TGM: Commencement of dispatch of Offers

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18 January 2022

ASX ANNOUNCEMENT

COMMENCEMENT OF DISPATCH OF REPLACEMENT BIDDER'S STATEMENT AND OFFERS

Theta Gold Mines Limited (Theta Gold, TGM or Company) (ASX: TGM | OTCQB: TGMGF | FSE: 3LM) refers to its replacement bidder's statement dated 4 January 2022 (Replacement Bidder's Statement) and offers in relation to its off-market takeover bid for all of the shares in Focus Minerals Ltd (ACN 005 470 799) as at the Register Date stated in the Replacement Bidder's Statement.

TGM is pleased to advise that it has commenced dispatch of the Replacement Bidder's Statement and offers (for all of the shares in Focus Minerals Ltd as at the Register Date stated in the Replacement Bidder's Statement). The Replacement Bidder's Statement is accompanied by a copy of TGM's second supplementary bidder's statement dated 18 January 2022.

TGM's offer is dated 18 January 2022 and is scheduled to close at 7.00pm (Sydney Time) on 21 February 2022 (unless extended or withdrawn).

Copies of the Replacement Bidder's Statement and second supplementary bidder's statement (as sent) are attached, including for the purposes of paragraph 5 of ASIC Class Order [CO 13/521].

This announcement was authorised for release by Mr Bill Guy, Chairman.

For more information:

Bill Guy, Chairman

Theta Gold Mines Limited

1. + 61 2 8046 7584 E: [e-mail]

Webpage: www.thetagoldmines.com

https://twitter.com/ThetaGoldMines

https://www.linkedin.com/company/thetagoldmines/

ABOUT THETA GOLD MINES LIMITED

Theta Gold Mines Limited (ASX: TGM | OTCQB: TGMGF | FSE: 3LM) is a gold development company that holds a range of prospective gold assets in a world-renowned South African gold mining region. These assets include several surface and near-surfacehigh-grade gold projects which provide cost advantages relative to other gold producers in the region.

Theta Gold's core project is located next to the historical gold mining town of Pilgrim's Rest, in Mpumalanga Province, some 370km northeast of Johannesburg by road or 95km north of Nelspruit (Capital City of Mpumalanga Province). Following small scale production from 2011

- 2015, the Company is currently focussing on the construction of a new gold processing plant

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within its approved footprint at the TGME plant, and for the processing of the initial ore reserves.

The Company aims to build a solid production platform to over 160kozpa based primarily around shallow, open-pit or adit-entry shallow underground hard rock mining sources. Theta Gold has access to over 43 historical mines and prospect areas that can be accessed and explored, with over 6.7Moz of historical production recorded.

Theta Gold holds 100% issued capital of its South African subsidiary, Theta Gold (SA) Pty Ltd ("TGSA"). TGSA holds a 74% shareholding in both Transvaal Gold Mining Estates Limited ("TGME") and Sabie Mines (Pty) Ltd ("Sabie Mines"). The balance of shareholding is held by Black Economic Empowerment ("BEE") entities as part of the country's ESG initiatives. The BEE shareholding in TGME and Sabie Mines is comprised of a combination of local community trusts, an employee trust and a strategic entrepreneurial partner.

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Second Supplementary Bidder's Statement

in respect of the offer for shares in Focus Minerals Ltd

Important Information

This document is the second supplementary bidder's statement (Second Supplementary Bidder's Statement) given by Theta Gold Mines Limited (ABN 30 131 758 177) (TGM) in connection with its takeover offer for all shares in Focus Minerals Ltd (ABN 56 005 470 799) (Focus) that existed on the Register Date of 21 December 2021.

This Second Supplementary Bidder's Statement supplements, and must be read together with, TGM's first supplementary bidder's statement dated 4 January 2022 (First Supplementary Bidder's Statement) and TGM's replacement bidder's statement dated 4 January 2022 (Replacement Bidder's Statement) which replaced TGM's original bidder's statement dated 20 December 2021. This Second Supplementary Bidder's Statement will prevail to the extent of any inconsistency with the First Supplementary Bidder's Statement and Replacement Bidder's Statement.

A copy of this Second Supplementary Bidder's Statement was lodged with the Australian Securities and Investments Commission (ASIC) on 18 January 2022. Neither ASIC nor its officers takes any responsibility for the contents of this Second Supplementary Bidder's Statement.

