project area.
Figure 1: Location of Theta Project
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
FY22 HIGHLIGHTS
Feasibility Study (TGME Underground Gold Mine Project)
• TGME Feasibility Study1 delivers 1.24Moz contained gold production, underpinning an initial 12.9-year mine life.
•
Strong financial return based on LOM plan (at average gold price of A$2,189/oz) with first production targeted for
Q2, 20242 including:
o Undiscounted free cash flows of US$508m, (A$678m), pre-tax US$717, (A$956m);
o NPV (at a 10% discount rate) of US$219m, (A$292m), pre-tax US$324m, (A$432m);
o Capital payback period of 31 months;
o Pre-tax IRR of 65%; and
o Peak production over 100,000 oz Gold.
• All-in-sustaining Cost (AISC) of US$834/oz (A$1,112/oz) over LOM sits on the bottom quartile of South Africa and
Australian gold producers;
• Peak Capital requirement is US$77m, (A$103m), total capital requirements US$174m, (A$232m), and
•
Front-End Engineering Design (FEED) of the TGME gold plant completed, forming an important input towards the
finalisation of the definitive Feasibility Study (FS) of the TGME underground project3.
Trial Mining Successfully Completed
• The trial mining work started in September 2021 focused on rock engineering and mine support systems, drilling,
and blasting technics as well as cleaning of broken ore in support of the definitive FS completed in July 2022.
• The trial mining at Frankfort Mine was a success and proved that the planned mechanical long-hole drilling applied
to a narrow vein orebody will achieve the desired outcome and open endless possibilities within these goldfields.
As part of the ongoing trial mining within the project scope, investigations were undertaken in accessing suitable
equipment to allow for bulk gravity gold sampling for exploration work in targeted areas across the tenements. A
centrifugal concentrator was procured, which will be utilized to test different ore types and attain an understanding
of potential gravity gold recovery.
Figure 2: Low-Profile Loader entering Frankfort mine
1 Ref to ASX release dated 27 July 2022 titled “Theta’s TGME Project Definitive FS Confirms NPV10% of A$432 million at US$1,642/Oz Gold price”
2 First gold produced timing will be subject to securing funding and obtaining all necessary regulatory permitting approvals.
3 Refer to ASX release dated 20 June 2022 titled “TGME Gold Project Update”
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Permitting
• The Company announced in July 2022 4 that the final Environmental Impact Assessment (EIA) Report and
Environmental Management Programme (EIA/EMPr) have been submitted to the Department of Mineral Resources
and Energy (DMRE) and the final technical documents for the integrated Water Use License (WUL) application to
the Department of Water and Sanitation (DWS) for final decision.
• The outcome of the decisions from the DMRE and DWS on the applications are expected in Q4 of 2022 with an
additional 90-days review and objection period. A positive decision from the competent authorities will enable the
Company to commence with its MR83 underground mines build.
• Over 20 studies have been completed as part of the EIA process. The findings from the EIA/EMPr and specialist
studies have not identified any fatal flaw, unaddressed objection, or significantly high impact ratings. The requisite
mitigation measures are all imminently feasible and this provides all interested and affected parties the confidence
that the impacts of our proposed activities will not threaten the environment.
• An application for an Atmospheric Emissions License (AEL) was granted for the operation of the processing plant by
the Department of Forestry, Fisheries and the Environment (DFFE) in September 2022 along with a State Forest
Licence issued for the Frankfort Mine5.
Table 1 Environmental Approvals Granted for Mining Rights (MR) 83- Progress Table
1. Status of environmental permits as at the completion of this annual report.
Corporate
• Raised up to AU$11.9 million during 2022 in development funding made up as follows:
o AU$5.9 million of capital raised (before costs) through the issue of shares via private placement and Share
Purchase Plan, and
o AU$6 million secured bonds issued to 2Invest AG6 a large European fund who is a cornerstone institutional
investor on the register and holder 6.28% of the shares in Theta Gold.
• Completion of the Focus Minerals Limited (FML) off-market takeover offer on 2 March 2022, resulting in the
Company receiving a total of 4,977,984 FML acceptances and gained approximately 417 new shareholders on the
TGM registry. As a result, TGM has issued 12,445,0027 new TGM shares as consideration under the 5-for-2 scrip for
scrip takeover offer representing approximately 2.83% of fully-paid FML shares on issue at the time.
4 Refer to ASX release dated 18 July 2022 titled “Permitting Update TGME Underground Gold Project”
5 Refer to ASX release dated 6 September 2022 titled “Two Approvals Granted for the TGME Underground Gold Project”
6 Refer to ASX release dated 30 July 2021 titled “Over AU$10M New Funding Package Secured, Led by a German Investor to accelerate the TGME Gold Project
Development”
7 Refer to ASX Releases dated 4 and 11 March 2022 titled “Applications for Quotations of Securities”
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
THETA’S TGME GOLD PROJECT DEFINITIVE FEASIBILITY STUDY (FS)
Theta Gold Mines Limited
The FS8 for the TGME Project was delivered on 27 July 2022, confirming Theta Gold’s potential to be a significant near-term,
high-margin, low-cost gold production project with tremendous opportunities for future growth. Based on the FS results,
the Project will provide robust financial returns from a long-life large underground mining operation for a modest capital
investment given the scale of operations envisaged.
The Project LOM will initially comprise a 12.9-year mining operation starting in Q1, 20239 and delivering LOM production of
1.24 Moz of contained gold. The estimated peak development Capital Expenditure (“Capex”) is A$103 million, with the
Project forecast to generate a pre-tax NPV10% of A$432 million and pre-tax internal Rate of Return (IRR) of 65% at a forecast
average gold price of A$2,189 per ounce. Based on these metrics, the Project has a projected capital payback period of 31
months.
The FS paves the way for a Final Investment Decision (‘FID’) by the Theta Gold Board in respect to funding negotiations and
on-going discussions with financiers with respect to full/partial debt and equity funding options. Theta Gold has appointed
a debt funding advisor to manage this important process and will provide updates in due course.
8 Refer to ASX Release dated 27 July 2022 titled “Theta’s TGME Project Definitive FS Confirms NPV(10%) of A$432 Million at US$1,642 / Oz Gold Price”
9 Start time will be dependent on securing necessary funding and permitting approvals.
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
KEY FEATURES OF PROJECT
Theta Gold Mines Limited
Note1. First gold pour is subject to securing funding and regulatory permits.
8
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Solid Growth Potential
Develop multiple mines, reaching
>160koz/a within five years, from the
resource base of +6Moz
Modern mining and treatment
methodologies enable
low-cost operations (AISC
3 decades
Capacity to expand to >160koz/a -
6 mine operation @ 80kt/m
6 UG MINES TARGETED FIRST OUT OF POTENTIAL >40
2022 Annual Report
Figure 3: Location of first 6 gold mine sites
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Units
Base Case
Reserve Plan
Table 2: Key Project Metrics
Description
Project Start Date
Qtr/Year-yyyy
Commercial Production Start Date
Qtr/Year-yyyy
Production build up period
Life of mine
Underground ore mined (LOM)
Mined Grade
Gold Mined (LOM)
Production Rate
Production Rate
Grind size
Gold recovered (average LOM)
Gold recovered (LOM)
Months
years
Mt
g/t
Moz
Kt/a
Kt/m
µ
%
Moz
Q1 2023
Q2 2024
Q1 2023
Q2 2024
14
12.9
6.46
5.95
1.24
540
45
106
87
1.08
14
7.3
2.85
6.09
0.56
540
45
106
87
0.49
Project economics below shows the sensitivities to the various gold price estimates and demonstrates the robust financial
returns of the Project. The FS completed in July 2022 used an average gold price of USD 1,642 / Oz as a base case.
Table 3: Project Economics at Various Gold Prices – Base Case (AUD)
Project Economics at gold price Unit
NPV @ 10% (real) Pre-tax
NPV @ 10% (real) Post-tax
IRR (%) Pre-tax
IRR (%) Post-tax
AISC
EBITDA annual average
EBIT annual average
Free Cash Flow (Pre-tax)
Free Cash Flow (Post-tax)
Development Capital – Peak
Funding
Capital Sustaining
Payback post-tax
Capital Efficiency (Pre-Tax
NPV/Dev Capital
Capital Efficiency (Post-Tax
NPV/Dev Capital
AUDm
AUDm
%
%
AUD/oz
AUDm
AUDm
AUDm
AUDm
AUDm
AUDm
Months
%
%
Forecast
(USD1,642/ oz
Avg)
432
292
65%
57%
1,112
92
80
956
678
102
49
31
422%
285%
USD1,500/oz USD1,600/oz USD1,800/oz USD2,000/oz USD2,200/oz
339
232
57%
50%
1,096
77
66
768
550
102
49
33
405
274
64%
56%
1,107
87
76
897
638
102
49
31
536
359
77%
67%
1,129
107
96
1,158
814
102
49
28
669
447
90%
78%
1,149
128
116
1,421
996
102
49
25
802
533
102%
87%
1,167
148
136
1,686
1,175
102
49
24
332%
395%
524%
653%
783%
226%
268%
351%
437%
521%
NOTES:
1.
2. Due to rounding, numbers presented throughout this document may not add up precisely to the totals, provided and percentages may not precisely
Converted to AUD from USD using AUD:USD exchange rate of 1.333.
reflect the absolute figures.
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Figure 4: Annual Gold Production – Base Case
Figure 5: Annual and Cumulative Cash Flow (Post-Tax) – Base Case (AUD)
NOTES:-
1. Forecast Prices averaging USD1,642/oz over LOM.
2. Converted to AUD from USD at exchange rate of 1.333 AUD:USD.
The TGME Project targets to restart historical underground gold mines located in a historically prolific gold mining region in
the Mpumalanga Province of South Africa. The Project Areas are centred in the town of Pilgrims Rest, some 370 km due
northeast of Johannesburg, and vast majority of the tenements were under TGME’s ownership since the late 1800s.
The Project targets the Beta (including the Beta North, Beta Central and Beta South sections), Rietfontein, Frankfort and
Clewer-Dukes Hill-Morgenzon (“CDM”) mines. A significant amount of gold resources remain underground which were not
mined historically due to technological limitations or limiting ore characteristics.
Beta is scheduled as the first operation to commence production, followed by Rietfontein, and finally CDM and Frankfort
simultaneously. In comparison to CDM and Frankfort, Beta and Rietfontein are higher-grade mines.
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
A gold plant, which acts as the central processing plant for all the historical operations, is situated in close proximity with a
maximum distance to operations of approximately 40km. A new facility will be established on this footprint to treat all the
ore from the surrounding operations.
Two scheduling strategies have been investigated in the FS. The Base Case considers a LOM plan targeting the total Mineral
Resources (Measured, Indicated and Inferred). The Ore Reserve Case considers a LOM plan targeting only Measured and
Indicated Mineral Resources.
This FS demonstrates the ability to achieve optimised cash flows by scheduling production from the operations. The mine
designs and associated costs per operational element feed into a combined operations financial model. The Ore Reserve
Case supports the declaration of compliant JORC Code 2012 Ore Reserves.
TGME Underground Gold Mine Development
As part of the preparation for the installation of the first phase new gold plant, TGME had appointed the services of Jet
Demolition to remove the redundant plant equipment. The process started in the second week of January 2022. Specialised
equipment were utilised for demolition, after which it was reduced in size and made ready for transport to scrap merchants.
The project to remove the old plant is now complete10.
Processing consultants Met63 was contracted to do a detailed design and costing of a processing plant designed for a feed
capacity of 45,000 tons per month which is equivalent to 67 tons per hour at 92% availability. A flow schematic is shown in
Figure 5.
Figure 6: Process Flow Schematic Phase 1
The FS has been split into three phases, allowing for various processing scenarios aligned with the mining development
program. The design of each phase is based on a stand-alone processing facility aligned with the mining plan of the ore body.
• Phase 1 – Carbon-in-Leach (CIL) Plant (Free-milling ore is process for the first 7 Years, see figure 6).
The design and costing of a 45,000 tons per month oxide ore processing plant including crushing, milling, CIL and
elution with gold Doré produced on site. Testwork undertaken on various “free-milling” ores has indicated high
undissolved gold losses, indicating the presence of small amounts of sulphidic constituents. This was particularly
evident when completing standard cyanidation bottle roll trials on the CDM mine samples. Subsequent additional
testwork supports this. As a result, the Phase 1 circuit will include a flash flotation stage post-milling to remove
sulphide associated materials before conventional cyanidation. This flotation mass pull will join the concentrator
(production scheduled in Phase 2).
10 Ref to ASX release dated 4 March 2022 titled “DFS Update and High-Grade Ore Sweeped from New Historical Mines”.
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
• Phase 2 – Gold Concentrator Plant
The design and cost of a 20,000 tons per month concentrating plant including crushing, milling, Density Media
separation (DMS) and flotation. The final products consist of a combined carbon and sulphide flotation concentrate.
The carbon flotation concentrate being processed through the CIL plant #3 and the sulphide flotation concentrate
is processed through the CIL plant #1.
• Phase 3 – Oxidative Leaching of Sulphide Concentrate
The Phase 3 plant includes a 45,000 tons per month Leach-ox processing plant that was designed and costed,
including crushing, milling and carbon/sulphide flotation. The phase 3 plant consists of both the gold concentrator
plant as well as the CIL plant as described in Phase 1 and Phase 2. The carbon flotation concentrate processed in a
dedicated CIL circuit (CIL plant #3), sulphide flotation concentrate oxidized under atmospheric conditions with liquid
oxygen injection and high shear reactors. Oxidised product to be treated in a separate batch CIL process (CIL #1)
with the tails treated in a larger CIL (CIL plant #2), that also processes the flotation tails as well as “free-milling” ore
feed. This option allows for all recovered gold to be produced as Doré on-site with no concentrate produced.
Although there are some shared infrastructure and processing equipment between the phases, for the purposes of this FS
the phase-one plant will be constructed first to treat Beta, Rietfontein and CDM ore with phase-three being constructed at
a later stage before mining of Frankfort ore commences.
The plant will be developed by an Engineering, Procurement and Construction (EPC) contractor. The Company will run a
tender process to evaluate contracts for the construction and upgrade of existing infrastructure including detailed
engineering for the plant, procurement, fabrication and delivery to site of plant, equipment and materials and construction
of the process plant facilities.
Project Finance
Theta Gold has engaged with a debt funding advisor to assist in negotiations for the required Capex requirements of the
A$103 million peak capital. The Company is expected to complete negotiations with debt financing within 2022 calender
year.
Project Permits and Approvals
The Company announced in July 2022 11 that the final Environmental Impact Assessment Report and Environmental
Management Programme (EIA/EMPr) have been submitted to the Department of Mineral Resources and Energy (DMRE) and
the final technical documents for the integrated water use license (WUL) application to the Department of Water and
Sanitation (DWS) for final decision.
The outcome of the decisions from the DMRE and DWS on the applications are expected in Q4 of 2022 with an additional
90-day review and objection period for the public. A positive decision from the competent authorities will enable the
Company to commence with its MR83 underground project.
Over 20 studies have been completed as part of the EIA process. The findings from the EIA/EMPr and specialist studies have
not identified any fatal flaw, unaddressed objection, or significantly high impact ratings. The requisite mitigation measures
are all imminently feasible and this should give all interested and affected parties the confidence that the impacts of our
proposed activities will not threaten the environment.
A comprehensive stakeholder engagement process was undertaken before the submission of the applications. A very
successful open day was held in Pilgrims Rest on 28 May 2022. Feedbacks from the open day was very positive and the
community is very excited about the job opportunities and economic upliftment that will be created by the project. With the
good turnout at the open day and various other stakeholder meetings it can be concluded that the procedural requirement
to consult during the EIA phase is satisfied.
11 Ref to ASX release dated 18 July 2022 titled “Permitting Update TGME Underground Gold Mine”
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
It has been advised that the Department of Forestry, Fisheries and the Environment (“DFFE”) is currently conducting
interdepartmental consultations on the Company’s request for Ministerial conditions for continued mining in certain
sections of Morgenzon Forest Nature Reserve (“FNR”) that was declared in October 2021.
The Company is confident that it can successfully implement its mining operations to better protect the strategic water
source and biodiversity area. It is of great concern to the local community and downstream farmers that environmental
degradation is accelerating in this catchment area. A positive response on the request to the Minister will therefore be
welcomed by stakeholders in the light of current challenges in the catchment, the manageable environmental impacts from
the proposed MR83 underground project, and the significant value offering of the proposed Ecological Compensation
Programme to support DFFE’s wider Environmental, Social and Governance (“ESG”) objectives in the region.
Gold Plant Front-End Engineering Design (Feed) Complete
Front-End Engineering Design (FEED) of the TGME gold plant has been completed, forming an important input towards the
finalisation of the definitive Feasibility Study (FS) of the TGME Project.
Theta Gold provides an update on the MR83 gold processing plant advising that it had appointed MET63, which specialises
in the design and construction of advanced modular processing plants, to undertake and complete the plant design, based
on a thorough metallurgical testwork program, and with multi-tier internal and independent oversight.
Key Features of the Gold Process Plant:
• The new gold processing plant is designed to have a milling capacity of 540,000 tons per annum. The plant design
consists of two individual processing streams, capable of processing free-milling and sulphide ore separately.
• The new gold processing plant is designed to fit into the current plant footprint which forms part of MR83, therefore
no additional environmental permitting will be required.
• The new processing plant components include three-stage crushing, milling, reagent, flotation, CIL, elution, and gold
room sections as indicated in Figure 7 & 8.
• The gold plant will produce dore gold bars.
• Engineering and costing have been completed to the required level of accuracy for the FS.
• The completed design includes water and power reticulation with the scope to increase the capacity with modular
units for future plant expansions, consistent with the Company’s strategy to reach its gold production target of
160,000 ounces per annum within five years.
• The latest proven available automation technologies were incorporated into the gold processing plant design which
will reduce labour requirements and enhance productivity levels.
• The tailings disposal will be moved onto the existing tailings storage facility located some 150 metres from the plant.
•
• A 3D rendering of the processing plant is illustrated in Figure 7.
Some existing plant infrastructures were incorporated into the new gold processing plant.
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Figure 7: 3D Plant Rendering Final design Phase 1-3.
Theta Gold Mines Limited
Figure 8: New TGME Plant Layout
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Figure 9: Existing Plant Drone View (post demolition of old sections)
Theta Gold Mines Limited
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG)
Theta Gold Mines Limited
Environmental And Licensing
The Company continues to keep all its Mining Rights in good standing by ensuring that the various licence conditions continue
to be met.
The Company continues to do the various environmental monitoring and reporting required for its various mining rights. The
Company also receives regular visits from the various government departments to ensure that what is being reported is
observed in the field. Over the years the Company has built up a good rapport with the various regulatory departments and
the relationships are functional and conducive.
The Company’s mineral, employment and empowerment regulation reporting remain up to date.
Community Relations
The Company’s host communities are supportive of mining in general, and the associated employment and flow-on economic
benefits specifically that are likely to flow to local and regional businesses and the general uplifting of the area. Similarly,
Theta Gold is committed to community upliftment and regional growth through effective partnerships with all local
stakeholders in the regions where it has mining operations.
In connection with the Company’s recent stakeholders engagement in the environmental authorisation amendment process
for MR83, over 5,000 local residents signed a petition in support of Theta Gold re-establishing mining operation (open pit
and underground) in the region.
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
As part of the Company’s commitment to its Corporate Social Responsibility, the Company currently runs the following
projects for the benefit of the local community:
1.
Employment of teachers at the primary and high schools in Pilgrim’s Rest
2. Provision of water to the local community
3. Heating and cooking fuel provision to the local community
4.
5.
School Feeding Scheme
Small, Medium and Micro-sized Enterprises (SMMEs) development
It is a priority of the Company to effectively engage with the community and manage expectations and relations with respect
to all activities the Company is, or will be, engaged in including construction, development, transport, potential
environmental impacts (noise, dust etc) and other factors associated with mining operations.
