Theta Gold Mines has signed a memorandum of understanding (MOU) with Yellow River (YRC), a Power Construction Corporation of China (PowerChina) unit, for the construction of the first phase of its TGME project in Mpumalanga Province, South Africa.  

The agreement includes the development of a tailings storage facility and wastewater dams.

It outlines the construction of Theta's stage-one TGME Gold Plant, which is estimated to have a 45 kilotonnes-per-month capacity for run-of-mine processing.

The parties plan to sign a formal engineering, procurement and construction (EPC) contract by the second quarter of 2024. This contract is expected to be valued at $30m.

Yellow River will receive a fixed margin on the EPC contract, in addition to a completion incentive.

The progression of the EPC contract is contingent upon Theta Gold securing the necessary funding for the upfront payments agreed upon between the parties.

The initial due diligence phase is already under way, covering general resources, metallurgy and legal aspects, with negotiations for key subcontractors initiated.

Theta Gold chairman Bill Guy said: “YRC recently set up operations in Johannesburg to build a South African base for both power and mining projects.”

Theta Gold chief operations officer Jacques Du Triou said: "Since initial engagement back in November 2023, our team already completed four site trips with YRC's senior management and ground staff having established a very solid working relationship.

“Together we are working very quickly towards the EPC contract including for design optimisations as well as preparing for subcontractor tenders.”

The TGME gold project has more than 43 historical mines identified across the goldfield of 620km².

Theta Gold Mines owns a 74% stake in the TGME project company while the remaining interest is owned by Black Economic Empowerment entities.