Unless the context otherwise requires, defined terms used in this Second Supplementary Bidder's Statement have the same meaning as given to them in the Replacement Bidder's Statement. Section 10.2 (References to certain general terms) of the Replacement Bidder's Statement also applies to this Second Supplementary Bidder's Statement.

1. SHANDONG GOLD INTENTION STATEMENTS

In the Replacement Bidder's Statement, TGM made clear that because:

• Focus has proceeded with the Focus Entitlement Offer; and
• TGM's Offer only relates to Focus Shares that existed on the Register Date of 21 December 2021 (so does not extend to new Focus Shares issued under the Focus Entitlement Offer),

TGM would not be able to acquire 100% of Focus Shares under the Offer. The Replacement Bidder's Statement contemplated that TGM may be able to acquire control of Focus under the Offer, but that this would only be possible if Shandong Gold accepted the Offer (in respect of those of its Focus Shares to which the Offer relates) and a large proportion of minority Focus Shareholders also accepted the Offer.

On 5 and 7 January 2022, Focus released ASX announcements which attached statements made by Shandong Gold. In those statements, Shandong Gold has said that "it does not support the Offer and does not intend to accept the Offer in its current form in respect of any Focus shares that Shandong Gold owns or controls".

On the basis of these statements, TGM will not be able to acquire control of Focus under the Offer in its current form. In these circumstances (that Shandong Gold does not accept the Offer in respect of those of its Focus Shares to which the Offer relates), the maximum interest that TGM could acquire in Focus as a result of the Offer (in its current form) is 32.65% - as outlined at section 6.3 of the Replacement Bidder's Statement. Focus Shareholders should bear this in mind when considering statements in the Replacement Bidder's Statement that relate to the "Controlled Group" or that otherwise clearly contemplate a situation where TGM has acquired control of Focus (including, without limitation, section

5.3 of the Replacement Bidder's Statement which sets out TGM's intentions should it gain control of Focus).

TGM notes that, were TGM to improve the terms of its Offer (which TGM reserves the right to do), the statements by Shandong Gold would no longer apply and (if Shandong Gold accepted in respect of

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those of its Focus Shares to which the Offer relates) it would still be possible for TGM to acquire control of Focus in the circumstances contemplated by the Replacement Bidder's Statement.

2. IMPLIED VALUE OF THE OFFER

The Replacement Bidder's Statement:

• notes that TGM believes its Offer represents an attractive premium to the price at which Focus Shares were trading prior to the Announcement Date of the TGM Offer (9 December 2021); and
• clearly states in a number of places that the implied value of the Offer will change as a consequence of changes in the market price of TGM Shares from time to time.

For example, and simply by way of update:

1. as at the close of trade on Thursday 13 January 2022 the Offer implies a value of A$0.34 for each Focus Share (based on the TGM closing price on ASX of $0.17 on Thursday 13 January 2022). This represents premiums of:
2. • 21.4% to the closing price of Focus Shares on ASX of A$0.28 on 13 January 2022;
   • 36% to the Focus Entitlement Offer price of A$0.25;
   • 9.4% to the 30 day VWAP of Focus Shares on ASX of A$0.3109 to 13 January 2022; and
   • 15.5% to the 90 day VWAP of Focus Shares on ASX of A$0.2943 to 13 January 2022.
3. as at the close of trade on Monday 17 January 2022 (the last trading day prior to the date of this Second Supplementary Bidder's Statement) the Offer implies a value of A$0.33 for each Focus Share (based on the TGM closing price on ASX of $0.165 on Monday 17 January 2022). This represents premiums of:
4. • 26.9% to the closing price of Focus Shares on ASX of A$0.26 on 17 January 2022;
   • 32% to the Focus Entitlement Offer price of A$0.25;
   • 4.1% to the 30 day VWAP of Focus Shares on ASX of A$0.3170 to 17 January 2022; and
   • 12.1% to the 90 day VWAP of Focus Shares on ASX of A$0.2944 to 17 January 2022.

As noted in the Replacement Bidder's Statement, these figures will continue to change from time to time as a result of changes in the prices of TGM Shares and Focus Shares on ASX. When assessing the Offer, Focus Shareholders should ensure that they take into account the latest trading price of Focus Shares and the implied price of the Offer based on the latest trading price of TGM Shares.