Figure 10: TGME Staff member receiving Covid-19 injections at site
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
EXPLORATION & RESOURCES
Exploration and Resource upgrades
• New 419,000 oz @ 5.49 g/t Gold Maiden Underground Mining Reserve declared
• Total 580,000 oz @ 3.98 g/t Global Mining Reserve (Open Pit & Underground combined)
• 63 % Conversion factor for Maiden Underground Mining Reserve (from Inferred Resources)
• 3.5 Moz of Underground Resource (Inferred) remaining for future conversion into Mining Ore Reserve
• Global Mineral Resource of 6.1 Moz Au includes:
o 4.5 Moz Underground (26.3 Mt @ 5.4 g/t Au) (Measured, Indicated, and Inferred)
§ 969,400 oz (4.87 Mt @ 6.20 g/t Au) (Measured & Indicated)
o 1.3 Moz Open pit resources (13.02 Mt @3.25 g/t Au) (Indicated & Inferred )
§ 917 Koz (9.6 Mt @ 2.99g/t Au) (Indicated & Inferred; 0-130m depth)
§ 161 Koz (2.16 Mt @ 2.31 g/t Au at a 0.4 g/t Au cut-off) Probable Ore Reserve
o Tailings & Rock dumps – 174, 000 oz (Indicated & Inferred)
(see Tables 4, 5, 6, 7, 8 & 9)
An Ore Reserve and Mineral Resource Statement is set out on pages 25, 26 and 27.
Table 4: TGM Underground Projects Mineral Resources as at 1 February 2021
Mineral
Resource
Classification
Measured
Total Measured
Indicated
Mine
Reef
Frankfort
Bevetts
Frankfort
CDM
Beta
Rietfontein
Bevetts
Rho
Beta
Rietfontein
Total Indicated
Total Measured & Indicated
Mineral
Resource
Classification
Inferred
Total Inferred
Notes:-
Mine
Reef
Frankfort
CDM
Beta
Rietfontein
Bevetts
Rho
Beta
Rietfontein
Reef
Grade
g/t
Stope
Grade
g/t
7.13
7.13
7.86
13.19
21.66
14.57
16.35
16.00
5.37
5.37
5.13
3.80
6.58
8.20
6.24
6.22
Reef
Grade
g/t
Stope
Grade
g/t
Reef
Width
cm
73
73
58
23
23
52
37
38
Reef
Width
cm
Stope
width
cm
103
103
96
90
90
92
91
91
Stope
width
cm
7.41
10.06
16.51
14.06
13.51
4.27
3.02
5.43
8.52
5.56
48
24
25
57
39
93
90
90
94
91
Content
cm.g/t
Reef
Tonnes
Mt
520
520
452
307
499
755
597
606
0.069
0.069
0.243
0.258
0.716
0.517
1.734
1.803
Content
cm.g/t
Reef
Tonnes
Mt
356
244
414
803
532
0.343
0.544
1.107
1.190
3.184
Stope
Tonnes
Mt
0.091
0.091
0.373
0.895
2.357
0.919
4.543
4.634
Stope
Tonnes
Mt
0.596
1.811
3.367
1.962
7.736
Au Content
kg
489
489
1912
3401
15506
7534
28,352
28,841
koz
15.7
15.7
61.5
109.4
498.5
242.2
911.5
927.3
Au Content
kg
2543
5472
18285
16721
43,022
koz
81.8
175.9
587.9
537.6
1383.2
Fault losses of 5% for Measured and Indicated, 10% for Inferred Mineral Resources.
1. Mineral Resource cut-off of 160 cm.g/t applied.
2.
3. Gold price used for the cut-off calculations is USD1,500/oz.
4.
5. Mineral Resources are stated as inclusive of Ore Reserves.
6. Mineral Resources are reported as total Mineral Resources and are not attributed.
7. Discrepancy in summation may occur due to rounding.
cm.g/t and g/t figures will not back calculate due to variable densities in reef and waste rock.
2022 Annual Report
19
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Ore Reserves
The total Ore Reserve estimate for the combined LOM plan, only targeting Measured and Indicated Resources in the
LOM schedule, is detailed in Table 5 below.
Table 5: Ore Reserve Estimate for TGM Mines (Ore Reserve Plan)
Ore Reserve Category
Tonnes
kt
Grade
g/t
Au Content
kg
koz
Beta
Proved
Probable
Rietfontein
Proved
Probable
Frankfort
Proved
Probable
CDM
Proved
Probable
Combined
Proved
Probable
Total
Notes:
-
1,634
-
509
58
258
-
395
58
2,796
2,853
-
6.86
-
7.76
4.26
4.08
-
2.30
4.26
6.12
6.09
-
11,206
-
3,954
245
1,053
-
908
245
17,121
17,366
-
360
-
127
8
34
-
29
8
550
558
An Ore Reserve cut-off of 170 cm.g/t has been applied for the Beta Mine.
An Ore Reserve cut-off of 150 cm.g/t has been applied for the Frankfort Mine.
An Ore Reserve cut-off of 121 cm.g/t has been applied for the CDM Mine.
An Ore Reserve cut-off of 160 cm.g/t has been applied for the Rietfontein Mine.
A gold price of USD1,465/oz and exchange rate of ZAR/USD 16.00 was used for the cut-off calculation.
1.
2.
3.
4.
5.
6. Discrepancy in summation may occur due to rounding.
Exploration Potential
Approximately 3.5 Moz of the underground mineral resource sits in the inferred category. Beta Mine is a great example of
what the future holds. Beta’s current Mine Reserve is 1.634 million tons at 6.86 g/t gold for a total mine reserve of 360 Koz.
Note an inferred resource under JORC cannot be converted into mine reserve.
As underground development ramps up exploration stopes and underground drilling can upgrade the 587,000oz of inferred
resource that sits adjacent to the existing mine reserve, to measured and indicated under JORC Code, and allowing it to be
converted into mine reserve and add to the mine schedule, hence further increasing the LOM.
2022 Annual Report
20
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Mine Design
Mined Out Areas
Indicated Mineral Resources
Inferred Mineral Resources
Exploration Areas
Figure 11 – Beta Mine plan and Resource potential 587,000 oz Inferred Mineral Resource (Not included in
New Mine Design Blue area)
2022 Annual Report
21
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Life of Mine Plan (LOM)
Combined Plant Feed (Base Case)
The combined plant feed tonnes for the Base Case are illustrated in Figure 12. The feed is based on the LOM plan
targeted Mineral Resources, inclusive of Inferred Mineral Resources. The total LOM for the plant feed is 11.33 years,
shorter than the mining LOM plan due to stockpiling the initial on-reef development at Beta.
Figure 12: Combined Plant Feed Tonnes from Underground Operations –Base Case
FINANCIALS
Results
The Consolidated Entity made a loss after tax of US$7,636,000 (2021: US$4,365,000). Contributing to the loss was indirect
exploration costs written-off of US$1,171,000, finance costs of US$2,120,000, including interest paid on secured bond and
corporate and administration costs carried by the Consolidated Entity in support of its exploration and pre-development
activities of US$2,528,000.
Further exploration expenditure was incurred on permitting and pre-development activities associated with the Theta
Project. This further contributed to the total capitalized expenditure of US$16,193,000 recognised on the balance sheet as
at 30 June 2022.
Cashflow
Funding for the Company’s business activities were sourced from a combination of debt and equity markets in the 2022 year.
During the year, the company raised a total of US$4,250,000 (A$5,870,000) from equity issues and a further US$4,200,000
(A$6,000,000) via a secured bond with 2Invest AG. The funds were applied towards pre-development and permitting
activities for the Theta Project and general exploration, acquisition of the used ball mill, debt repayment and general
administration and corporate costs.
2022 Annual Report
22
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
The Consolidated Entity continues to proactively manage its cash flow requirements to ensure that funds are available,
including from capital raisings, as and when required to meet its debts and commitments as they fall due.
Subsequent to balance date, the Company raised in excess of A$2.3 million (before costs) through an equity issue.
CORPORATE
Changes to Corporate Executive and Management Team
During the financial year the Company made several changes at both the board and senior management levels in preparation
for operational readiness of the TGME Underground Gold Mine Project. This included the appointment of Mr Byron
Dumpleton to the Theta Gold board as Non-Executive Director. Mr Dumpleton has over 30 years mining experience in
Australia and Asia as well as 7 years as Chief Geologist for Red 5 Limited (ASX:RED). Mr Bill Guy who has been on the board
of Theta Gold since 2018 moved to become Executive Chairman, committed to support the Company as it transitions from
a gold explorer towards producer status.
Investment in Bullion Asset Management
In January 2021, the Company made an TGM-scrip based equity investment in Bullion Asset Management Services Pte Ltd
(“BAM”), a Singapore-based technology company focused on financing, tokenization of physical gold bullion and precious
metals trading.
BAM is a Singapore registered company co-founded by Decentralised Capital Pte Ltd, a related entity of Aura Group, and
backed by Jaggards Trading Pty Ltd, Australia’s oldest bullion and rare coin merchant, and DigitalX Ltd (ASX: DCC), an ASX
listed technology and digital asset management company.
The investment in BAM comprised an initial subscription of A$700,000 worth of BAM shares which was settled on 29 January
2021 by the issue of 2,087,682 Theta Gold shares at $0.335 per share. The Company wishes to retain its investment in BAM
and continue to work with the group in alternative gold financing and project joint venture initiatives.
Option to Extend Secured Bond Facility for a further 12 months
On the 13 May 202212, the Company announced it has entered into an agreement to extend the maturity date for the
outstanding A$6 million Secured Bond Facility (Secured Bond) it currently holds with 2Invest AG and its associates for a
further 12 months, if required.
The maturity date and repayment of the A$6 million Secured Bond is currently 23 January 2023 which may be extended for
a further 12 months to 23 January 2024, at the discretion of the Board.
As part of the agreement, the Company issued 15 million unlisted Series C Options to 2Invest AG with an exercise price of
$0.17 and expiry date on or before the 16 January 2024.
TGM Off-Market Takeover Offer Completion
Completion of the Focus Minerals Limited (FML) off-market takeover offer on 2 March 2022, resulting in the Company
receiving a total of 4,977,984 FML acceptances and gained approximately 417 new shareholders on the TGM registry. As a
result, TGM has issued 12,445,00213 new TGM shares as consideration under the 5-for-2 scrip for scrip takeover offer
representing approximately 2.83% of fully-paid FML shares on issue at the time.
12 Refer to ASX Release dated, 13 May 2022 titled “Option to Extend Bond Facility Maturity Date and Issue of New Call Options”
13 Refer to ASX Releases dated 4 and 11 March 2022 titled “Applications for Quotations of Securities”
2022 Annual Report
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
OUTLOOK
The Company focused on organic growth strategy for the TGME gold mines. Developing the first four (4) underground mines,
then adding new operations as funding and permitting allows. Theta’s great strength is its optionality with 43 historical mines
under management. Six (6) mines over the coming years will be evaluated for development targeting the 160,000 ounces
per annum production profile as each new mine brought online adds to the production profile.
The Company has increased operational capacity with its highly experienced mining team in South Africa. The team is tasked
with delivering the project on the ground. Efforts this year have been positive with the completion of the definitive FS and
successful permitting licences granted along with resource upgrades and strong project economics from the TGME
Underground Project, demonstrating that underground mines in the East Transvaal Goldfield can be mined effectively in
today’s modern environment.
Following the completion of the FS in July 2022 and a successful trial mining programme at the Frankfort mine, the Company
will be taking steps towards pre-development and construction works, subject to securing the necessary funding. The
Company expects to produce first gold in Q2, 2024 and is expected to produce over 100,000 ounces per annum by the third
year of production. Development and permitting work programs will be ongoing as each mine is evaluated.
2022 Annual Report
24
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
ORE RESERVE AND MINERAL RESOURCE STATEMENT
Table 6: Combined Underground and Open Pit Ore Reserves as at 1 February 2021
Operation
Grade
g/t
Tonnes
kt
Au Content
kg
koz
Beta
Frankfort
CDM
Open Pit (MR83)
Total
6.51
4.13
2.31
2.74
3.92
1,662
319
385
2,164
4,530
10,822
1,317
889
4,996
18,024
347.94
42.33
28.58
160.61
579.46
Notes:
The information pertaining to the Ore Reserve estimation is detailed in the notes of the Ore Reserve tabulation for the individual operations.
Table 7: Combined Mineral Resource as at 1 February 2021
1.
Resource
Classification
Type of Operation
Underground
Open pit
Tailings
Underground
Open Pit
Tailings
Underground
Open pit
Tailings
Rock Dump
Measured
Total Measured
Indicated
Total Indicated
Inferred
Total Inferred
Grand Total
Combined Mineral Resource
Tonnage
Gold Grade
Gold Content
Mt
g/t
Kg
koz
0.091
5.37
489
15.7
0.091
4.774
8.109
5.244
18.127
21.452
4.907
0.023
0.885
27.267
45.486
5.37
6.21
2.14
0.83
3.03
5.22
5.11
0.57
1.20
3.025
4.42
489
29 661
17 364
4 373
51 398
111 880
25 057
13
1 059
138 009
189 896
15.7
953.7
558.2
140.6
1652.5
3597.0
805.6
0.4
34.0
4 437.0
6 105.2
Notes:
1.
Columns may not add up due to rounding.
2. Gold price used for the cut-off calculations is USD1,500/oz.
3. UG Mineral Resources are reported at a cut-off of 160 cm.g/t, open pit at 0.5 g/t and 0.35 g/t, tailings and rock dumps at 0.35 g/t.
Fault losses of 5% for Measured and Indicated, 10% for Inferred Mineral Resources.
4.
5. Mineral Resources are stated as inclusive of Ore Reserves.
6. Mineral Resources are reported as total Mineral Resources and are not attributed.
Table 8: Beta Underground Ore Reserve as at 1 February 2021
Ore Reserve Category
Probable
Total
Grade
g/t
Tonnes
kt
6.51
6.51
1,662
1,662
Au Content
kg
10,822
10,822
koz
347.94
347.94
Notes:
7.
8.
An Ore Reserve cut-off of 170 cm.g/t has been applied.
A gold price of USD 1,465 / oz and exchange rate of 16 ZAR / USD was used for the cut-off calculation.
9. Ore Reserves are reported as total Mineral Reserves and are not attributed.
Table 9: Frankfort Underground Ore Reserve as at 1 February 2021
Ore Reserve Category
Grade
g/t
Tonnes
kt
Proved
Probable
Total
4.24
4.11
4.17
Au Content
kg
koz
254
1,063
1,317
8.16
34.16
42.32
60
259
319
Notes:
1.
An Ore Reserve cut-off of 150 cm.g/t has been applied.
2.
A gold price of USD 1,465 / oz and exchange rate of 16 ZAR / USD was used for the cut-off calculation.
3. Ore Reserves are reported as total Ore Reserves and are not attributed.
2022 Annual Report
25
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Table 10: CDM Underground Ore Reserve as at 1 February 2021
Ore Reserve Category
Probable
Total
Grade
g/t
Tonnes
kt
2.31
2.31
385
385
Au Content
kg
889
889
koz
28.58
28.58
Notes:
1.
An Ore Reserve cut-off of 121 cm.g/t has been applied.
2.
A gold price of USD 1,465 / oz and exchange rate of 16 ZAR / USD was used for the cut-off calculation.
3. Ore Reserves are reported as total Ore Reserves and are not attributed.
Table 11: Ore Reserves for the Open pit Operations as at 1 February 2021
Ore Reserve Category in
LoM Plan
Probable
Probable
Probable
Total
Pit
Browns Hill
Iota
Theta Hill
Grade
g/t
Reef Tonnes
kt
Au Content
kg
koz
2.61
2.43
1.62
2.221
279
1,490
395
2,164
728
3,628
640
4,996
23
117
21
161
Notes:
1.
An Ore Reserve cut – off of 0.4 g/t was applied.
A gold price of USD 1,300 / oz was used for the cut – off calculation.
2.
3. Ore Reserves are reported as total Ore Reserves and are not attributed.
Table 12: Total Theta Project – Mineral Resources, 1 February 2021
Resource
Classification
Open Pit Mine
Reef
Reef
Grade
Reef
Width
Content
Reef
Tonnes
Au Content
Theta & Browns Hill Shale
Theta & Browns Hill Bevett’s
Theta & Browns Hill Upper Theta
Theta & Browns Hill Lower Theta
Indicated
Theta & Browns Hill Beta
Columbia Hill
Columbia Hill
Columbia Hill
Columbia Hill
Bevett’s
Upper Rho
Lower Rho
Upper Theta
Total Indicated
g/t
1.02
1.08
2.41
3.79
2.51
2.98
2.33
2.51
1.06
2.29
Cm
200
223
100
100
100
114
402
520
114
258
cmgt
204
Mt
0.397
Kg
404
koz
13.0
0.856
925
29.7
0.651
1 571
50.5
0.839
3 178
102.2
0.373
938
0.108
323
0.897
2 090
1306
0.981
2 464
121
591
0.163
173
5.6
5.265
12 066
387.9
Resource
Classification
Open Pit Mine
Reef
Reef
Grade
Reef
Width
Content
Reef
Tonnes
Au Content
Theta & Browns Hill Shale
Theta & Browns Hill Bevett’s
Theta & Browns Hill Upper Theta
Theta & Browns Hill Lower Theta
Theta & Browns Hill Beta
Columbia Hill
Upper Rho
Inferred
Total Inferred
2022 Annual Report
Cm
215
217
100
100
100
134
129
g/t
1.12
1.17
1.86
8.06
2.17
5.12
3.84
26
cmgt
240
Mt
0.600
Kg
668
0.451
528
0.948
1 762
1.384
11 153
358.6
0.778
1 686
0.131
673
54.2
21.6
4.292
16 470
529.5
2 6
241
241
379
251
340
937
254
186
806
217
687
497
30.1
10.4
67.2
79.2
koz
21.5
17.0
56.6
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Resource
Classification
Open Pit Mine
Reef
Indicated
Total Theta Project All
Inferred
Total Theta Project All
Total Indicated and Inferred
Reef
Grade
Reef
Width
Content
Reef
Tonnes
Au Content
g/t
2.29
3.84
2.99
cm
258
129
200
cmgt
591
497
598
Mt
5.3
4.3
9.6
Kg
12 066
koz
387.9
16 470
529.5
28 535
917.4
Notes:
1. Theta Project (Theta Hill, Browns Hill and Iota) cut-off is 0.35 g/t;
2. The gold price used for the cut-off calculations is USD 1,500 / oz;
3. Geological losses applied are 10% for inferred and 5% for Indicated and Measured;
4. Theta Hill and Browns Hill – Upper Theta Reef, Lower Theta Reef and Beta Reef are diluted grades over 100cm;
5. Historical mine voids have been depleted from the Mineral Resource;
6. The inferred Mineral Resources have a high degree of uncertainty and it should not be assumed that all or a portion
thereof will be converted to Ore Reserves;
7. Mineral Resources fall within the mining right 83MR and 341MR.
DISCLAIMERS
Competent Persons Statement
MINERAL RESOURCES
Mr. Uwe Engelmann confirms that he is the Competent Person for the TGM Mineral Resources as reported on TGM’s
Mineral Resources which is extracted from TGM’s ASX announcement dated 8 April 2021 (Initial Maiden
Underground Mining Reserve) and 25 October 2021 (TGME Project Permitting Update) available to view at
www.asx.com.au and was prepared in accordance with the guidelines of the 2012 Edition of the Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2012). Mr. Engelmann has
read and understood the requirements of the JORC Code (2012).
Mr. Engelmann is a Competent Person as defined by the JORC Code, 2012, having more than five years’ experience
that is relevant to the style of mineralisation and type of deposit described in this report and to the activity for which
he is accepting responsibility. Mr. Engelmann (BSc (Zoo. & Bot.), BSc Hons (Geol.), Pr.Sci.Nat. No. 400058/08,
MGSSA), is a director of Minxcon (Pty) Ltd and a member of the South African Council for Natural Scientific
Professions. Mr. Engelmann is a full-time employee of Minxcon (Pty) Ltd and has reviewed this report and consents
to the inclusion of the matters based on his supporting information in the form and context in which it appears.
The information in this announcement that relates to TGM’s Mineral Resources is extracted from TGM’s ASX
announcement dated 8 April 2021 (Initial Maiden Underground Mining Reserve) and 25 October 2021 (TGME Project
Permitting Update) available to view at www.asx.com.au, and was prepared in accordance with the guidelines of the
JORC Code (2012). TGM confirms that it is not aware of any new information or data that materially affects the
information included in the original market announcement and that all material assumptions and technical
parameters underpinning the Mineral Resources estimates in the relevant market announcement continue to apply
and have not materially changed. TGM confirms that the form and content in which the Competent Person’s findings
are presented have not been materially modified from the original market announcement.
