- Gold development company Theta Gold Mines (TGM) has frozen its shares until Friday as it irons out the details of an upcoming capital raise
- The company recently completed a $930,000 share placement in April to bolster its balance sheet
- However, with expected quarterly cash flows of roughly $1.6 million per quarter and just $425,000 in the bank at the end of March, the April top-up was not expected to last long
- Theta remains confident its recent feasibility study at its flagship project in South Africa is enough to hold investor interest and underpin future fundraising
- Details of the placement are set the be revealed at the end of the week, with shareholders able to do little other than speculate until then
- Theta shares last closed at the three-year high of 31 cents each on Friday afternoon
Gold development company Theta Gold Mines (TGM) has frozen its shares until Friday as it irons out the details of an upcoming capital raise.
The nature of the capital raise and what the new cash will go towards has not yet been revealed.
Of course, taking a look at Theta’s most recent quarterly report, a bolstering of the company’s balance sheet likely comes as no surprise to shareholders. Over the March quarter, Theta spent just over US$1.1 million (roughly A$1.6 million) but had next-to-no relevant cash inflows. With just US$295,000 (roughly A$425,000) in the bank at the end of March, Theta completed a $930,000 capital raise in late April to support operating expenses.
If spending had remained at similar levels since March, however, the April top-up would have been burned through in just one quarter.
Theta is restarting gold mining in the historic East Transvaal Goldfields region in South Africa’s Witwatersrand Basin. This is the area that thrust South Africa into the spotlight as the world’s gold hotspot throughout the 1900s, but according to Theta, large sections of the area remain underexplored with modern technology.
The company said in April its flagship Theta Project feasibility study will underpin its ability to raise future funds for business needs. Investors reaffirmed this idea when the April placement received strong support, despite a marginal discount.
As such, the upcoming raise could be a further test of investor trust. Details of the raise are set to be announced on Friday, until which point shareholders can do little other than speculate.
Theta shares last closed at a three-year high of 31 cents each last Friday. The company has a $136.91 million market cap.