ORE RESERVES
The information in this report relating to Ore Reserves is based on, and fairly reflects, the information and supporting
documentation compiled by Mr. Daniel van Heerden (B.Eng (Mining M.Com (Business Management), member of
Engineering Council of South Africa (Pr.Eng. Reg. No. 20050318)), a director of Minxcon Pty Ltd and a fellow of the
South African Institute of Mining and Metallurgy (FSAIMM Reg. No. 37309).
Mr van Heerden has sufficient experience that is relevant to the style of mineralisation under consideration and to
the activity being undertaken to qualify as a Competent Person as defined in the JORC Code (2012). Mr van Heerden
consents to the inclusion in the report of the matters based on his information in the form and context in which it
appears.
2022 Annual Report
27
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
The information in this announcement that relates to TGM’s Ore Reserves is extracted from TGM’s ASX
announcement dated 8 April 2021 (Initial Maiden Underground Mining Reserve) and 25 October 2021 (TGME Project
Permitting Update) available to view at www.asx.com.au, and was prepared in accordance with the guidelines of the
JORC Code (2012). TGM confirms that it is not aware of any new information or data that materially affects the
information included in the original market announcement and that all material assumptions and technical
parameters underpinning the Ore Reserve estimates in the relevant market announcement continue to apply and
have not materially changed. TGM confirms that the form and content in which the Competent Person’s findings are
presented have not been materially modified from the original market announcement.
FORWARD LOOKING STATEMENT
This report has been prepared by and issued by Theta Gold Mines Limited to assist in informing interested parties about
the Company and should not be considered as an offer or invitation to subscribe for or purchase any securities in the
Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to
subscribe for securities in the Company will be entered into on the basis of this report.
This report may contain forward looking statements. Whilst Theta Gold has no reason to believe that any such
statements and projections are either false, misleading or incorrect, it does not warrant or guarantee such statements.
Nothing contained in this announcement constitutes investment, legal, tax or other advice. This overview of Theta Gold
does not purport to be all inclusive or to contain all information which its recipients may require in order to make an
informed assessment of the Company’s prospects. Before making an investment decision, you should consult your
professional adviser, and perform your own analysis prior to making any investment decision. To the maximum extent
permitted by law, the Company makes no representation and gives no assurance, guarantee or warranty, express or
implied, as to, and take no responsibility and assume no liability for, the authenticity, validity, accuracy, suitability or
completeness of, or any errors in or omissions, from any information, statement or opinion contained in this
announcement. This report contains information, ideas and analysis which are proprietary to Theta Gold.
2022 Annual Report
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
MINING RIGHTS AND APPLICATIONS FOR MINING RIGHTS
Theta Gold Mines Limited
Table 13: List of current Mining Rights (MR) and Applications for Mining Rights
MR No
Description
Farms
Effective
Date
Expiry Date
Remarks
NORTHERN TENEMENTS (MR83, MR330, MR340, MR341, MR10167)
MR 83
Greater
TGME
MR 330
Beta Re-
Development
& Grootfontein
Cluster
MR 340
Hermansburg
Portions 1, 2, 3, 4, 5 and the
Remaining Extent of Frankfort
509KT, Krugers Hoop 527 KT,
Portions 1, 2 and the Remaining
Extent of Morgenzon 525 KT, Peach
Tree 544 KT, 18, 42, 43, 44 and
Remaining Extent of Ponieskrans
543 KT and Portion 1 and the
Remaining Extent of Van der
Merwes Reef 526 KT
Portions 1, 2, 3 and the Remaining
Extent of Grootfonteinberg 561 KT
and Remaining Extent of
Grootfontein 562 KT
Portion of the Remaining Extent of
Hermansburg 495 KT
16-Oct-13
15-Oct-23
Amendment
application to
include open cut
mining in
process
Refer Note 1
Refer Note 1
Granted
10-Jul-13
09-Jun-23
Granted
MR 341
PTD’s
Portions 1 and 2 and a Portion of
the Remainder Extent of
Grootfontein 562KT
25-Sep-19
16-Feb-22
Granted
MR 10167
TGME
Desire 563KT, RE and Ptn 1, 2, 3,
12, 14, 15, 17, 18, 19, 20, 22 and 23
of Doornhoek 545KT, RE and Ptn 1,
2 and 3 Rotunda Greek 510KT,
Vaalhoek 474KT, Buffelsfontein
452KT, RE and Ptn 1 of
Willemsoord 476KT, Sacramento
492KT, Granite Hill 477KT, Blackhill
528KT, Manx 475KT, Klondyke
493KT, Hermansburg 495KT
Refer Note 1
Refer Note 1
SOUTHERN TENEMENTS (MR198, MR358, MR433, MR10161)
MR198
Elandsdrift
Heap Leach
Portions 1 and 2 of Elandsdrift 220
JT
18-Mar-08
17-Mar-09
MR 358
Rietfontein
Portion of the Remaining Extent and
Portion 2 and 3 of the farm Spitskop
195 JT, Portion of Portion 16 of
Waterval 168 JT and Portion of the
Remaining Extent of Maliveld Vallei
192 JT
05-Jun-13
04-Jun-28
Consolidation of
Prospecting
Rights
10255PR,
10404PR,
10254PR
Granted
Renewal
submitted
Amendment
application
pending to
incorporate
portions of
Portions 1, 4
and 6 of the
farm Rietfontein
193 JT
MR 433
Glynn’s
Lydenburg
Portion 5 of Grootfontein 196 JT and
Remaining Extent of
Olifantsgeraamte 198 JT
12-Nov-13
11-Nov-23
Granted
MR 10161
Sabie
Spitzkop 195JT, Ptns of the RE and
Ptn 1 of Hendriksdal 216JT,
Grootfontein 196JT, Waterval
168JT, Sheba 219JT, Vertroosting
218JT, Olifants Geraamte 198JT,
Rietfontein 193JT
Refer Note 1
Refer Note 1
Consolidation of
Prospecting
Rights
10005PR,
660PR,
10252PR
Granted
Note 1:
The period of grant of the mining right will be determined upon execution thereof. In the South African context, mining rights may be granted
for up to 30 years and are renewable thereafter.
2022 Annual Report
29
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Figure 13: Tenement map
2022 Annual Report
30
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Corporate Governance Statement
The Board of Directors support good corporate governance practices. Unless disclosed otherwise, the best
practice recommendations of the ASX Corporate Governance Council have been applied for the financial year
ended 30 June 2022.
This Corporate Governance Statement was approved by the Board on 30 September 2022.
The Board has adopted a Corporate Governance Charter which encompasses a Board Charter, Code of
Conduct, Continuous Disclosure Policy and Diversity Policy. Separately, the Board has also adopted a
Securities Trading Policy, Audit and Risk Management Committee Charter and a Nomination and
Remuneration Committee Charter. The Company’s constitution, the Charters and the Securities Trading Policy
are available on the Company’s website (www.thetagoldmines.com).
References to Company in this statement shall, where applicable, include the Consolidated Entity.
Principle 1: Lay solid foundations for management and oversight
The roles of the Board and the Managing Director are separate.
The Board is responsible for the following:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
ensuring compliance with the Corporations Act, ASX Listing Rules and all other relevant laws;
appointment of appropriate staff, consultants and experts to assist in the Company’s operations,
including the selection and monitoring of a chief executive officer;
approving annual budgets and monitoring financial and other reporting;
monitoring and ensuring appropriate accountability for directors’ and senior managers’ remuneration;
oversight of the Company including its framework of control and accountability systems to enable risk
to be assessed and managed;
input into and final approval of management’s development of corporate strategy and performance
objectives;
(vii) monitoring management’s performance and implementation of strategy and ensuring appropriate
resources are available;
(viii)
approving and monitoring the progress of major capital expenditure, capital management and
acquisitions and divestitures.
The Managing Director is responsible for conducting the affairs of the Company under delegated authority from
the Board and implementing the policies and strategies set by the Board. In carrying out his responsibilities, the
Managing Director must report to the Board in a timely manner and ensure all reports to the Board present a true
and fair view of the Company’s financial position and operating results.
There has been Board renewal in the last three financial years, with one director retiring and two new directors
appointed to the Board. During the year, the Managing Director stepped down from executive duties and
resigned from the Board in August 2021. Whilst no formal performance review was undertaken on senior
executives, the executives receive informal feedbacks on their performance from time to time. No performance
evaluations have been conducted on, or by, the directors during the reporting period.
The Company Secretary is directly accountable to the Board on all Board matters. He also acts as secretary of
all Board committees.
All directors and senior executive appointments are made in writing.
2022 Annual Report
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Diversity policy
Diversity is about the commitment to equality and treating all individuals with respect irrespective of religion, race,
ethnicity, language, gender, sexual orientation, disability, age or any other area of potential difference.
The Board recognizes that a diverse and inclusive workforce is not only good for our employees but also good
for our business. It helps the Company attract and retain talented people, create more innovative solutions, and
be more flexible and responsive. Across the Company, there is increasing momentum on diversity with a
particular focus on gender and age, as well as greater work and career flexibility.
As the Company grows, the Directors are also committed to increasing the representation of females at all levels
of the organisation including senior management and at Board level. However, measurable objectives for
achieving gender diversity have not been set given the stage of the Company’s development.
Principle 2: Structure the board to add value
The Board is comprised of the following directors, whom are mostly all Non-Executive Directors, save for Mr
Robert Thomson who resigned on 13 August 2021 as a Non-Executive Director and Mr Finn Behnken who
was a Non-Executive Director until 15 August 2022 and resigned as a Non-Executive Director. Mr Charles
Guy was made an Executive Chairman on 10 November 2021 having previously served on the board from
2018 as a Non-Executive Director. The skills, experience and expertise of each director in office at the date of
this report, their attendances at meetings and their term of office are detailed in the Directors’ Report.
Charles William Guy
Bill Richie Yang
Finn Stuart Behnken
Yang (Simon) Liu
Byron Dumpleton
Guyang (Brett) Tang
Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Not Independent
Independent
Independent
Independent
Independent
Not Independent
The Chairman of the Board is not an independent director. Mr. Charles William Guy is Executive Chairman
and is not considered independent while Mr Brett Tang is associated with a substantial shareholder of the
Company.
In assessing the independence of directors, the Company will generally regard an Independent Director as a
non-executive director (that is, not a member of management) who:
•
is not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a
substantial shareholder of the Company;
• within the last three years has not been employed in an executive capacity by the Company or
another group member, or been a director after ceasing to hold any such employment;
• within the last three years has not been a principal of a material professional advisor or a material
consultant to the Company or another group member, or an employee materially associated with the
service provider;
•
is not a material supplier or customer of the Company or other group member, or an officer of or
otherwise associated directly or indirectly with a material supplier or customer; and
• has no material contractual relationship with the Company or another group member other than as a
director of the Company.
Independent directors have the right to seek independent professional advice in the furtherance of their duties
as directors at the Company’s expense. Written approval must be obtained from the chair prior to incurring
any expense on behalf of the Company.
The Company does not conduct induction or professional development programs; however, directors are
encouraged to attend external programs and courses.
2022 Annual Report
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Nomination and Remuneration Committee
The members of the committee are –
• Bill Richie Yang (Chair)
• Charles William Guy
• Simon Liu
• Brett Tang
The Nomination and Remuneration Committee Charter sets out the process for nomination and election of
directors.
The attendance of each committee member at committee meetings is set out in the Directors’ Report.
Principle 3: Act ethically and responsibly
The Board acknowledges and emphasises the importance of all directors and employees maintaining the
highest standards of corporate governance practice and ethical conduct.
A code of conduct has been established requiring directors and employees to:
• Act honestly and in good faith,
• Exercise due care and diligence in fulfilling the functions of office,
• Avoid conflicts and make full disclosure of any possible conflict of interest,
• Comply with the law,
• Encourage the reporting and investigation of unlawful and unethical behaviour; and
• Comply with the share trading policy outlined in the Code of Conduct.
Directors are obliged to be independent in judgement and ensure all reasonable steps are taken to ensure due
care is taken by the Board in making sound decisions.
Principle 4: Safeguard integrity in corporate reporting
Audit Committee
The Company has an Audit and Risk Management Committee which operates under a charter that sets out its
role. The Committee’s primary function is to assist the Board in discharging its responsibility to exercise due
care, diligence and skill in relation to the Company, including appointment of external auditors, business risk
management, internal control systems, business policies and practices and monitoring corporate conduct and
business ethics.
Members of the Audit and Risk Management Committee, a majority independent directors, are –
Finn Stuart Behnken (Chair) – resigned 15 August 2022
Bill Richie Yang (Chair) – appointed 15 August 2022
Charles William Guy
The skills, experience and expertise of each committee member and their attendances at committee meetings
are set out in the Directors’ Report.
Financial reporting
The Chair (in the absence of a Managing Director role) together with the Chief Financial Officer, are required
to declare in writing to the Board each financial period that the financial records have been properly maintained
and that the financial statements and notes for the financial period give a true and fair view of the financial
position and performance of the Consolidated Entity and comply with relevant accounting standards and that
2022 Annual Report
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
the declaration, provided in accordance with section 295A of the Corporations Act, is founded on a sound
system of risk management and internal control and that the system is operating effectively in all material
respects in relation to financial reporting risks.
The Company’s external auditor attends each annual general meeting and is available to answer questions
pertaining to the audit of the Company’s financial statements.
Principle 5: Make timely and balanced disclosures
The Company’s Corporate Governance Charter incorporates the Company’s continuous disclosure policy which
sets out the Company’s processes in dealing with price-sensitive information to ensure that it complies with its
continuous disclosure obligations, the market is kept fully informed and no director, employee or third-party
deals in the Company’s securities while in possession of inside information.
The system for releasing information to the ASX is as follows:
(a) When any member of the Reporting Group (being the Chairman, Managing Director or Company
Secretary) becomes aware of information which he or she believes may need to be disclosed, he or she
immediately contacts and gives full details to each of the other members of the Reporting Group.
(b) The Reporting Group will take the following steps in relation to information received by them:
consult legal and other advisers (including the ASX) as necessary,
• assess whether disclosure is required,
•
• prepare an announcement for release to the ASX, and
•
forward the release to the ASX.
In order to maintain control over disclosures, the following persons only will be authorised to speak on the
Company’s behalf to analysts, brokers and institutional investors, and to respond generally to shareholder
queries:
(a)
(b)
(c)
(d)
the Chairperson,
the Managing Director or CEO (if applicable),
the Company Secretary, and
any other person who has been given express prior authority by the Chairperson.
All announcements lodged with ASX are posted on the Company’s website after they have been released by
ASX with Board approval.
Principle 6: Respect the rights of security holders
The Company has a facility on its website for shareholders and interested parties to register for email alerts of
announcements posted on the website. Shareholders may also elect to receive notices of meetings by email.
Shareholders are entitled to vote on significant matters impacting on the business, which include the election
and remuneration of directors, changes to the constitution and receipt of annual financial statements.
Shareholders are strongly encouraged to attend and participate in the Annual General Meetings of the Company
and other shareholder meetings, to lodge questions to be responded by the Board, and if not able to attend the
meetings, are encouraged to appoint proxies.
Principle 7: Recognise and manage risks
The Board considers identification and management of key risks associated with the business as vital to
maximising shareholder wealth. As a gold exploration/development company operating in South Africa, the
Company faces material business risks (operational, financial, environmental and social sustainability), as well
as regulatory, political and reputational risks.
2022 Annual Report
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
The Audit and Risk Management Committee reviews and oversees the management of the risks. Details of the
Audit and Risk Committee are set out above.
The Company does not have an internal audit function.
Risk review is an ongoing function. Risks are generally managed by strategies adopted such as –
i)
ii)
iii)
iv)
v)
annual budgets
monthly/quarterly reports against budgets
financial authority limits
insurance programme
regular monitoring.
The Board monitors risks through –
a)
b)
c)
d)
monthly/periodic operations reports
monthly/quarterly financial reports against budgets
briefings by senior executives
tour of operations.
Principle 8: Remunerate fairly and responsibly
The Board has a Nomination and Remuneration Committee. Details of the Nomination and Remuneration
Committee are set out above.
The Company’s remuneration policy is set out in the Remuneration Report. The remuneration policy is designed
to ensure that it is appropriate and effective in attracting and retaining the best key management personnel
(“KMP”), as well as create goal congruence between KMPs and shareholders. To that end, remuneration is
structured to comprise a fixed cash salary component and superannuation, supplemented by incentive securities
(performance rights and/or options) linked to share price performance or operational performance hurdles.
The Board’s policy is to remunerate non-executive directors at market rates for time, commitment and
responsibilities. The Board determines payments to the non-executive directors at A$50,000 per annum for
each non-executive director. The maximum aggregate amount of fees that can be paid to non-executive
directors is subject to approval by shareholders in general meeting. This amount will not exceed $600,000 per
annum. Fees for non-executive directors are not linked to the performance of the Consolidated Entity. However,
to align directors’ interests with those of shareholders, all directors are encouraged to hold shares in the
Company and directors may be granted performance rights.
The Company has adopted an Employee Performance Rights and Option Plan (“Plan”). Grant of performance
rights and options under the Plan is at the discretion of the Board and is available to directors and employees
of the Company as well as those of its subsidiaries in South Africa.
The Company does not permit the hedging of incentive options and performance rights by directors and
employees.
2022 Annual Report
35
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Directors’ Report
Your Directors present their report, together with the financial statements of Theta Gold Mines Limited
(“Company”) and its controlled entities (“Consolidated Entity” or “Group”) for the financial year ended 30 June
2022.
Directors
The Directors of the Company during or since the end of the financial year are:
Charles William Guy
Executive Chairman (appointed 10 November 2021), Non-
Executive Director (previous role)
Robert Peter Thomson
Managing Director and Non-Executive Director (resigned as
Managing Director on the 5 August 2020 and resigned as Director
on the 13 August 2021)
Bill Richie Yang
Non-Executive Director
Finn Stuart Behnken
Non-Executive Director (resigned on
15 August 2022)
Byron Dumpleton
Non-Executive Director (appointed on
10 November 2021)
Yang (Simon) Liu
Non-Executive Director
Guyang (Brett) Tang
Non-Executive Director
Information on Directors
Charles William Guy
Executive Chairman
Period of Directorship:
Qualifications:
Experience:
Appointed 10 November 2021 (previously Non-executive Director
appointed 7 March 2018)
B. App. Sc.
Member, Australian Institute of Geoscientists
Bill Guy was appointed as a director of the company in March 2018 and
is a professional mining executive and geologist with over 30 years’
experience in exploration and resource development in Asia, Australia and
Europe. In previous executive and geology roles he was involved in all
aspects of the mining industry inclusive of project acquisitions, project
development (Cockatoo Island Fe), project discovery (Mt Ida Fe), and large
scale JV (Newcrest JV Au), in both the corporate and technical roles.
Interest in Shares and
Performance Rights:
Held directly
- 2,400,000 performance rights expiring 27 June 2024
Special Responsibilities:
Other Listed Company
Directorships in Last 3
Years:
2022 Annual Report
Held by Mineral Rock Pty Ltd
- 1,843,923 fully paid ordinary shares
Member of Nomination and Remuneration Committee
Member of Audit and Risk Management Committee
N/A
36
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Robert Peter Thomson
Managing Director and Non-Executive Director
Period of Directorship:
Qualifications:
Experience:
Appointed 25 November 2016, resigned 13 August 2021
BE (Mining) (University of Queensland)
MBA (University of Wollongong, NSW)
Fellow, Australasian Institute of Mining and Metallurgy
Mr. Thomson commenced his career in underground gold operations in
southern Africa and has since been involved in numerous successful gold
and base metal ventures which included transitioning companies from
exploration to production, and the establishment of sustainable operations.
Mr. Thomson was Managing Director of the Company from 25 November
2016 to 5 August 2020.
Interest in Shares and
Options:
Special Responsibilities:
Other Listed Company
Directorships in Last 3
Years:
Nil
Nil
Pacific Nickel Mining (appointed 3 September 2020)
Bill Richie Yang
Non-Executive Director
Period of Directorship:
Qualifications:
Experience:
Interest in Shares and
Performance Rights:
Special Responsibilities:
Other Listed Company
Directorships in Last 3
Years:
2022 Annual Report
Appointed 16 June 2015
BCom (Business Economics and Finance), University of New South Wales
Mr. Yang is a corporate financier and business executive, with more than
16 years in the mining resources sector focused on business development,
corporate strategies, M&A and financing.
Mr. Yang has held numerous executive directorships and management
roles in junior mining development companies, including Executive Director
of ASX-listed Bligh Resources Limited between 2015 and 2017. He is also
Managing Director of Sydney/Hong Kong based Vs Capital Group, a
corporate finance advisory firm and Family Office investor.
Held directly
- 3,000,000 performance rights expiring 27 June 2024
Held by Bill Richie Yang
- 572,692 fully paid ordinary shares
Held by Vs Capital Investments Pty Ltd
- 1,509,528 fully paid ordinary shares
Held by Vs Capital Investments Pty Ltd
-
528,948 fully paid ordinary shares
Member of Audit and Risk Management Committee
Member of Nomination and Remuneration Committee (Chair)
Nil
37
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Finn Stuart Behnken
Non-Executive Director
Period of Directorship:
Qualifications:
Appointed 19 December 2018, resigned 15 August 2022
B.Sc Eng (Mining)
Experience:
Mr Behnken is a mining engineer and has South African mining
management experience as the CEO of Tshipi é Ntle Manganese Mining
(Pty) Limited (during the construction and initial production phase of the
major Tshipi Borwa Manganese Mine). Prior to this, he was an investment
banker with South African based Nedbank and has served as non-executive
director of various mining companies including, most recently, as a director
of the then AIM listed Gemfields plc. Mr Behnken is currently the South
African representative of Auramet International, a United States domiciled
precious metals merchant and mine financier.
Interest in Shares and
Performance Rights:
Held directly
- 800,000 performance rights expiring 27 June 2024
Special Responsibilities:
Other Listed Company
Directorships in Last 3
Years:
Chairman of Audit and Risk Management Committee
Gemfields Plc
Byron Dumpleton
Non-Executive Director
Period of Directorship:
Qualifications:
Experience:
Appointed 10 November 2021
Bachelor of Applied Science in Geology, Graduated 1986
Member, Australian Institute of Geoscientists
Geologist with over thirty years’ experience in Australia, Philippines &
Indonesia:
Experience in structurally complex Archean Gold (16+yrs), Proterozoic
Copper and Gold, Oxide and Primary Copper (12+ yrs), Epithermal
Gold/Silver (LS and HS) and Cu-Au Porphyry’s, Archean and Ordovician
VMS Copper Deposits, Sb and Au Shear Deposits (5+ yrs), Pb-Zn/Ag
base metal deposits, Nickel Laterites (Australian, Indonesian, PNG) and
Tertiary Coal Deposits (Indonesia). Iron Ore - –ematite and Magnetite
Deposits (Mid West W.A. and Mauritania, West Africa).
Interest in Shares and
Options:
Special Responsibilities:
Other Listed Company
Directorships in Last 3
Years:
Nil
Nil
N/A
2022 Annual Report
38
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Yang (Simon) Liu
Non-Executive Director
Period of Directorship:
Qualifications:
Experience:
Interest in Shares and
Performance Rights:
Special Responsibilities:
Other Listed Company
Directorships in Last 3
Years:
Appointed 29 January 2013
Graduate, School of Journalism and Communication,
Renmin University, China
Mr. Liu has over 20 years’ experience in marketing and corporate
consulting. In 2010 he co-founded Beijing-based Hanhong Private Equity
Fund which managed over USD1.5 billion. The fund's’investments covered
entertainment, property development, oil/gas and gold mining projects.
Simon is currently a senior partner at Rose Rock Capital, a wholly-owned
Rockefeller family investment arm in Asia Pacific.
Held directly
- 3,444,998 fully paid ordinary shares
Held by Hanhong New Energy Holdings Ltd
- 4,527,105 fully paid ordinary shares
Member of Nomination and Remuneration Committee
Nil
Guyang (Brett) Tang
Non-Executive Director
Period of Directorship:
Qualifications:
Experience:
Appointed 3 July 2018
Bachelor of Law (University of Soochow)
MBA (University of Nanjing)
Mr Tang is a qualified lawyer in China and is also registered as a Fund
Manager with the Asset Management Association of China (AMAC).
He is a professional investor and fund manager, experienced in and been
successful in mining and mining investments. From 2007-2013, he was
Executive Director at Yunnan Gold Mountain Ltd, a joint venture gold/copper
mining company with a Chinese state-owned mining enterprise. Mr Tang
is a director at Tasman Funds Management Ltd and a director and founding
partner of China Nanjing Venture Capital Ltd, a VC Fund.
Held directly
- 594,339 fully paid ordinary shares
- 2,000,000 performance rights expiring 27 June 2024
Held by Tasman Funds Management Ltd
- 32,730,995 fully paid ordinary shares
Member of Nomination and Remuneration Committee
Nil
Interest in Shares and
Performance Rights:
Special Responsibilities:
Other Listed Company
Directorships in Last 3
Years:
2022 Annual Report
39
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Finance professional with twenty-plus years’ experience as CFO and
Company Secretary with multiple ASX Listed entities predominately in the
resources and energy sectors.
Strong commercial and corporate administrative professional with a
Bachelor of Commerce (B.Com.), Griffith University Brisbane, A Bachelor
of Laws (LLB), QUT Brisbane and qualifications from the Institute of
Chartered Accountants Australia and New Zealand.
Familiar with corporate law, listing rules, ASX disclosures, IPO experience,
M&A and large asset monetarisation transactions, hostile takeovers,
taxation and consolidating large, complex corporate entities for Australia,
Hong Kong, United States , New Zealand, Vietnam and the Pacific
Regions (PNG / SI).
A commercial solicitor with over twenty-five years ASX listed company
management and operational experience to Executive Director level.
Particular strength in company compliance, backdoor listings, exploration,
mining and agricultural asset due diligence/acquisitions, joint venture
structuring and management, project permitting and stakeholder
negotiations, equity and debt fund raisings.
Company Secretary
Brent Hofman
LLB, B. Com
(appointed 16 November
2021)
Heath Roberts
Grad. Dip. Legal Practice
(resigned 16 November
2021)
Principal Activities
The Consolidated Entity holds prospective gold assets in the Pilgrim’s Rest – Sabie goldfield, a historic South
African gold mining region. These assets include several surface and near-surface high-grade gold projects.
The principal activities during the year consisted of continuing exploration with particular focus on
optimising the feasibility study on the TGME Gold Project completed in the previous years covering both open-
pits and underground gold mines, in parallel with securing various permitting entitlements over the existing
mining rights.
Operating and Financial Review
The review of operations during the year is set out on pages 4 to 30.
Significant Changes in State of Affairs
The following significant changes in the state of affairs of the Consolidated Entity occurred during the financial
year:
(a) Issued capital increased US$5,010,000 arising primarily from the issue of securities to raise funds for the
group’s activities.
Dividends
No dividend was paid, recommended or declared but not paid since the start of the financial year.
2022 Annual Report
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Likely Developments and Expected Results
Theta Gold Mines Limited
Subject to receipt of permitting approval for open-cut mining and securing project finance, it is the
Company’s intention to develop the Theta Open-Cut Project as the group’s starter mining project. The
group will also be aiming to actively explore the surrounding Theta Project area to increase the project
mine life. Subject to funding, it would be the group’s plan to convert the large mineral resource into ore
reserves through further drilling and exploration.
Environmental Regulations
The Consolidated Entity’s operations are subject to environmental regulation under both South African and
Australian legislation. There have been no known breaches of these regulations by the Consolidated Entity.
Significant Events after Balance Date
Subsequent to balance date, the Company issued 35,384,615 fully-paid ordinary shares at an issue price of
A$0.065 per share, raising a total of A$2,300,000 (USD 1,600,000) before cost.
The Company also issued 20,000,000 unlisted call options to 2Invest AG who are substantial shareholders
in the Company in return for non-exclusive advisory services in connection with identifying potential
development funding investors for its TGME Underground Gold Mine Project. The options have an exercise
price of $0.12 and will expire on 31 December 2023.
In addition, the Company released its Definitive Feasibility Study on 27 July 2022 for the TGME Underground
Gold Mine Project. The Feasibility Study (‘FS’) presents a clear pathway to production via the re-
development of TGME’s gold assets within South Africa’s renowned gold mining regions, with a forecast total
Life of Mine (LOM) production of 1.24 Moz’s of contained gold. Economics of the project are extremely strong
delivering an NPV10% of A$432 million applying a gold price of A$2,189 /Oz and an AISC of A$1,112 / oz.
LOM is 12.9 years using a free-milling stand-alone processing plant that will produce dore gold bars on site
from between 80 to 100koz p.a at 5.18 g/t and a gold recovery rate of 87.1%.
On 6 September 2022 the Company announced it has received approvals for two project-critical regulatory
licences for the development of its TGME Underground Gold Mine.
1. Atmospheric Emissions Licence issued for the operations of the processing plant, and
2. State Forest Licence issued for Frankfort Mine.
The successful approvals are the by-project of an extensive period of engagement with domestic regulators,
which required the Company to satisfy a broad range of criteria to meet the standards set out by government
departments at the federal level.
Debt Advisors
The Company announced in July 2022 following the successful release of its DFS that it had engaged debt
advisors to complete a TGME Project Information Memorandum and banking model to discuss with potential
debt funding transactions with numerous project financiers and institutions for the peak capital requirements
of the project of A$103 million. The Company expects non-binding initial offers and term-sheets in the coming
months and will update the market with results of that process
2022 Annual Report
41
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Meetings of Directors
Theta Gold Mines Limited
Attendances at Board and Committee meetings by directors during the year were as follows:
Board meetings
Charles William Guy
Robert Peter Thomson
Bill Richie Yang
Simon Liu
Brett Tang
Finn Stuart Behnken
Bryon Dumpleton
Audit and Risk Committee meetings
Finn Stuart Behnken
Charles William Guy
Bill Richie Yang
Nomination and Remuneration Committee meeting
Bill Richie Yang
Charles William Guy
Simon Liu
Brett Tang
Performance Rights
Performance rights issued during the year
Eligible to attend
10
Attended
10
1
10
10
10
10
8
1
10
8
8
10
4
Eligible to attend
2
2
2
Attended
2
2
2
Eligible to attend
1
Attended
1
1
1
1
1
1
1
Nil performance rights were issued during the year ended 30 June 2022. In 2021, 400,000 performance
rights expiring on 31 Dec 2022 and 1,900,000 expiring on 31 Dec 2025 were issued to Jan Bronkhorst &
Freddy Moketla, employees of the group. The performance rights are subject to the performance hurdles
described below.
Other than the above, no options over unissued ordinary shares were granted during or since the end of the
financial year.
Total unissued shares under option
The unissued ordinary shares under options and performance rights at the date of this report are –
Unlisted options (details below)
Unlisted performance rights (details below)
Number
48,011,433
12,420,000
60,431,433
2022 Annual Report
42
4 2
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Number
Unlisted Options
Performance Hurdle/Vesting Date
(if applicable)
Exercise
Price
Expiry
Date
800,000
Options will vest on 1 October 2021
400,000
Options will vest on 3 and 4 January 2022
7,500,000
Issued as part of a funding transaction in August 2021
18,571,433
Issued as part of a funding transaction in August 2021
15,000,000
Issued as consideration to extend secured bond for 12 months
640,000
-320,000 for production of over 25,000 ounces of gold over a
consecutive period of 3 months, and
-320,000 for production of over 37,500 ounces of gold over a
consecutive period of 3 months
3,200,000
1,900,000
-1,200,000 options upon a decision to mine.
-800,000 options upon production commencement, and
-1,200,000 options upon 3 months production (ounces) on schedule
as per Theta Project Optimised Feasibility Study or from underground
mine production, or the combination thereof, at AISC of
US$855/oz (+/- 10%).
-500,000 options upon production of over 12,500 ounces of gold over
a consecutive period of 3 months.
-600,000 options upon production of over 25,000 ounces of gold over
a consecutive period of 3 months, and
-800,000 options upon production of over 37,500 ounces of gold over
a consecutive period of 3 months.
48,011,433 Total Options
$0.30
$0.30
$0.275
$0.40
$0.17
$0.50
30 Sep
2022
31 Dec
2022
31 Jul
2023
30 Sep
2023
16 Jan
2024
30 Sep
2025
$0.40
30 Sep
2025
$0.50
31 Dec
2025
Number
Performance Hurdle/Vesting Date
(if applicable)
Exercise
Price
Expiry
Date
Unlisted Performance Rights
50,000
All systems, licences, insurances, regulatory and statutory compliance
in place to meet South Africa Mining regulations, laws, Mining Charter
111, commercial contacts. (Mine ready).
Nil
5,100,000 Achieving annualised production of 50,000 ounces of gold per annum
Nil
over a consecutive period of 3 months.
This performance hurdle must be achieved on or before 27 September
2022 (extended from 27 Dec 2021, being 30 months from the date of
issue of the performance right).
5,350,000 Achieving annualised production of 100,000 ounces of gold per annum
Nil
640,000
over a consecutive period of 3 months.
This performance hurdle must be achieved on or before 27 March
2024 (extended from 27 Jun 2023, being 48 months from the date of
issue of the performance right).
12 months production (ounces) on schedule as per Theta Project
Optimised Feasibility Study or from underground mine production, or
the combination thereof, at AISC of US$855/oz (+/- 10%).
Production of over 25,000 ounces of gold over a consecutive period of
3 months (100,000 oz pa).
Production of over 37,500 ounces of gold over a consecutive period of
3 months (150,000 oz pa).
12,420,000 Total Performance Rights
640,000
640,000
Nil
Nil
Nil
27 Jun
2024
27 Jun
2024
27 Jun
2024
30 Jun
2025
30 Sep
2025
30 Sep
2025
2022 Annual Report
43
4 3
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
The performance rights and option holders do not have any right to participate in any share issue of the
Company or any other body corporate.
Shares issued as a result of exercise of performance rights
During the current financial year, 920,000 shares were issued as a result of the exercise of performance rights
on the 20 August 2021 following the satisfaction of performance hurdles.
Indemnity and Insurance of Officers
The Company’s constitution states that “to the extent permitted by law, the Company may –
indemnify each relevant officer against a liability of that person and the legal costs of that person.
a)
b) make a payment (whether by way of advance, loan or otherwise) to a relevant officer in respect of legal
costs of that person.
c) enter into, or agree to enter into, or pay, or agree to pay a premium for a contract insuring a relevant
officer against a liability of that person and the legal costs of that person.”
During the financial year, the Consolidated Entity paid a premium for a Directors and Officers Liability
Insurance Policy for the benefit of the directors, secretaries, other officers, and employees of the Company.
The contract of insurance prohibits disclosure of the terms of the policy and the amount of premium paid.
Indemnity and Insurance of Auditors
To the extent permitted by law, the Company has agreed to indemnify its auditor, Ernst & Young Australia, as
part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for
an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the end of
the financial year.
Non-Audit Services
During the financial year, the auditor, Ernst & Young, did not provide any non-audit services to a controlled
entity. The Directors have considered the level and nature of all services provided by the auditor and, in
accordance with advice received from the Audit Committee, is satisfied that the nil provision of the non-audit
services during the year is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
Full details of the auditor’s remuneration are set out in Note 5 to the financial statements.
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 30 June 2022 is set out on page 53.
Rounding of Amounts to Nearest Thousand Dollars
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191 and in accordance with that Instrument, amounts in the Directors’ Report and the Financial
Report have been rounded to the nearest thousand dollars, unless otherwise stated.
2022 Annual Report
44
4 4
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Remuneration Report (Audited)
This report details the nature and amount of remuneration paid/payable to key management personnel of the
Consolidated Entity.
The key management personnel during the year were –
Directors
Charles William Guy, Executive Chairman (Appointed 10 November 2021)
Robert Peter Thomson, Managing Director and Non-Executive Director (Resigned as Managing Director on the
5 August 2020 and resigned as Director on the 13 August 2021)
Bill Richie Yang, Non-Executive Director
Finn Stuart Behnken, Non-Executive Director (Resigned on 15 August 2022)
Byron Dumpleton, Non-Executive Director (Appointed 10 November 2021)
Guyang (Brett) Tang, Non-Executive Director
Yang (Simon) Liu, Non-Executive Director
Other Key Management Personnel
Mitford Mundell, Chief Executive Officer (South Africa) (Ceased on 14 June 2022)
Jacques Du Triou, Chief Operations Officer (South Africa) (Appointed on 1 October 2020)
Phillip Rankin, Chief Financial Officer (Contractor) (Retired on 16 November 2021)
Brent Hofman, Chief Financial Officer / Company Secretary (Appointed on 16 November 2021)
Remuneration policy
The Board of Directors sets the remuneration policy to ensure that it is appropriate and effective in attracting
and retaining the best key management personnel (“KMP”) to manage the Consolidated Entity, as well as
create goal congruence between KMPs and shareholders. To that end, remuneration is structured to comprise
a fixed cash salary component and superannuation, supplemented by incentive securities (performance rights
and/or options) linked to share price performance or operational performance hurdles.
The Company has adopted an Employee Performance Rights and Option Plan (“Plan”). Grant of performance
rights and options under the Plan is at the discretion of the Board and is available to employees of the Company
as well as those of its subsidiaries in South Africa.
The Board’s policy is to remunerate non-executive directors at market rates for time, commitment, and
responsibilities. The Board sets the director fees payable to non-executive directors at A$50,000 per annum.
The maximum aggregate amount of fees that can be paid to non-executive directors shall be an amount not
exceeding in aggregate a maximum sum that is from time to time approved by shareholders in general meeting.
The current amount is A$600,000 per annum. In addition, non-executive directors receive extra remuneration
as determined by the Board where they perform services at the request of the Board which, in the opinion of the
Board are outside the scope of the ordinary duties of a Director.
Fees for non-executive directors are not linked to the performance of the Consolidated Entity. However, to
align directors’ interests with those of shareholders, all directors are encouraged to hold shares in the
Company.
2022 Annual Report
45
4 5
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Relationship between Remuneration Policy and Consolidated Entity Performance
Long term incentives
The Consolidated Entity’s remuneration policy in granting incentive securities to Directors and employees is
targeted at transforming the entity from a gold explorer to a gold producer.
To ensure that the whole team is focussed on the same objective of delivering the Theta Project (underground
mining) into production, the Board has determined that incentive securities issued to Directors and employees
should have the same operational performance hurdles instead of the varied share price and performance
hurdles in previous Options and Performance Rights. The Board believes that operational performance hurdles
are more appropriate incentives and align the interests of the Directors and employees with those of
shareholders. To that end, the performance rights currently on issue contain the following operational
performance hurdles focussed on the development and operation of the Theta Project.
During the year, the Company issued nil incentive performance rights or options, (2021, 1,900,000) to Directors
and employee’s of the group. Full details of the Performance Rights and Options as at balance date issued to
Directors and employee’s are set out in the table below
Grant
Date
Number
‘000
2022
2021
Performance Hurdle/Vesting
Date
(if applicable)
Exercise
Price
Vesting
Date
Expiry
Date
Value at
Grant
(fair
value as
per
AASB2)
01 Oct
2020
01 Oct
2020
26 Sep
2019
28 June
2019
28 June
2019
26 Sep
2019
28 June
2019
26 Sep
2019
800
800
400
400
50
50
-
-
-
920
4,000
300
5,000
5,500
100
100
2022 Annual Report
Employment commencement
(Options will vest on 1 October
2021, being 12 months from
commencement of
employment)
Achieving annualised
production of over 100,000
ounces and 150,000 ounces of
gold per annum over a
consecutive period of 3 months
All systems, licences,
insurances, regulatory and
statutory compliance in place to
meet South Africa Mining
regulations, laws, Mining
Charter 111, commercial
contacts. (Mine ready).
Delineating a total of 300,000
ounces of gold ore reserves (in
accordance with the JORC
Code 20121) at grade of at
least 2.5g/t Au, amenable to
open-cut mining on Mining
Right 83, Mining Right 341 and
Mining Right 10167 (under
application).
Decision to Mine (Board
approval to commence
development of a gold mining
operation) with all regulatory
approvals secured.
Achieving annualised
production of 50,000 ounces of
gold per annum over a
consecutive period of 3
months.
46
$0.30
A$0.25
On or
before 1
Oct 2021
30 Sept
2022
$0.30
A$0.25
Nil
A$0.16
On or
before 3
& 4 Jan
2022
On or
before 31
Mar 2023
31 Dec
2022
27 Jun
2024
Nil
A$0.16
On or
before 27
Dec 2021
27 Jun
2024
Nil
A$0.16
On or
before 27
Sep 2021
27 Jun
2024
A$0.155
Nil
A$0.16
A$0.155
On or
before 27
Sep 2022
27 Jun
2024
4 6
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
28 June
2019
26 Sep
2019
1 Oct
2020
1 Oct
2020
1 Oct
2020
1 Oct
2020
1 Oct
2020
1 Oct
2020
1 Oct
2020
1 Oct
2020
26 Jan
2021
26 Jan
2021
26 Jan
2021
Theta Gold Mines Limited
5,300
5,800
50
50
Achieving annualised
production of 100,000 ounces
of gold per annum over a
consecutive period of 3
months.
Nil
A$0.16
On or
before 27
Mar 2024
27 Jun
2024
A$0.155
1,200
1,200
Decision to Mine
$0.40
A$0.146
800
800
Production Commencement
$0.40
A$0.146
1,200
1,200
640
640
320
320
640
640
320
320
640
640
500
500
600
800
600
800
3 months production (ounces)
on schedule as per Theta
Project Optimised Feasibility
Study or from underground
mine production, or the
combination thereof, at AISC of
US$855/oz (+/- 10%)
12 months production (ounces)
on schedule as per Theta
Project Optimised Feasibility
Study or from underground
mine production, or the
combination thereof, at AISC of
US$855/oz (+/- 10%)
Production of over 25,000
ounces of gold over a
consecutive period of 3 months
(100,000 oz pa)
Production of over 25,000
ounces of gold over a
consecutive period of 3 months
(100,000 oz pa)
Production of over 37,500
ounces of gold over a
consecutive period of 3 months
(150,000 oz pa)
Production of over 37,500
ounces of gold over a
consecutive period of 3 months
(150,000 oz pa)
Production of over 12,500
ounces of gold over a
consecutive period of 3 months
Production of over 25,000
ounces of gold over a
consecutive period of 3 months
Production of over 37,500
ounces of gold over a
consecutive period of 3 months
On or
before 31
Mar 2023
On or
before 31
Dec 2023
On or
before 30
Jun 2024
30 Sep
2025
30 Sep
2025
30 Sep
2025
$0.40
A$0.146
Nil
A$0.25
On or
before 30
Jun 2025
30 Sep
2025
$0.50
A$0.1357
Nil
A$0.25
$0.50
A$0.1357
Nil
A$0.25
$0.50
A$0.39
$0.50
A$0.39
$0.50
A$0.39
On or
before 30
Sep 2025
On or
before 30
Sep 2025
On or
before 30
Sep 2025
On or
before 30
Sep 2025
On or
before 31
Dec 2025
On or
before 31
Dec 2025
On or
before 31
Dec 2025
30 Sep
2025
30 Sep
2025
30 Sep
2025
30 Sep
2025
31 Dec
2025
31 Dec
2025
31 Dec
2025
Total
19,360
25,580
2022 Annual Report
47
4 7
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Short term incentives
No key management personnel received performance-based bonuses during the financial year.
The table below sets out summary information about the Consolidated Entity’s performance for the
last five financial years.
Revenue
Net Loss Before Tax
Net Loss After Tax
Basic earnings per share
Diluted earnings per share
USD’000
USD’000
USD’000
US cents
US cents
Share price at start of year1
Share price at end of year1
Market capitalisation
AU cents
AU cents
AUD million
2022
2021
2020
2019
2018
-
7,636
7,636
(1.5)
(1.5)
22.5
7.0
38.5
-
4,365
4,365
(1.3)
(1.3)
29
22.5
107.3
-
5,490
5,490
(1.3)
(1.3)
16
29
128.1
-
5,172
5,172
(1.6)
(1.6)
11
16
61.3
-
4,129
4,129
(1.8)
(1.8)
26
11
28.2
1 On 30 November 2018, shareholders in general meeting approved a 10:1 consolidation of shares and options on issue at
that date. For comparative purposes, the basic and diluted earnings per share for the financial years ended 30 June 2016
- 20018 have been presented on a post consolidation basis as if the share consolidation had occurred in the prior financial
years.
Details of Remuneration
The following tables detail the components of remuneration for each key management personnel of the
Consolidated Entity.
Table of Benefits and Payments
SHORT-TERM BENEFITS
POST-
EMPLOYMENT
SHARE-BASED
TERMINATION
2022
Salary / Director
Fees
Consulting fees
Superannuation
Options/ Rights
Benefits
Total
Directors
Charles William Guy
Robert Peter Thompson
Bill Richie Yang
Simon Liu
Brett Tang
Bryon Dumpleton
Finn Stuart Behnken
USD
USD
USD
USD
USD
USD
174,111
5,521
36,270 94,310
36,276
33,127
20,229
36,276
- - 191,522
17,411
552
- - 6,073
- - - 130,580
- - - 36,276
- - 36,440
3,313
2,023
- - 22,252
- - - 36,276
Other Key Management Personnel
Brent Hofman
58,037
5,804
- - 63,841
Mitford Mundell
283,932
- 94,157 65,055 443,144
Jacques Du Triou
231,654
- 56,494
- 288,148
Key Management Personnel
915,433 94,310 29,103 150,651 65,055 1,254,552
1. Charles William Guy moved to Executive Chairman in November 2021.
2. Mr Chin Haw Lim and Mr George Jenkins retired during the year ended 30 June 2021 and are no longer KMP's.
2022 Annual Report
48
4 8
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
SHORT-TERM BENEFITS
POST-
EMPLOYMENT
SHARE-BASED
TERMINATION
2021
Salary / Director
Fees
Consulting fees
Superannuation
Options/ Rights
Benefits
Total
Directors
USD
USD
USD
USD
USD
Charles William Guy
114,128 60,946
- 8,971
- 184,045
Mr R Thomson
Mr B R Yang
Simon Liu
B Tang
F Behnken
49,084
40,629 86,887
37,504
34,250
37,505
- 34,287
5,431 (20,228)
- 10,957
- 138,473
- - - 37,505
- 42,982
- 35,651
3,254 5,478
- (1,854)
Other Key Management Personnel
Mr. C.H. Lim
Mr LM Mundell
J Du Triou
112,515
183,243
150,550
10,689 (16,183)
- 94,085
- 56,451
- 107,021
- 277,328
- 207,001
Mr. G. Jenkins
196,941
- 6,574
- 203,515
Total Key
Management Personnel
956,349 147,833 19,374 144,250
- 1,267,808
Key management personnel equity holdings
The following tables set out the equity holdings in the Company of key management personnel of the
Consolidated Entity.
Fully Paid Ordinary Shares
2022
Balance
1 July 2021
Acquisitions
Disposals
Net other
change
Balance
30 June 2022
Balance
nominally held
No.
No.
No.
No.
No.
No.
Directors
Charles William Guy
1,843,923
Robert Peter Thomson¹
1,367,342
Bill Richie Yang
Simon Liu
Brett Tang
Finn Behnken
Total Key
Management Personnel
2,611,168
7,972,103
33,325,334
-
47,119,870
-
-
-
-
-
-
-
-
(1,367,342)
-
-
-
-
-
-
-
-
-
1,843,923
1,843,923
-
-
2,611,168
2,611,168
7,972,103
7,972,103
33,325,334
33,325,334
200,000
200,000
200,000
(1,367,342)
200,000
45,952,528
45,952,528
1.Robert Thomson resigned as a non-executive director on 13 August 2021
2022 Annual Report
49
4 9
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Options and Performance Rights
2022
Balance
1 July 2021
Granted
Lapsed
Net other
change
Balance
30 June 2022
Vested and
exercisable
No.
No.
No.
No.
No.
Directors
Charles William Guy
3,200,000
Bill Richie Yang
Simon Liu
Brett Tang
4,000,000
400,000
2,000,000
Finn Stuart Behnken
1,200,000
Other Key Management Personnel
Mitford Mundell (CEO –
Africa)
Jacques Du Trio (COO –
Africa)
Total Key
Management Personnel
4,100,000
2,460,000
17,360,000
Service contracts
-
-
-
-
-
-
-
-
(800,000)
(1,000,000)
(400,000)
(500,000)
-
-
-
-
2,400,000
3,000,000
-
1,500,000
(200,000)
(200,000)
800,000
-
-
(2,900,000)
-
-
-
4,100,000
2,460,000
14,260,000
-
-
-
-
-
-
Name
Term
Base salary
Termination payment
Charles William Guy
Executive Chairman
From 10
November 2021
Brent Hofman,
Chief Financial Officer and
Company Secretary
(appointed 16 November
2021)
Mitford Mundell,
Chief Executive Officer –
Africa
Jacques Du-Triou,
Chief Operations Officer –
Africa
From 16
November 2021
From 1 October
2020 until
cessation on 16
June 2022
From 1 October
2020
Other transactions with KMPs
A$240,000 per annum
plus statutory
superannuation
A$160,000 per annum plus
statutory superannuation (pro-
rate basis)
3 months notice of
termination or pay in lieu
1 month notice of
termination or pay in lieu
ZAR3.36m per annum base.
3 months notice of
termination.
ZAR2.76m per annum base.
3 months notice of
termination.
The Company did not have any reportable transactions with directors or key management personnel other
than that disclosed above during the year.
2022 Annual Report
50
5 0
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
This directors’ report, incorporating the remuneration report, has been signed in accordance with a resolution
of the directors made pursuant to s298 (2) of the Corporations Act 2001.
For and on behalf of the Board
Charles William Guy
Chairman
Sydney
30 September 2022
2022 Annual Report
51
5 1
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Directors’ Declaration
The directors of Theta Gold Mines Limited declare that:
1. The financial statements and notes, as set out on pages 50 to91, are in accordance with the
Corporations Act 2001 and:
(a) comply with Australian Accounting Standards, which, as stated in accounting policy Note 1 to the
financial statements, constitutes compliance with International Financial Reporting Standards (IFRS);
and
(b) give a true and fair view of the Consolidated Entity’s financial position as at 30 June 2022 and of its
performance for the year ended on that date;
2.
In the directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable; and
3. The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of the directors made pursuant to section 295(5) of the Corporations
Act 2001.
On behalf of the Board
Charles William Guy
Chairman
Sydney
30 September 2022
2022 Annual Report
52
5 2
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Auditor’s independence declaration to the directors of Theta Gold
Mines Limited
As lead auditor for the audit of the financial report of Theta Gold Mines Limited for the financial year
ended 30 June 2022, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Theta Gold Mines Limited and the entities it controlled during the
financial year.
Ernst & Young
Scott Jarrett
Partner
Sydney
30 September 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
5 3
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Consolidated Statement of Profit or Loss
and Other Comprehensive Income for the Year Ended 30 June 2022
Notes
2022
USD’000
2021
USD’000
Continuing Operations
Revenue
Cost of sales
Gross loss
Other income
Finance costs
Exploration expenses
Operating expenses
Other Expenses
Loss before tax
Income tax expense
Loss for the year
Other comprehensive income, net of tax
Items that may be reclassified subsequently to profit or loss:
Unrealised gain/ (loss) on financial assets
Exchange difference on translating foreign operations
Other comprehensive (loss) / income for the year, net of
income tax
Total comprehensive loss for the year
Loss attributable to:
Equity holders of the parent
Total comprehensive income attributable to:
Equity holders of the parent
3a
3b
3c
3c
3d
25
-
-
-
181
(2,120)
(1,171)
(4,546)
20
(7,636)
-
-
-
-
154
(970)
(1,090)
(2,512)
51
(4,365)
-
(7,636)
(4,365)
(956)
(1,364)
-
1,891
(2,320)
1,891
(9,956)
(2,474)
(7,636)
(7,636)
(9,956)
(9,956)
(4,365)
(4,365)
(2,474)
(2,474)
Loss per share
Basic (cents per share)
Diluted (cents per share)
6
6
(1.5)
(1.5)
(0.9)
(0.9)
The accompanying notes form part of these financial statements
2022 Annual Report
54
5 4
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Consolidated Statement of Financial Position
as at 30 June 2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Receivables
Other receivable
Property, plant and equipment
Exploration expenditure
Financial asset
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Provisions
Borrowings
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
Borrowings
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Notes
2022
USD’000
2021
USD’000
7
7
9
10
11
8
12
13
14
13
14
22
149
171
171
39
1,427
695
16,193
1,328
19,682
19,853
747
682
7,749
9,178
1,701
4,157
5,858
15,036
4,817
200
180
380
380
43
1,563
1,099
15,760
525
18,990
19,370
952
838
7,254
9,044
1,554
84
1,638
10,682
8,688
15
17
92,891
6,546
(94,620)
4,817
87,881
7,793
(86,986)
8,688
The accompanying notes form part of these financial statements
2022 Annual Report
55
5 5
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
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5 6
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
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5 7
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Consolidated Statement of Cash Flows
for the Year Ended 30 June 2022
Notes
2022
USD’000
2021
USD’000
Cash flows from operating activities
Payments to suppliers and employees
Payments for exploration expenditure
Interest received
Interest paid
Income tax paid
Net cash flow used in operating activities
21
Cash flows from investing activities
Payments for property, plant and equipment
Payments for capitalised exploration expenditure
Acquisition of shares in listed companies
Proceeds from disposal of property, plant and equipment
Net cash flow used in investing activities
Cash flows from financing activities
Proceeds from issues of shares and other equity securities
Payments for share issue costs
Proceeds from borrowings
Repayment of borrowings
Net cash flow from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Exchange rate adjustments
Cash and cash equivalents at end of the year
(3,099)
(1,171)
38
(441)
-
(4,673)
(566)
(2,516)
(616)
21
(3,677)
4,006
(173)
4,477
(138)
8,172
(178)
200
-
22
(2,876)
(1,090)
6
(53)
-
(4,013)
(36)
(2,157
-
57
(2,136)
6,719
(512)
-
(5)
6,202
53
147
-
200
The accompanying notes form part of these financial statements
2022 Annual Report
58
5 8
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Notes to the Financial Statements
for the Year Ended 30 June 2022
Note 1: Basis of Preparation of Financial Report
i. Compliance Statement
These financial statements are general purpose financial statements which have been prepared in
accordance with the Corporations Act 2001, Australian Accounting Standards and Interpretations. The
financial statements comprise the consolidated financial statements of Theta Gold Mines Limited and its
controlled entities (“Consolidated Entity”). Compliance with Australian Accounting Standards ensures that
the financial statements and notes comply with International Financial Reporting Standards (‘IFRS’).
The financial statements were authorized for issue in accordance with a resolution of the directors on 30
September 2022
ii. Basis of Preparation
The consolidated financial statements have been prepared on the basis of historical cost, except for financial
instruments that are measured as at fair value at the end of each reporting period, as explained in the
accounting policies below.
Historical cost is generally based on the fair values of the consideration given in exchange for goods and
services. All amounts are presented in thousands of USD, unless otherwise noted.
iii. Going Concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of
normal business activities and the realization of assets and discharge of liabilities in the normal course of
business.
The Consolidated Entity made a loss of $7,636,000 for the year (2021: $4,365,000), with net cash outflows
from operating activities of $4,673,000 (2021: $4,013,000). At 30 June 2022, the Consolidated Entity had
net current liabilities of $9,007,000 (2021: $8,664,000).
The above matters indicate material uncertainty that may cast doubt on the Company’s and the Consolidated
Entity’s ability to continue as a going concern and whether the entity will realise its assets and extinguish its
liabilities in the normal course of business and at the amounts stated in the financial report.
Loans
Net liabilities of the company included a loan from 2Invest AG for $4,200,000 (A$6,000,000) provided by way
of a Secured Bond facility to assist in development funding for the TGME Underground Gold Mine Project as
announced in July 2021.
The Secured Bond comprises of fifteen (15) ‘bearer partial bonds’, each with a face value A$400,000 with
the full principal repayment of date 23 January 2023. In May 2022, the Company further announced that it
had the option to extend the repayment date by 12 months to 23 January 2024 at the discretion of the Theta
Board.
2022 Annual Report
59
5 9
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
The Secured Bond requires an annualized cash coupon rate of 20% payable half yearly in arrears. The
Company has met all its interest payment obligations to date under the Bond agreement.
Theta Gold Mines Limited
2 Invest AG is also a significant shareholder in the Company currently holding 6.28 % of the shares in TGM.
In addition the Company has included as a net current liability, a loan from Australian Private Capital
Investment Group (International) Ltd (“APCIG”), a company associated with Mr Simon Liu, a director of the
Company. At 30 June 2022, the loan and accrued interest amounted to $9,985,428 (2021: $7,061,930). As
explained in Note 14(b), the Company has formalised an agreement with Hanhong Private Equity Management
Company Ltd (“Hanhong”) and its subsidiary, Asia Field Enterprises Limited (“AFE”) (companies associated
with Mr Simon Liu), under which the parties agreed:
(i) That Hanhong and AFE agree to continue to procure the novation of the APCIG loan, replacing
APCIG with AFE or Hanhong’s nominee as lender;
(ii) That the amount owing under the APCIG loan is A$4,920,000 and upon novation of the APCIG loan;
(iii) The amount of A$4,920,000 is to be paid in the following manner following the novation of the APCIG
loan:
a. The sum of A$3,280,000 by cash payments (“Cash Payments”) to AFE, Hanhong or Hanhong’s
nominee; and
b. The sum of A$1,640,000 by the issue of shares in the capital of the Company to AFE, Hanhong or
Hanhong’s nominee (“Share Payment”).
(iv) If the Company repays or is ordered to repay APCIG, AFE and Hanhong shall indemnify the Company
for any amount it pays to or is ordered to pay to APCIG in excess of A$4,920,000.
At the date of the financial statements, the loan is yet to be novated to AFE or Hanhong’s nominee as lender
and the loan continues to be recorded at its full value and classified as a current liability.
Funding
The Company has historically demonstrated an ability to secure funding as and when required to meet its
ongoing financial obligations. The Company has raised a further A$5,870,000 (US$4,250,000) before issue
expenses during the year from share placements to institutions and sophisticated investors and continues to
be able to raise new funds to support its activities. As disclosed in Note 26, subsequent to balance date, the
Company issued 35,384,615 fully paid ordinary shares at an issue price of A$0.065 per share, raising a total
of A$2,300,000 (US$1,600,000) before cost.
In addition, the Company announced in July 2022 following the successful release of its DFS that it had
engaged debt advisors to complete a TGME Project Information Memorandum and banking model to discuss
potential debt funding transactions with numerous project financiers and institutions for the peak capital
requirements of the project of A$103 million. The Company expects non-binding initial offers and term-sheets
in the coming months and will update the market with results of that process.
The Company continues to proactively manage its cash flow requirements to ensure that funds are available,
including from capital raisings, as and when required.
The ability of the Consolidated Entity to continue as a going concern and meet its debts and commitments
as they fall due is dependent upon the Company continuing to be successful in raising additional funds and
receiving the ongoing financial support of the related party lender. In the event the Consolidated Entity is
unsuccessful in achieving the above, there is material uncertainty that may cast significant doubt as to
60
2022 Annual Report
6 0
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
whether the Consolidated Entity will continue as a going concern and, therefore, whether it will realise its
assets and settle its liabilities and commitments in the normal course of business and at the amounts stated
in the financial report.
The Directors believe that the Company will be successful in the above matters and, accordingly, have
prepared the financial report on a going concern basis. At this time, the Directors are of the opinion that no
asset is likely to be realised for an amount less than the amount at which it is recorded in the financial report
at 30 June 2022. Accordingly, no adjustments have been made to the financial report relating to the
recoverability and classification of the asset carrying amounts or the amounts and classification of liabilities
that might be necessary should the Company not continue as a going concern.
iv. Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgments incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future
events and are based on current trends and economic data, obtained both externally and within the
Consolidated Entity.
v. Key Judgments and Estimates
Impairment
The carrying amounts of the Consolidated Entity’s assets, including capitalized exploration costs (refer Note
11) are reviewed at each reporting date to determine whether there is any indication of impairment. If there
is any indication that an asset may be impaired, its recoverable amount is estimated.
Rehabilitation provision
The provision for rehabilitation and restoration costs is based on significant estimates and assumptions as
there are many factors that will affect the ultimate cost payable to rehabilitate the project sites. The provision
is based on current costs, current legal requirements and current technology, all of which could change over
time. Changes in life of mine plans is another significant factor. The provision is adjusted for inflation each
reporting period, however the actual rehabilitation costs can only be determined with certainty when all such
factors are known at the appropriate time.
Share based payment
The cost of equity-settled transactions with employees is measured by reference to the fair value of the equity
instruments at the date when they are granted. The fair value is determined by an external valuer.
The Company recognises a share-based payment expense based on the fair value of the equity instruments.
In determining the expense, significant assumptions and estimates are made including the vesting period
and probability of vesting.
Note 2: Summary of Significant Accounting Policies
a. Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Theta
Gold Mines Limited as at 30 June 2022 and the results of all subsidiaries for the year then ended. Theta
Gold Mines Limited and its subsidiaries together are referred to in these financial statements as the
'Consolidated Entity'.
2022 Annual Report
61
6 1
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Control is achieved when the Consolidated Entity:
a) has power over the investee;
b) is exposed, or has rights, to variable returns from its involvement with the investee; and
c) has the ability to use its power to affect its returns.
The Consolidated Entity reassesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control listed above.
Intercompany transactions, balances and unrealised gains on transactions between entities in the
Consolidated Entity are eliminated. Unrealised losses are also eliminated unless the transaction
provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with the policies adopted by the Consolidated
Entity.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement
of profit or loss and other comprehensive income, statement of financial position and statement of
changes in equity of the Consolidated Entity. Losses incurred by the Consolidated Entity are attributed
to the non-controlling interest in full, even if that results in a deficit balance.
Where the Consolidated Entity loses control over a subsidiary, it de-recognises the assets including
goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation
differences recognised in equity. The Consolidated Entity recognises the fair value of the consideration
received and the fair value of any investment retained together with any gain or loss in profit or loss.
b. Black Economic Empowerment (BEE) Transactions
Where equity instruments are issued to a BEE partner at less than fair value, these are accounted for
as share-based payments. The difference between the fair value of the equity instruments issued and
the consideration received is accounted for as an expense in profit or loss on the transaction date, with
a corresponding increase in equity. No service or other conditions exist for BEE partners. A restriction
on the BEE partner to transfer the equity instrument subsequent to its vesting is not treated as a vesting
condition but is factored into the fair value determination of the instrument.
c. Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that
necessarily take a substantial period of time to prepare for their intended use or sale, are added to the
cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit and loss in the period in which they are incurred.
d. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks, other short-
term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank
overdrafts are reported within short-term borrowings in current liabilities in the statement of financial
position.
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e. Earnings Per Share
Theta Gold Mines Limited
Basic Earnings Per Share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the
Consolidated Entity, excluding any costs of servicing equity other than ordinary shares, by the weighted
average number of ordinary shares outstanding during the financial year, adjusted for bonus elements
in ordinary shares issued during the year.
Diluted Earnings Per Share
Diluted earnings per share is calculated by dividing profit, adjusting for interest on the convertible
preference shares outstanding during the year plus weighted conversion of all potentially dilutive ordinary
shares.
f. Employee Benefit Liabilities
Provision is made for the Consolidated Entity’s liability for employee benefits arising from services
rendered by employees to the end of the reporting period. Employee benefits that are expected to be
settled within one year have been measured at the amounts expected to be paid when the liability is
settled. Employee benefits payable later than one year have been measured at the present value of the
estimated future cash outflows to be made for those benefits. Those cash flows are discounted using
market yields on corporate bonds with terms to maturity that match the expected timing of cash flows.
g. Exploration and evaluation expenditure
Exploration and evaluation expenditure is carried forward in the accounts in respect to areas of interest
for which the rights of tenure are current and where –
(i) such costs are expected to be recouped through successful development and exploitation of the area
of interest, or alternatively, by its sale; or
(ii) exploration and/or evaluation activities in the area have not yet reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves and
active and significant operations in, or in relation to, the area are continuing.
Where the expenditure is expected to be recouped through development and economic exploitation of the
area of interest, the accumulated costs are transferred to mine properties and amortised over the life of
the mine in proportion to the depletion of the economically recoverable mineral reserves.
Costs carried forward in respect of an area of interest which no longer satisfy the above policy are written
off in the period in which that decision is made.
Indirect exploration expenditure is expensed in the period it is incurred.
h. Financial Instruments
Classification and measurement
i. Financial Assets
The Consolidated Entity initially measures a financial asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss, transaction costs.
Debt financial instruments are subsequently measured at fair value through profit or loss (FVPL),
amortised cost, or fair value through other comprehensive income (FVOCI). The classification is based
on two criteria: the Consolidated Entity’s business model for managing the assets; and whether the
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Theta Gold Mines Limited
instruments’ contractual cash flows represent ‘solely payments of principal and interest’ on the principal
amount outstanding (the ‘SPPI criterion’).
The classification and measurement of the Consolidated Entity’s financial assets are, as follows:
• Debt instruments at amortised cost for financial assets that are held within a business model with the
objective to hold the financial assets in order to collect contractual cash flows that meet the SPPI
criterion. This category includes the Consolidated Entity’s receivables and other receivables,
Other financial assets are classified and subsequently measured, as follows:
• Equity instruments at FVOCI, with no recycling of gains or losses to profit or loss on derecognition.
This category only includes equity instruments, which the Consolidated Entity intends to hold for the
foreseeable future and which the Consolidated Entity has irrevocably elected to so classify upon
initial recognition or transition.
• Financial assets at FVPL comprise derivative instruments and quoted equity instruments which the
Consolidated Entity had not irrevocably elected, at initial recognition or transition, to classify at
FVOCI. This category would also include debt instruments whose cash flow characteristics fail the
SPPI criterion or are not held within a business model whose objective is either to collect contractual
cash flows, or to both collect contractual cash flows and sell. The shares in Bullion Asset
Management are accounted for as a financial asset at FVPL.
Impairment
The Consolidated Entity is required to record an allowance for ECLs for all loans and other debt financial
assets not held at FVPL.
ECLs are based on the difference between the contractual cash flows due in accordance with the
contract and all the cash flows that the Consolidated Entity expects to receive. The shortfall is then
discounted at an approximation to the asset’s original effective interest rate.
For receivables and other receivables, the Consolidated Entity applies the standard’s simplified
approach and calculates ECLs based on lifetime expected credit losses.
For other debt financial assets (i.e., loans and debt securities at FVOCI), the ECL is based on the 12-
month ECL. The 12-month ECL is the portion of lifetime ECLs that results from default events on a
financial instrument that are possible within 12 months after the reporting date. However, when there
has been a significant increase in credit risk since origination, the allowance will be based on the lifetime
ECL.
The Consolidated Entity considers a financial asset in default when contractual payment are 90 days
past due. However, in certain cases, the Consolidated Entity may also consider a financial asset to be
in default when internal or external information indicates that the Consolidated Entity is unlikely to
receive the outstanding contractual amounts in full before taking into account any credit enhancements
held by the Consolidated Entity.
ii. Financial Liabilities
Financial liabilities at fair value through profit or loss are stated at fair value, with any gains or losses
arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or
loss incorporates any interest paid on the financial liability and is included in the ‘other gains and
losses' line item. Fair value is determined in the manner described in note 23.
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at
amortised cost.
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iii. Compound instruments
Theta Gold Mines Limited
The component parts of compound instruments (convertible bonds) issued by the Consolidated
Entity are classified separately as financial liabilities and equity in accordance with the substance
of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Conversion options that will be settled by the exchange of a fixed amount of cash or another
financial asset for a fixed number of the Consolidated Entity’s own equity instruments is an equity
instrument.
At the date of issue, the fair value of the liability component is estimated using the prevailing market
interest rate for similar non-convertible instruments. This amount is recognised as a liability on an
amortised cost basis using the effective interest method until extinguished upon conversion or at
the instrument’s maturity date.
The conversion option classified as equity is determined by deducting the amount of the liability
component from the fair value of the compound instrument as a whole. This is recognised and
included in equity, net of income tax effects, and is not subsequently remeasured. In addition, the
conversion option classified as equity will remain in equity reserves until the conversion option is
exercised, in which case, the balance recognised in equity will be transferred to issued capital.
Where the conversion option remains unexercised at the maturity date of the convertible note, the
balance recognised in equity will be transferred to retained profits/ accumulated losses. No gain
or loss is recognised in profit or loss upon conversion or expiration of the conversion option.
Transaction costs that relate to the issue of the convertible notes are allocated to the liability and
equity components in proportion to the allocation of the gross proceeds. Transaction costs relating
to the equity component are recognised directly in equity. Transaction costs relating to the liability
component are included in the carrying amount of the liability component and are amortised over
the lives of the convertible notes using the effective interest method.
Embedded derivatives are no longer separated from a host financial asset. Instead, financial
assets are classified based on their contractual terms and the Consolidated Entity’s business
model.
iv. De-recognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or
the asset is transferred to another party whereby the entity no longer has any significant continuing
involvement in the risks and benefits associated with the asset. Financial liabilities are
derecognised where the related obligations are discharged, cancelled or expired. The difference
between the carrying value of the financial liability extinguished or transferred to another party and
the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed,
is recognised in profit or loss.
Derivative financial instruments
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into
and are subsequently remeasured to their fair value at the end of each reporting period. The resulting
gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective
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Theta Gold Mines Limited
as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the
nature of the hedge relationship.
Derivatives embedded in non-derivative host contracts are treated as separate derivatives when they
meet the definition of a derivative, their risks and characteristics are not closely related to those of
the host contracts and the contracts are not measured at fair value through profit or loss.
i. Foreign Currency Translation
i.
Functional and presentation currency
Items included in the financial statements of each of the Consolidated Entity’s subsidiaries are
measured using the currency of the primary economic environment in which the subsidiary
operates. The consolidated financial statements are presented in United States Dollars (USD); on
the basis that the US dollar is the most appropriate base given the Consolidated Entity operates
in more than one currency and has a large investor base which operates in a different functional
currency to all companies in the Consolidated Entity.
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in profit or loss, except
when they are attributable to part of the net investment in a foreign operation.
ii. Net investments in foreign operations
The results and financial position of foreign operations (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency
are translated into the presentation currency as follows:
a) Assets and liabilities are translated at year-end exchange rates prevailing at that reporting
date;
b)
Income and expenses are translated at average exchange rates for the period, and
c) All resulting exchange differences are recognised in other comprehensive income.
j. Goods and Services Tax (GST) and Value Added Tax (VAT)
Revenues, expenses and assets are recognised net of the amount of GST and VAT, except where the
amount of GST incurred is not recoverable from the Australian Tax Office (ATO) and South African
Revenue Service (SARS).
Receivables and payables are stated inclusive of the amount of GST and VAT receivables or payable.
The net amount of GST and VAT recoverable from, or payable to, the ATO and SARS is included with
other receivables or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST and VAT components of cash flows arising from
investing and financing activities which are recoverable from, or payable to, the ATO and SARS are
presented as operating cash flows and included in receipts from customers or payments to suppliers.
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k.
Income Tax
Theta Gold Mines Limited
The income tax expense (benefit) for the year comprises current income tax expense (benefit) and
deferred tax expense (benefit).
Current income tax expense charged to the profit or loss is the tax payable on taxable income. Current
tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant
taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability
balances during the year as well as unused tax losses.
Current and deferred income tax expense (benefit) is charged or credited outside profit or loss when
the tax relates to items that are recognised outside profit or loss.
Deferred tax assets and liabilities are calculated at the tax rate that are expected to apply to the period
when the assets is realised or the liability is settled and their measurement also reflects the manner in
which management expects to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the
extent that it is probable that future taxable profit will be available against which the benefits of the
deferred tax asset can be utilised.
Deferred tax assets and liabilities are offset where (a) a legally enforceable right of set off exists, (b) the
deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either
the same taxable entity or different taxable entities where it is intended that net settlement or
simultaneous realisation and settlement of the respective asset and liability will occur in future periods
in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
l.
Impairment of Assets
At the end of each reporting period, the Consolidated Entity assesses whether there is any indication
that an asset may be impaired. The assessment will include the consideration of external and internal
sources of information. If such an indication exists, an impairment test is carried out on the asset by
comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs to
sell and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying amount over
its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a
revalued amount in accordance with another Standard (e.g. in accordance with the revaluation model
in AASB116). Any impairment loss of a revalued asset is treated as a revaluation decrease in
accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Consolidated
Entity estimates the recoverable amount of the cash generating unit to which the asset belongs.
m. Leases
The Consolidated Entity assesses at contract inception whether a contract is, or contains, a lease, that
is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange
for consideration.
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Theta Gold Mines Limited
Right-of-use assets
The Consolidated Entity recognises right-of-use assets at the commencement date of the lease (i.e., the
date the underlying asset is available for use). Right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease
liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct
costs incurred and lease payments made at or before the commencement date less any lease incentives
received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term
and the estimated useful lives of the assets.
Lease liabilities
A lease liability is recognised at the commencement of the lease. The Consolidated Entity recognises
lease liabilities measured at the present value of lease payments to be made over the lease term. The
lease payments include fixed payments (including in-substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected
to be paid under residual value guarantees. The lease payments also include the exercise price of a
purchase option reasonably certain to be exercised by the Consolidated Entity and payments of penalties
for terminating the lease, if the lease term reflects the Consolidated Entity exercising the option to
terminate. Variable lease payments that do not depend on an index or a rate are recognised as
expenses (unless they are incurred to produce inventories) in the period in which the event or condition
that triggers the payment occurs.
Short-term leases and leases of low-value assets
The Consolidated Entity applies the short-term lease recognition exemption to its short-term leases of
machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option). It also applies the lease of low-value assets
recognition exemption to leases of office equipment that are considered to be low value. Lease
payments on short-term leases and leases of low-value assets are recognised as expense on a straight-
line basis over the lease term.
n. Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost as indicated less, where applicable, any
accumulated depreciation and impairment losses.
Depreciation
The depreciable amount of all fixed assets including capitalised lease assets, but excluding freehold
land, is depreciated on a straight-line basis over the asset’s useful life commencing from the time the
asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the
unexpired period of the lease or the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Furniture and fittings
Plant and machinery
Computer equipment
Motor vehicles
Buildings
Depreciation Rate
16.66%
20%
33.33%
20%
5%
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
The assets’ carrying amounts and useful lives are reviewed, and adjusted if appropriate, at the end of
each reporting period.
An asset’s carrying value is written down immediately to its recoverable amount if the asset’s carrying
value is greater than its estimated recoverable amount.
o. Provisions
Provisions are recognised when the Consolidated Entity has a present legal or constructive obligation
as a result of past events, for which it is probable that an outflow of economic benefits will be required
to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
p. Rehabilitation Provision
Estimated
long-term environmental provisions, comprising pollution control,
rehabilitation,
decommissioning and mine closure, are independently calculated by third parties based on current
technological, environmental and regulatory requirements. The provision for rehabilitation is
recognised as and when the environmental liability arises.
The provision is based on the estimated cost before salvages, for the Consolidated Entity to
rehabilitate the mine sites. The present value of the provision for rehabilitation costs is updated using
an average inflation rate during periods when limited environment disturbance is caused.
q. Rounding of Amounts to Nearest Thousand Dollars
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191 and in accordance with that Instrument, amounts in the Directors’ Report and the
Financial Report have been rounded to the nearest thousand dollars, where specified.
r. Accounting Standards and Interpretations issued but not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or amended but
are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting
period ended 30 June 2022. Management have reviewed the accounting standards that are not yet
mandatory and do not believe that they do not have a material impact to the consolidated entity and
therefore they are not expected to have a material impact on the financial statements.
s. New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for
the current reporting period. The impact of their adoption has not been material.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not
been early adopted.
Comparative figures
The opening balance of 503,246 shares at 1 July 2021 was adjusted due to an discrepancy identified
during the audit for 2022. The closing balance at 30 June 2021 of 476,946 shares excluded 26,300,000
shares issued during that year.
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Theta Gold Mines Limited
Note 3: Profit /Loss from Operations
(a) Other income
Interest income
Other income
(b) Finance Costs
Loans – non-related parties
Loans – vendors
Loans – related parties
(c) Operating expenses
Administration expenses
Consultants expenses and professional costs
Employee and contractor expenses
Depreciation
Share Based Payments
Impairment of PPE item
Other operating expenses
Reclassified as Exploration expenses
(d) Other expenses (non-cash)
Provision for Doubtful Debts
Other Expenses
Impairment of assets
2022
USD’000
97
84
181
1,135
9
976
2,120
590
1,080
1,935
78
189
782
1,063
5,717
(1,171)
4,546
-
(20)
-
(20)
2021
USD’000
68
86
154
-
-
970
970
448
1,042
1,969
32
141
-
(31)
3,602
(1,090)
2,512
-
(51)
-
(51)
Note 4: Key Management Personnel Compensation
Details of the remuneration paid or payable to each member of the Consolidated Entity’s key
management personnel (KMP) are set out in the Remuneration Report contained in the Directors’
Report on pages 45 to 51.
Total remuneration paid or payable to KMPs is as follows:
Short-term employee benefits
Post-employment benefits
Termination benefits
Share-based payments
2022 Annual Report
70
2022
USD
2021
USD
1,009,744
1,104,184
29,102
65,055
150,651
19,374
-
144,250
1,254,552
1,267,808
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Note 5: Auditor’s Remuneration
Audit and review of financial report
- Ernst & Young, Australia
- Ernst & Young, South Africa
Taxation services
- Ernst & Young, South Africa
Note 6: Loss per Share
Basic loss per share
Diluted loss per share
2022
USD
78,239
51,679
129,918
-
129,918
2021
USD
70,808
43,505
114,313
-
114,313
Cent
(1.5)
(1.5)
Cent
(0.9)
(0.9)
USD’000
USD’000
Loss used to calculate basic and diluted loss per share
7,636
4,365
Weighted average number of ordinary shares used in calculating
basic and diluted loss per share
Number of
shares
Number of
shares
503,700,462
476,945,666
The Consolidated Entity has a number of options and performance rights on issue. Options and performance
rights have not been included in the earnings per share calculation due to being non-dilutive for the year.
Note 7: Receivables
Current
Trade receivables
Tax receivable
Other receivables
Non-current
Security deposits
2022
USD’000
2021
USD’000
-
74
75
149
39
1
69
109
180
43
The value of receivables considered by the directors to be past due or impaired is nil (2021: nil).
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Note 8: Financial asset
Investments in Focus Minerals Limited
Shares in Bullion Asset Management Services Pte Ltd
Total Financial Assets
2022
USD’000
2021
USD’000
846
482
1,328
-
525
525
During the year the Company acquired 3,199,593 shares in Focus Minerals Limited (FML) made up of
1,856,198 shares purchased directly on market and 1,343,395 shares via an allocation available in a
Renounceable Entitlement Offer by FML in December 2021. The market value of these shares in FML
was $330,726, (A$479,939).
In December 2021 the Company also announced its intention to make an off-market takeover bid for the
shares in FML. The original offer was on a 2 for 1 basis where each FML shareholders who took up the
offer would receive 2 shares in TGM. In February 2022, TGM announced they had improved the offer for
FML shares to 5 new TGM shares for every 2 FML shares. As at the closing date in March 2022 of the
TGM off market offer, TGM had received a total of 4,977,984 acceptances in the offer and gain
approximately 417 new TGM shareholders on the registry. As a result, TGM issued 12,445,002 new TGM
shares as consideration under the 5 for 2 script for script takeover offer. The market value of these shares
in FML was $515,549, (A$745,698).
The investment in FML is recognized as a financial asset and has been measured at fair value through
equity reserve account at 30 June 2022 at $846,275 (A$1,226,637).
In January 2021, the Company made an TGM-script based equity investment in Bullion Asset
Management Services Pte Ltd (“BAM”), a Singapore-based technology company focused on financing,
tokenization of physical gold bullion and precious metals trading. The investment in BAM comprised an
initial subscription of A$700,000 worth of BAM shares which was settled on 29 January 2021 by the issue
of 2,087,682 Theta Gold shares at $0.335 per share. The Company wishes to retain its investment in
BAM and continue to work with the group in alternative gold financing and project joint venture initiatives.
The investment in BAM is recognised as a financial asset and measured at fair value through profit and
loss in accordance with the company's accounting policy. The fair value of the financial asset as at 30
June 2022 is $482,000, A$700,000 (2021: $525,000; A$700,000) based on the fair value of the BAM
share price of US$1 per share as determined by management.
Note 9: Other Receivable
Rehabilitation investment fund
2022
USD’000
2021
USD’000
1,427
1,563
The rehabilitation funds are pledged to a third party as security for the issue of rehabilitation guarantees
to the Department of Mineral Resources and Energy in South Africa in support of various mining licenses.
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Note 10: Property, Plant and Equipment
Theta Gold Mines Limited
Land and buildings
Land and buildings - at cost
Less accumulated depreciation
Plant and machinery
Plant and machinery - at cost
Less accumulated depreciation
Other plant and equipment
Other plant and equipment - at cost
Less accumulated depreciation
Total Property, Plant and Equipment
Movements:
Land and buildings
Opening net book value
Disposals
Depreciation and impairment
Reclassified from/(to) assets held for sale
Exchange rate effect
Closing net book value
Plant and machinery
Opening net book value
Additions
Depreciation
Impairment*
Exchange rate effect
Closing net book value
2022
USD’000
2021
USD’000
414
(189)
225
669
(261)
408
143
(81)
62
695
476
(220)
256
1,686
(888)
798
173
(128)
45
1,099
2022
USD’000
2021
USD’000
257
-
(4)
-
(28)
225
796
519
(51)
(782)
(74)
408
224
-
(4)
-
37
257
669
-
-
(13)
140
798
*During the period the company impaired the full value of the Ball mill to a recoverable value of zero. This is
due to a change in project strategy and re-designed of the processing plant, therefore the mill was no
longer conductive for the development.
Other
Opening net book value
Additions
Disposals
Depreciation and impairment
Exchange rate effect
Closing net book value
2022 Annual Report
73
45
48
(1)
(23)
(7)
62
23
36
(4)
(15)
5
45
7 3
432
(161)
-
-
(47)
224
74
700
-
(19)
(86)
669
28
15
-
(14)
(6)
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ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Note 11: Exploration Expenditure
Exploration expenditure
Movements:
Opening net book value
Additions
Exchange rate effect
Closing net book value
Note 12: Trade and Other Payables
Trade payables
Accrued expenses
2022
USD’000
2021
USD’000
16,193
15,760
15,760
2,528
(2,095)
16,193
11,379
1,964
2,417
15,760
12,375
1,426
(2,422)
11,379
2022
USD’000
2021
USD’000
351
396
747
488
464
952
The average credit period on purchases of goods is 30 days. No interest is charged on the trade payables
for the first 30 days from the date of the invoice. Thereafter, interest is charged at variable rates per
annum on the outstanding balances from certain suppliers.
Note 13: Provisions
Current
Provision for employee benefits
Accural for audit fees
Provision for tax penalty
Provision for tax
Non-Current
Provision for rehabilitation
Movements:
Balance at beginning of year
Changes in estimate during year
Exchange rate effect
Balance at end of year
(a)
(b)
2022
USD’000
2021
USD’000
89
54
539
-
682
175
83
580
-
838
1,701
1,554
1,554
362
(215)
1,701
1,578
(337)
314
1,554
2022 Annual Report
74
7 4
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
(a)
The provision for tax penalty relates to a penalty assessed by the South African Revenue Service
(“SARS”) on a subsidiary of the Company in respect to the financial years ended 30 June 2016, 2017
and 2018. The subsidiary had lodged its income tax returns in those years, based on professional
advice, on the basis that deductible expenses were available as losses carried forward to be used
against future assessable income. However, SARS has determined that the expenditure should have
been capitalized as the subsidiary was not in production in those periods and claimed the capitalized
costs as amortizable costs against future assessable income. Notwithstanding the subsidiary has not
utilized any of the losses carried forward, SARS has assessed a penalty of 25% of the tax benefit
deemed to have been received by the subsidiary.
The subsidiary is strongly objecting against the penalty assessment, however has made the provision
in accordance with accounting standards.
(b)
The rehabilitation provision relates to the Consolidated Entity’s obligation to restore and rehabilitate
areas within its mining tenements where there have been exploration and mining activities in the
past. The provision includes costs relating to the decommissioning of the gold processing plant.
The provision is partially supported by cash held in a Rehabilitation Investment Fund (Note 9).
Note 14: Borrowings
Current
Secured
Vendor finance
Unsecured
Loan – related party
Loan – unrelated party
Total
Non-Current
Secured
Loan – unrelated party
Vendor finance
(a)
Vendor finance
2022
USD’000
2021
USD’000
98
98
7,410
241
7,651
7,749
4,125
32
4,157
80
80
7,062
113
7,175
7,254
-
84
84
(a)
(b)
(c)
(d)
The loan is secured by registration of a first covering private bond in favour of the lender, over the
property purchased by a controlled entity from the lender in 2014. The loan is repayable over 10 years
from August 2014 and interest is payable at the South African prime rate plus 2%.
Also includes premium insurance funding with Attvest Finance Pty Ltd for Director and Officer insurance
cover for 2022-23 at 5.7% per annum.
2022 Annual Report
75
7 5
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
(b)
Loan – related party
Theta Gold Mines Limited
In 2013, the Company entered into a loan agreement with Australian Private Capital Investment Group
(International) Ltd (“APCIG”), a company associated with Mr Simon Liu, a director of the Company,
whereby APCIG lent the Company A$4,000,000 (USD 2,805,200). The key terms of the loan are –
(i)
Interest accrues at the rate of 10% per annum and 15% per annum on overdue principal and
interest;
(ii)
The loan is unsecured;
As previously announced, certain individuals purporting to represent the loan provider, APCIG, have
threatened the Company with various claims, including issuing statutory demands on the Company on
two occasions, the most recent in May 2017. On both occasions, the courts have issued orders that the
statutory demands be set aside.
The Company’s view was, and remains, that the claims were without foundation and were otherwise
considered frivolous and vexatious. The Company’s position was that the parties purporting to represent
APCIG sought to establish their entitlement by commencing legal proceedings. If the confusion
continues, the Company will seek direction from a court of competent jurisdiction to reach a
determination as to who the Company should in fact repay and so direct the Company to do so.
In the previous reporting period, the Company formalised an agreement with the controller of the APCIG
Loan, Hanhong Private Equity Management Company Ltd (“Hanhong”) and its subsidiary, Asia Field
Enterprises Limited (“AFE”) (companies associated with Mr Simon Liu), under which the parties agreed:
(i) That Hanhong and AFE agree to continue to procure the novation of the APCIG Loan, replacing APCIG
with AFE or Hanhong’s nominee as lender;
(ii) That the amount owing under the APCIG Loan is A$4,920,000 and upon novation of the APCIG Loan;
(iii) The amount of A$4,920,000 is to be repaid in the following manner:
a. The sum of A$3,280,000 by cash payments (Cash Payments) to AFE, Hanhong or Hanhong’s
nominee; and
b. The sum of A$1,640,000 by the issue of shares in the capital of the Company to AFE, Hanhong
or Hanhong’s nominee (Share Payment).
(iv) The Cash Payments will comprise four (4) equal instalments paid every six calendar months,
commencing on the last day of the sixth month following confirmation that Transvaal Gold Mining Estates
Limited, a subsidiary of the Company, has achieved gold production at an annualised rate of 40,000
ounces of gold over a consecutive period of three (3) months;
(v) The Share Payment will be made one month after novation of the APCIG Loan to AFE or Hanhong’s
nominee;
(vi) If the Company repays or is ordered to repay APCIG, AFE and Hanhong shall indemnify the Company
for any amount it pays to or is ordered to pay to APCIG in excess of A$4,920,000.
Until the loan is novated to AFE or Hanhong’s nominee as lender, interest will continue to accrue in
accordance with the original loan agreement and the full amount will continue to be classified as a
current liability.
(c)
Loan – non related party
Short-term loan from Aus Agriculture Pty Ltd of $350,000, (A$241,000) at 8% per annum, annualised.
(d)
Loan – non related party
During the period the company was provided a Secured Bond Facility by 2Invest AG. The Bond
outstanding payable amount is A$6,000,000 (USD 4.1 million) with an annualised coupon rate of 20%
paid half-yearly in arrears. The principle amount of the bond is due 18 months from draw down date
with the option to extend for a further 12 months.
Principle
Issue costs
Amortization
2022 Annual Report
76
4,135
(631)
621
4,125
-
-
-
-
7 6
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Note 15: Issued Capital
Issued and paid-up shares
(a) Movements
2022
01 Jul 2021
11 Aug 2021
19 Aug 2021
01 Oct 2021
02 Mar 2022
11 Mar 2022
06 May 2022
Balance at beginning of year
Share Placement
Exercise of Performance Rights
Share Placement
Shares issued under TGM Offer
Shares issued under TGM Offer
Share Placement
Less: Share issue expenses
2022
USD’000
2021
USD’000
92,891
87,881
Number of
Shares
‘000
503,246¹
12,695
920
8,571
5,085
7,360
12,350
-
USD’000
87,881
1,958
-
1,299
496
754
983
(480)
30 June 2022
92,891
-
92,891
1. The opening balance of 503,246 shares at 1 July 2021 was adjusted due to an discrepancy identified during the audit for
Balance at end of year
Less: Treasury shares held
Balance at end of year
550,227
24,000
526,227
30 June 2022
2022. The previous closing balance at 30 June 2021 of 476,946 shares excluded 26,300,000 shares issued during that
year.
2021
01 Jul 2020
15 Jul 2020
15 Jul 2020
27 Jul 2020
27 Jul 2020
16 Aug 2020
16 Sep 2020
3 Nov 2020
29 Jan 2021
23 Mar 2021
23 Mar 2021
25 Mar 2021
21 Apr 2021
30 June 2021
Balance at beginning of year
Exercise of Options
Exercise of Options
Share Placement
Share Placement
Exercise of Options
Share Placement
Exercise of Options
Share Placement
Share Placement
Share Placement
Share Placement
Exercise of Performance Rights
Less: Share issue expenses
Balance at end of year
Less: Treasury shares held
30 June 2021
Balance at end of year
Number of
Shares
‘000
USD’000
441,657
100
159
11,771
729
337
4,167
1,219
2,088
5,385
9,334
24,000¹
2,300
-
503,246
24,000
479,246
81,349
13
21
2,014
125
46
733
259
536
1,137
1,970
-
-
(321)
87,881
-
87,881
1. On 25 March 2021 the Company for no cash consideration provided 24 million shares as security over an At-The-Market
facility with Acuity Capital.
2022 Annual Report
77
7 7
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Ordinary Shares
Theta Gold Mines Limited
At a general meeting, on a show of hands, each shareholder present and each other person present as a
proxy, attorney or corporate representative of a shareholder and entitled to vote has one vote. On a poll,
each shareholder present and each other person present as a proxy, attorney or corporate representative
of a shareholder and entitled to vote:
(i)
(ii)
has one vote for each fully paid share held; and
has for each share which is not fully paid a fraction of a vote equivalent to the proportion which
the amount paid up, but not credited as paid up, on that share bears to the total of the amounts
paid and payable (excluding amounts credited) on that share.
Fully paid ordinary shares carry a right to dividends and upon the winding up of the Company.
Capital management
The Consolidated Entity’s funding requirements are largely sourced from equity raisings. Its objectives in
capital management are to ensure that it can meet its debts and commitments as and when they fall due
and to maintain an optimal capital structure to reduce the cost of capital.
Note 16: Options and Performance Rights
Listed options (ASX: TGMO)
Unlisted options
Unlisted performance rights
16(b)
16(c)
16(d)
a) Movements
Balance at beginning of year
Listed options issued
Listed options exercised
Listed options lapsed
Unlisted options issued
Unlisted options exercised
Unlisted options lapsed
Performance rights issued
Performance rights lapsed
Performance rights exercised
Balance at end of year
2022
Number
’000
-
48,011
12,420
60,431
2022
Number
’000
33,738
-
-
-
51,443
-
(18,530)
-
(5,300)
(920)
2021
Number
’000
-
15,098
18,640
33,738
2021
Number
’000
62,284
-
(1,219)
(32,536)
12,773
(596)
(408)
1,920
(6,180)
(2,300)
70,023
2,325
2,325
(300)
12,589)
500
-
-
-
-
60,431
33,738
62,284
2022 Annual Report
78
7 8
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
b) Unlisted Options at 30 June 2022
Grant date
29 Apr 2020
1 Oct 2020
1 Oct 2020
1 Oct 2020
30 Nov 2020
18 Dec 2020
1 Jan 2021
1 Jan 2021
11 Aug 2021
11 Aug 2021
1 Oct 2021
4 Oct 2021
6 Oct 2021
16 May 2022
Weighted average
exercise price
2022
Number
‘000
2021
Number
‘000
Expiry date
Exercise
price
-
800
3,200
640
-
-
400
1,900
7,500
8,200
2,929
1,190
6,252
15,000
48,011
A$0.31
2,325 27 Apr 2022
30 Sep 2022
800
3,200
640
30 Sep 2025
30 Sep 2025
833
27 Apr 2022
5,000 30 Jun 2022
31 Dec 2022
31 Dec 2025
31 July 2023
30 Sep 2023
30 Sep 2023
30 Sep 2023
30 Sep 2023
16 Jan 2024
400
1,900
-
-
-
-
-
-
15,098
A$0.44
A$0.40
A$0.30
A$0.40
A$0.50
A$0.40
A$0.50
A$0.30
A$0.50
A$0.27.5
A$0.40
A$0.40
A$0.40
A$0.40
A$0.17
a) During the year, the Company issued 36,442,862 unlisted options exercisable at varies prices and
exercise dates as part of a A$10.6 million funding package as announced on 30 July 2021. The various
unlisted options were issued as follows:
I.
II.
III.
IV.
7,500,000 unlisted options exercisable at A$0.275 with an expiry date of 31 July 2023 and
8,200,000 unlisted options exercisable at A$0.40 with an expiry date of 30 September 2023
as a condition of a Secured Bond facility provided by 2Invest AG;
6,252,381 unlisted options exercisable at A$0.40 with an expiry date of 30 September 2023
and 6,252,381 unlisted options exercisable at A$0.26 with an expiry date of 31 December 2021
as part of a Placement to 2Invest AG which was split between three funding tranches;
2,928,574 unlisted options exercisable at A$0.40 with an expiry date of 30 September 2023
and 2,928,574 unlisted options exercisable at A$0.26 with an expiry date of 31 December 2021
as part of a Private Placement to various Australian and Overseas sophisticated and
professional investors; and
1,190,476 unlisted options exercisable at A$0.40 with an expiry date of 30 September 2023
and 1,190,476 unlisted options exercisable at A$0.26 with an expiry date of 31 December 2021
as part of a Share Purchase Plan to various Australian and Overseas sophisticated and
professional investors.
b) 10,371,431 unlisted options included above, exercisable at A$0.26, expired on 17 December 2021.
c) 15,000,000 unlisted options issued on 16 May 2022 with an exercise price of $0.17, expiring on 16
January 2024 as part of the conditions to extend the repayment of the Secured Bond facility payable
to 2Invest AG as announced to ASX on 13 May 2022.
2022 Annual Report
79
7 9
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
(d) Unlisted performance rights
Grant date
28 Jun 2019
26 Sep 2019
1 Oct 2020
2022
Number
‘000
10,500
-
1,920
12,420
2021
Number
‘000
16,220
500
1,920
18,640
Expiry
date
Exercise
price
27 Jun 2024
27 Jun 2024
30 Sep 2025
na
na
na
On 20 August 2021 the Company exercised 920,000 incentive performance rights to employees resulting
in the issued of 920,000 ordinary shares.
On the 27 September 2021, 3,800,000 incentive performance rights expired and on the 20 August 2021 a
further 1,500,000 incentive performance rights expired.
Note 17: Reserves
Equity reserve
Financial assets revaluation reserve
Option reserve
Share-based payment reserve
Foreign currency translation reserve
2022
USD’000
7,552
(956)
1,473
3,928
(5,451)
6,546
2021
USD’000
7,552
-
586
3,744
(4,089)
7,793
(a)
(b)
(c)
(d)
(e)
The equity reserve recognises the value of share-based payments made on the transfer of shares
to BEE entities and includes the equity portion of related party loan not extended on market related
terms.
The financial assets revaluation reserve recognises the carrying value of the financial assets
through Other Comprehensive Income at reporting date.
The option reserve represents the equity component (conversion rights) of the convertible notes
issued and fair value of share options recognised as equity financial instruments.
The share-based payment reserve is used to recognise the value of options and performance rights
granted.
The foreign currency translation reserve records exchange differences arising on translation of
financial statements of foreign controlled entities.
Note 18: Capital Commitments
Exploration
The Consolidated Entity has certain obligations to perform work in accordance with work programmes, as
approved by the relevant statutory body, when the permits are granted. These work programmes may be
varied or renegotiated or reduced by farm-out, sale, reduction of tenement area and/or relinquishment.
Note 19: Contingent Liability
There is no contingent liability as at 30 June 2022 (30 June 2021: nil).
2022 Annual Report
80
8 0
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Note 20: Operating Segments
Segment Information
The Consolidated Entity’s operations are located in Australia where it has its corporate office and in South
Africa where it is involved in gold exploration.
The gold exploration activity is conducted through a subsidiary, Transvaal Gold Mining Estates Limited
(TGME). The entire gold project is centred around the TGME processing plant and accordingly it has only
one operating segment.
Note 21: Cash Flow Reconciliation
2022
USD’000
2021
USD’000
a. Reconciliation of Cash Flow used in Operating
Activities with Loss for the Year
Loss from ordinary activities after income tax
(7,636)
(4,365)
Impairment
Depreciation
Rehabilitation provision
Finance costs
Interest income
Share-based payment
Gain on sale of assets
Unrealised exchange (gain)/loss
Changes in assets and liabilities
(Increase) / Decrease in accounts receivable
(Decrease) / Increase in provisions
Decrease in trade creditors and accruals
782
78
361
1,660
(59)
189
(20)
166
(4,460)
43
(114)
(142)
(213)
-
32
(337)
917
(62)
141
(51)
(235)
(3,958)
(17)
10
48
(41)
Net cash flow used in operating activities
(4,673)
(4,013)
Note 22: Related Party Transactions
Parent entity
Theta Gold Mines Limited is the parent entity of the group.
Subsidiaries
Interests in subsidiaries are set out in Note 24.
2022 Annual Report
81
8 1
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Transactions with related parties
Theta Gold Mines Limited
Transactions with related parties are on normal commercial terms and conditions, except for the loan from
Australian Private Capital Investment Group (International) Ltd for $2,805,200 (A$4,000,000) (30 June
2021: $3,002,400 (A$4,000,0000) plus accrued interest of $4,653,553 (A$6,753,088) (30 June 2021:
$4,059,530 (USD: A$5,408,380)) and an interest expense of $975,536 (A$1,344,709) (30 June 2021:
$916,497 (A$1,221,854)) (refer Note 14(b)).
Director and director-related entities
N/A
Key management personnel
Remuneration of key management personnel are disclosed in Note 4 and the Remuneration Report.
Note 23: Financial Instruments
a. Financial Risk Management Policies
The Consolidated Entity’s financial instruments consist mainly of deposits with banks, bank overdrafts,
short-term investments, accounts receivable and payable, loans to and from related parties and leases.
(i) Treasury Risk Management
The Consolidated Entity’s overall risk management strategy seeks to assist the Consolidated Entity in
meeting its financial targets, whilst minimizing potential adverse effects on financial performance.
(ii) Capital management
The primary objective of the Consolidated Entity’s capital management is to ensure that it is able to
continue as a going concern and able to meet its debts as and when they become due and payable. It
aims to maintain an optimal capital structure to reduce the cost of capital.
(iii) Sensitivity Analysis
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in the overall performance of financial market prices. Market risk comprises three types of risk:
•
•
•
interest rate risk;
currency risk; and
other price risk, such as equity price risk.
Financial instruments affected by market risk include deposits and debt, and equity investments.
2022 Annual Report
82
8 2
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Interest rate risk
Theta Gold Mines Limited
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in financial market interest rates. The Consolidated Entity’s exposure to the risk of changes in
market interest rates relates primarily to the Entity’s cash as well as its investment in listed and unlisted
equities. The risk that changes in interest rates may have an adverse impact on the capital value or income of a
security.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign exchange rates. The Consolidated Entity’s exposure to the risk of changes in foreign
exchange rates relates primarily to the Entity’s operating activities (when revenue or expense is denominated in
a foreign currency) as well as its investment in listed and unlisted equities.
Some securities held may be denominated in a currency different to Australian Dollars. A change in the value of
these currencies relative to the Australian dollar can affect the value of the securities held by the Consolidated
Entity.
The Consolidated Entity does not have a defined policy on foreign currency derivatives; however, the Board
assesses the risk of individual transactions as they arise for the requirement to use currency derivative
instruments.
Equity price risk
The Consolidated Entity’s listed and non-listed equity investments are susceptible to market price risk arising
from uncertainties about future values of the investment securities. The Consolidated Entity manages the equity
price risk through diversification and by placing limits on individual and total equity instruments. Reports on the
equity investments are submitted to the Consolidated Entity’s Board of Directors on a regular basis. The
Company’s Board of Directors reviews and approves all equity investment decisions.
At the reporting date, the Consolidated Entity’s held $846,000 (2021:nil) in listed equity investments. It’s
exposure to non-listed equity and at fair value were $482,000 (2021: $525,000).
Given that the changes in fair values of the equity and certain unlisted investments held are strongly positively
correlated with changes to the variables such as ASX market index, the broader financial markets and the
underlying assets held by the listed equities, the Consolidated Entity has determined that an increase/
(decrease) of 10% in these market variables could have an impact of approximately $133,000 (2021: $53,000)
increase/ (decrease) on the income and equity attributable to the Entity.
Interest Rate Risk and Foreign Currency Risk
The Consolidated Entity has performed sensitivity analysis relating to its exposure to interest rate risk and
foreign currency risk at the reporting date. This sensitivity analysis demonstrates the effect on the current year
results and equity which could result from a change in these risks.
Interest Rate Sensitivity Analysis
The Consolidated Entity’s exposure to change in interest rates relates primarily to interest bearing borrowings.
Borrowings issued at a variable rate expose the Consolidated Entity to interest rate risk.
The Consolidated Entity’s variable interest-bearing financial liabilities outstanding at year-end totalled $161,363
(2021:$164,000). An increase/decrease in interest rates of 2% would have an adverse/favourable effect on
loss before tax of $3,093 (2021: $2,960) per annum. The percentage change is based on the potential volatility
of interest rates.
2022 Annual Report
83
8 3
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Foreign Currency Risk Sensitivity Analysis
Theta Gold Mines Limited
The Consolidated Entity undertakes transactions denominated in foreign currencies, hence exposures to
exchange rate fluctuations arise.
At year end the Consolidated Entity was exposed to currency fluctuations between the presentation currency,
being US Dollars (USD) and Australian Dollars (AUD) and South African Rand (ZAR). Exchange rate
exposures are managed within approved internal policy parameters.
The carrying amounts of the Consolidated Entity’s foreign currency denominated monetary assets and
monetary liabilities at the end of the reporting period are as follows –
Assets
2022
2021
South African Rand (US dollar equivalent)
Cash
Receivables
Other receivables
Australian Dollar (US dollar equivalent)
Cash
Receivables
Financial Assets
29
85
1,427
1,541
(7)
102
1,328
1,423
14
95
1,563
1,672
186
127
527
840
Liabilities
2022
2021
South African Rand (US dollar equivalent)
Trade and other Payables
Provisions
Borrowings
Australian Dollar (US dollar equivalent)
Trade and other Payables
Provisions
Borrowings
269
2,366
74
2,709
478
17
11,832
12,327
266
2,311
163
2,740
686
81
7,175
7,942
Based on the financial instruments held, the Consolidated Entity’s total equity would have been USD
613,189 higher / lower (2021: USD 665,731 higher / lower) with a 10% increase / decrease in the US Dollar
against the South African Rand and Australian Dollar.
2022 Annual Report
84
8 4
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
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8 5
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
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8 6
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
(ii) Fair value measurements
This note provides information about how the Consolidated Entity determines fair values of various financial assets
and financial liabilities.
Fair value of the Consolidated Entity's financial assets and financial liabilities that are measured at fair value on a
recurring basis
Some of the Consolidated Entity’s financial assets and financial liabilities are measured at fair value at the end of
each reporting period. The following table gives information about how the fair values of these financial assets
and financial liabilities are determined (in particular, the valuation technique(s) and inputs used).
Financial Asset
Fair value at
(USD’000)
Fair value
hierarchy
Valuation
technique(s) and key
input(s)
2022
2021
Bullion Asset Management¹
Focus Minerals Limited²
482
846
525
-
Level 3
Level 1
Total
1,328
1. Bullion Asset Management is classified as unquoted equity shares in an unlisted company.
2. Focus Minerals Limited is classified as quoted equity shares in a listed company stock code ASX:FML.
525
Market price of
securities based on
recent cash settled
transactions with third
parties.
The Consolidated entity uses the following hierarchy for determining the fair value of a financial asset or liability:
• Level 1 – the fair value is calculated using quoted prices in active markets.
• Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable
for the asset or liability, either directly (as prices) or indirectly (derived from prices). The Group's interest bearing
loans and borrowings and derivative instruments including forward exchange contracts fall within Level 2 of the
hierarchy.
• Level 3 - if one or more of the significant inputs are not based on observable market data, the instrument is
included in Level 3. This is the case for unlisted equity instruments.
Fair value of financial assets and financial liabilities that are not measured at fair value
The directors consider that the carrying amounts of all other financial assets and financial liabilities recognised in
the consolidated financial statements approximate their fair values.
Note 24: Parent Entity Information
The accounting policies of the parent entity, which have been applied in determining the financial information
shown below, are the same as those applied in the consolidated financial statements except as set out below.
Refer to Note 2 for a summary of the significant accounting policies relating to the Consolidated Entity.
2022 Annual Report
87
8 7
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Set out below is the supplementary information about the parent entity, Theta Gold Mines Limited.
Statement of profit or loss and other comprehensive income
Parent
2022
USD’000
2021
USD’000
Loss after income tax
(2,268)
(6,308)
Statement of financial position
Assets
Total current assets
Total non-current assets
Total assets
Liabilities
Total current liabilities
Total non-current liabilities
Total liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Parent
2022
USD’000
2021
USD’000
925
573
1,498
7,891
4,125
12,016
313
624
937
7,942
-
7,942
107,851
4,122
(122,491)
(10,518)
112,275
4,379
(123,659)
(7,005)
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2022 (2021: Nil).
Capital commitments
The parent entity had no capital commitments as at 30 June 2022 (2021: Nil).
Significant accounting policies
Investments in subsidiaries are recorded at cost, less any impairment adjustments. Except for the
foregoing, the accounting policies of the parent entity are consistent with those of the Consolidated
Entity, as disclosed in Note 2.
2022 Annual Report
88
8 8
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
No deferred tax asset has been recognised as it is currently not probable that future taxable profits will be available
to realize the asset in the foreseeable future. Potential deferred tax assets on carry forward losses are shown
Theta Gold Mines Limited
above.
Note 26: Events after Balance Date
Funding:
Subsequent to balance date, the Company issued 35,384,615 fully-paid ordinary shares at an issue price of
A$0.065 per share, raising a total of A$2,300,000 (USD 1,600,000) before cost14.
The Company also issued 20,000,000 unlisted call options to 2Invest AG who are substantial shareholders15 in
the Company in return for non-exclusive advisory services in connection with identifying potential development
funding investors for its TGME Underground Gold Mine Project. The options have an exercise price of $0.12 and
will expire on 31 December 2023.16
Operations:
In addition, the Company released its Definitive Feasibility Study on 27 July 202217 for the TGME Underground
Gold Mine Project. The Feasibility Study (‘FS’) presents a clear pathway to production via the re-development
of TGME’s gold assets within South Africa’s renowned gold mining regions, with a forecast total Life of Mine
(LOM) production of 1.24 Moz’s of contained gold. Economics of the project are extremely strong delivering an
NPV10% of A$432 million applying a gold price of A$2,189 /Oz and an AISC of A$1,112 / oz. LOM is 12.9 years
using a free-milling stand-alone processing plant that will produce dore gold bars on site from between 80 to
100koz p.a at 5.18 g/t and a gold recovery rate of 87.1%.
On 6 September 202218 the Company announced it has received approvals for two project-critical regulatory
licences for the development of its TGME Underground Gold Mine.
1. Atmospheric Emissions Licence issued for the operations of the processing plant, and
2. State Forest Licence issued for Frankfort Mine.
The successful approvals are the by-project of an extensive period of engagement with domestic regulators, which
required the Company to satisfy a broad range of criteria to meet the standards set out by government
departments at the federal level.
Debt Advisors
The Company announced in July 2022 following the successful release of its DFS that it had engaged debt
advisors to complete a TGME Project Information Memorandum and banking model to discuss with potential debt
funding transactions with numerous project financiers and institutions for the peak capital requirements of the
project of A$103 million. The Company expects non-binding initial offers and term-sheets in the coming months
and will update the market with results of that process
14 Refer to ASX Announcement dated 3 August 2022, “Share Placement and Funding”
15 Refer to ASX Announcement dated 12 August 2022, “Form 603 initial substantial holder notice”
16 Refer to ASX Announcement dated 7 September 2022, “Issue of New Call Options to 2Invest AG”
17 Refer to ASX Announcement dated 27 July 2022, “Theta’s TGME Project Definitive FS Confirms NPV10% of A$432 million at
US$1,642/oz Gold Price
18 Refer to ASX Announcement dated 6 September 2022, “Two Approvals Granted for The TGME Underground Gold Project”
90
8 9
2022 Annual Report
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
The consolidated financial statements incorporate the assets, liabilities and results of Theta Gold Mines
Limited and the following subsidiaries in accordance with the accounting policy described in Note 2:
Theta Gold Mines Limited
Equity holding
Name of entity
Theta Gold SA (Pty) Ltd (formerly Stonewall
Mining (Proprietary) Limited)
and its subsidiaries -
- Transvaal Gold Mines Estates Limited*
- Sabie Mines (Proprietary) Limited*
- Vanaxe Share Block Pty Ltd (subsidiary
of Sabie Mines (Proprietary) Limited)
- TGME Exploration Company 1 (Pty) Ltd
- TGME Exploration Company 2 (Pty) Ltd
Country of
incorporation
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
2022
%
100
74
74
74
100
100
2021
%
100
74
74
74
100
100
* Theta Gold SA (Pty) Ltd (formerly Stonewall Mining (Proprietary) Ltd) entered into a share sale
agreement with TGME Empowerment Company Proprietary Limited (TGME SPV) dated 11 June 2012
in terms of which it sold 330,234 shares in TGME (26% of the shares) to the TGME SPV for a nominal
amount. Thus one share was issued by TGME to the TGME SPV on 30 October 2012. This is
consolidated into TGME as TGME controls the SPV.
Theta Gold SA (Pty) Ltd entered into a share sale agreement with African Sun Empowerment Company
Proprietary Limited (Sabie SPV) dated 11 June 2012 in terms of which it sold 40,299 shares in Sabie
(26% of the shares) to the Sabie SPV for a nominal amount. Thus one share was issued by Sabie to the
Sabie SPV on 30 October 2012. This is consolidated into Sabie as Sabie controls the SPV.
The nature of the BEE arrangement is such that the trustees of the trusts that collectively own 100% of
the shares of TGME SPV, and Sabie SPV, which in turn owns 26% of TGME and Sabie Mines Pty Limited
respectively, do not have control of the trusts. Under the terms of the BEE arrangements, these trustees
must operate within a framework established and controlled by Theta Gold SA Pty Limited. The shares
held by the trust are therefore treated as treasury shares. The dividends or distributions to the trust are
utilised by the trustees for predetermined purposes to benefit local communities and are presented as
expenses at the consolidated level. Accordingly, no non-controlling interests are recognised.
Note 25: Income tax expense
Loss before income tax expense
Prima facie (tax benefit) / expense on loss from ordinary
activities before income tax at 27.5% (2021: 27.5%)
Effect of expenses that are not deductible in determining
taxable income
Effect of different tax rates of group entities operating in different
jurisdictions
Effect of temporary differences and / or tax losses not recognised
Income tax expense recognised in profit or loss
2022
USD’000
2021
USD’000
(7,636)
(4,365)
(2,100)
(1,200)
2,286
(41)
(145)
-
1,540
(27)
(313)
-
Unrecognised deferred tax balances
Unused tax losses for which no deferred tax asset has been
recognised
34,680
30,887
2022 Annual Report
89
9 0
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Independent auditor's report to the members of Theta Gold Mines
Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Theta Gold Mines Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30 June
2022, the consolidated statement of profit or loss and other comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flows for the year then ended, notes
to the financial statements, including a summary of significant accounting policies, and the directors'
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2022 and
of its consolidated financial performance for the year ended on that date; and
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial report
section of our report. We are independent of the Group in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional
and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including
Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We
have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report, which describes the principal conditions that raise
doubts about the entity’s ability to continue as a going concern. These events or conditions indicate that a
material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
9 1
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
2
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial report of the current year. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate
opinion on these matters. In addition to the matter described in the Material Uncertainty Related to Going
Concern section, we have determined the matters described below to be the key audit matter to be
communicated in our report. For each matter below, our description of how our audit addressed the
matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial
report section of our report, including in relation to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material misstatement
of the financial report. The results of our audit procedures, including the procedures performed to
address the matters below, provide the basis for our audit opinion on the accompanying financial report.
Carrying value of Exploration and Evaluation Assets
Why significant
How our audit addressed the key audit matter
Capitalised exploration and evaluation assets are
the Group’s most significant asset. Exploration
assets are initially recognised at cost and any
additional expenditure is capitalised to the
exploration asset in accordance with the Group’s
accounting policy as outlined in Note 2(g).
At each reporting date the Directors assess the
Group’s exploration assets for indicators of
impairment. The decision as to whether there are
indicators that require the Group’s exploration
assets to be assessed for impairment in
accordance with AASB 6 involved judgment,
including the Group’s ability and intention to
continue to evaluate and develop the area of
interest and whether the results of the Group’s
exploration and evaluation work to date are
sufficiently progressed for a decision to be made
as to the commercial viability or otherwise of the
area of interest.
Due to the value of the exploration and evaluation
asset and the subjectivity involved in assessing
indicators of impairment, we considered this to be
a key audit matter.
Our procedures to address the Group’s assessment
of the carrying value of exploration and evaluation
assets included:
Considered the Group’s right to explore in the
relevant exploration area, which included
obtaining and assessing supporting
documentation such as license agreements.
Considered the Group’s intention to carry out
significant exploration and evaluation activity
in the relevant areas of interest, which
included an assessment of the Group’s cash-
flow forecast models, discussions with senior
management and Directors as to the intentions
and strategy of the Group.
Agreed a sample of costs capitalised for the
period to supporting documentation and
considering whether these costs met the
requirements of Australian Accounting
Standards and the Group’s accounting policy.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
9 2
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
3
Refer to Note 1 (iv), Critical Accounting Estimates
and Judgements, Note 2 (g) Exploration and
evaluation expenditure and Note 11 Exploration
Expenditure to the financial statements for the
amounts held on the balance sheet by the Group
as at 30 June 2022 and related disclosure.
Assessed whether the methodology used by
the Group to identify indicators of impairment
met the requirements of Australian Accounting
Standards and whether the results of the
Group’s exploration and evaluation work to
date indicate the commercial viability or
otherwise of the area of interest.
Evaluated the adequacy of the related
disclosures in the financial report.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the information
included in the Company’s 2022 Annual Report, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report and
our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
9 3
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
4
Auditor's responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
•
•
•
•
•
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as
a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
9 4
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
5
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate
threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors' report for the year ended 30 June
2022.
In our opinion, the Remuneration Report of Theta Gold Mines Limited for the year ended 30 June 2022,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Ernst & Young
Scott Jarrett
Partner
Sydney
30 September 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
9 5
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Shareholders Information
as at 15th September 2022
1.
Issued securities
Ordinary shares
(ASX: TGM)
Unlisted Options
Performance
rights
586,802,952
48,011,433
12,420,000
Number on
issue
2. Distribution of Shareholders
Holdings Ranges
Holders
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 +
Totals
226
323
170
349
160
1,228
3. Substantial Shareholders
Total Units
112,091
1,037,881
1,364,521
13,016,533
571,271,926
586,802,952
%
0.02%
0.18%
0.23%
2.22%
97.35%
100.00%
The substantial shareholders in the Company based on substantial holding notices received by the
Company are –
Name
Number of shares
%
BNP Paribas Nominees Pty Ltd
85,768,786
14.62
Zenith (HK) Holding Limited
2Invest AG
Tasman Funds Management Pty Ltd
Golden Asia Investment Group Limited
46,645,701
36,825,092
32,730,995
31,127,805
7.95
6.28
5.58
5.31
4. Non-Marketable Parcels
A non-marketable parcel is a shareholding with a market value of less than $500. There were 605
shareholders with non-marketable parcels.
5. On-Market Buy-back
There is no current on-market buy-back.
6. Voluntary Escrow
Class
Ordinary shares
Number of shares
Expiry date
-
-
2022 Annual Report
96
9 6
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
7. Top 20 shareholders
Holder Name
BNP Paribas Nominees Pty Ltd
Zenith (HK) Holding Limited
Citicorp Nominees Pty Limited
2Invest AG
Tasman Funds Management Ltd
Golden Asia Investment Group Limited
Mr Xinzhou Li
Acuity Capital Investment Management Pty Ltd
BNP Paribas Nominees Pty Ltd ACF Clearstream
High Gift Investments Ltd
Huazhou Li
Best Wealth Winner Limited
BNP Paribas Noms Pty Ltd
Qinglong Fan
Jianping Zhou
Richlink Capital Pty Ltd
R & M Sutton Super Pty Ltd
Monex Boom Securities (HK) Ltd
Khan International Limited
Murray SA Investment Pty Ltd
Total Securities of Top 20 Holdings
Total of Securities
Number of
Ordinary
Shares Held
Percentage
of Total
Issued
Shares
85,768,786
14.62%
46,645,701
42,272,156
36,825,092
32,730,995
31,127,805
24,133,334
24,000,000
23,270,516
23,015,179
20,000,000
19,555,556
7.95%
7.20%
6.28%
5.58%
5.31%
4.11%
4.09%
3.97%
3.92%
3.41%
3.33%
18,167,098
3.1%
9,200,000
8,010,255
7,554,875
7,000,000
6,074,472
5,569,339
1.57%
1.37%
1.29%
1.19%
1.04%
0.95%
5,296,373
0.90%
476,217,532
81.15%
586,811,952
2022 Annual Report
97
9 7
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
Theta Gold Mines Limited
Corporate Directory
DIRECTORS
SHARE REGISTRY
Executive Chairman
Charles William Guy
Non-Executive Directors
Bill Richie Yang
Byron Dumpleton (appointed
10/11/21)
Yang (Simon) Liu
Guyang (Brett) Tang
Boardroom Pty Limited
Grosvenor Place
Level 12, 225 George Street
Sydney NSW 2000
Australia
Tel: 1300 737 760 (within Australia)
+61 2 9290 9600 (outside Australia)
Fax: +61 2 9290 9655
SOLICITORS
Johnson Winter & Slattery
Level 49
152-158 St Georges Terrace,
Perth WA 6000
COMPANY SECRETARY
STOCK EXCHANGE LISTINGS
Brent Hofman (appointed 16/11/21)
ASX: TGM
OTC: TGMGF
PRINCIPAL OFFICE
Suite 80 Level 35 (Servcorp)
International Tower One
100 Barangaroo Avenue
Sydney NSW 2000
Australia
Tel: + 61 2 8046 7584
Email: info@thetagoldmines.com
INVESTOR RELATIONS
Australia: Ben Jarvis, Six Degrees Investor Relations:
+61 (0) 413 150 448
Webpage: www.thetagoldmines.com
https://twitter.com/ThetaGoldMines
https://www.linkedin.com/company/thetagoldmines/
AUDITOR
Ernst & Young
200 George Street
Sydney NSW 2000
Australia
AUSTRALIAN BUSINESS NUMBER
30 131 758 177
2022 Annual Report
98
9 8
ANNUAL REPORT 2022THETA GOLD MINES LIMITED
G O L D M I N E S
9 9
ANNUAL REPORT 2022THETA GOLD MINES LIMITED