3. INFORMATION ON TGM

Sections 1 and 2 of the Replacement Bidder's Statement set out information on TGM and TGM's securities. As noted at section 1.7 of the Replacement Bidder's Statement, TGM is a disclosing entity for the purposes of the Corporations Act, and is subject to regular reporting and disclosure obligations. This includes the continuous disclosure of any information that TGM has concerning it that a reasonable person would expect to have a material effect on the price or value of its securities. Such information is readily available publicly and (as noted at section 1.7 of the Bidder's Statement) a number of items will be provided to Focus Shareholders free of charge and upon request to TGM.

Notwithstanding this, Focus has corresponded with TGM querying certain matters relating to TGM. As a result, TGM makes the following additional statements to assist Focus Shareholders notwithstanding that this information is readily available publicly or can be readily ascertained from such information:

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• As noted at section 2.1 of the Replacement Bidder's Statement, TGM has various classes of securities on issue. These include 16,220,000 unlisted performance rights. The performance hurdles, vesting dates and expiry dates of these performance rights are all set out on page 35 of TGM's annual financial report for the year ended 30 June 2021 (released by TGM to ASX on 1 November 2021). The performance hurdles are all project related (with the intention of incentivising performance that benefits TGM and TGM shareholders as a whole). Based on the current number of TGM Shares on issue, vesting of all of these performance rights would dilute existing TGM Shareholders by approximately 3.0%.
• In addition to these performance rights, there are currently 41,169,786 TGM options on issue with expiry dates and exercise prices as specified in section 2.1 of the Replacement Bidder's Statement. These exercise prices are all between A$0.275 and A$0.50. To be exercised, these options will require cash proceeds to be paid by the option holder(s) to TGM in return for the issue of the resultant TGM Shares. Based on the current number of TGM Shares on issue, exercise of all of these options would dilute existing TGM Shareholders by approximately 7.3% but would result in cash proceeds for TGM of approximately $16.16 million.
• TGM has released a Pre-Feasibility Study (PFS) for its TGME Underground Project to ASX on 13 April 2021. This PFS included a capital cost estimate (dated February 2021) for TGM's three underground operations. These capital costs were all developed in South African Rand (ZAR) and converted to USD (TGM's reporting currency) at an exchange rate of ZAR/USD of 15.89. That PFS noted a total capital requirement of US$78.5 million, but that the peak funding requirement is US$37 million (over the first three years of the project) with the remaining capital to be funded from cash flow. The PFS also noted that the TGME Underground Project has a projected EBITDA of $US241.2 million over the life of mine (of 7.67 years), and a net present value of US$91.2 million1. Further to this, TGM has clearly stated in its Replacement Bidder's Statement (see section 1.2) that:
  o TGM is progressing a Definitive Feasibility Study for the TGME Underground Project which is scheduled to be delivered in 20222;
  o TGM is targeting project commissioning (of the TGME Underground Project) in 2023;
  o following finalisation of the Definitive Feasibility Study, TGM will assess the further funding requirements for the commissioning of its TGME Underground Project (it being noted, for completeness, that a Definitive Feasibility Study will have a greater level of certainty than a Pre- Feasibility Study);
  o TGM anticipates that such funding would be by way of a mix of debt and equity (with the proportions yet to be determined); and
  o to the extent that equity capital is required, this will necessarily dilute TGM shareholders (with the level of dilution depending upon the size of the equity issue).
  Equity capital may also be required to be raised by TGM (which will, in turn, dilute TGM Shareholders) in order to meet TGM's obligations under existing financing arrangements (as described in the Replacement Bidder's Statement at section 2.1). This includes, but is not limited

• Subject to the factors and assumptions set out in the PFS, including obtaining the necessary funding to develop the project - see TGM announcement of 13 April 2021, "Pre-Feasibility Study for Initial Underground Projects". See also the "Production Targets and Forecast Financial Information" notice in the "Important Information" section of the Replacement Bidder's Statement on page 2.

• This is expected to be released in Q2 of 2022 - see TGM announcement of 13 January 2022 "Incorporation of the Rietfontein Mine into TGME Underground Mine's Definitive Feasibility Study". As announced on 13 January 2022, TGM proposes to extend the existing PFS to add the Rietfontein Mine to the mine schedule for the PFS (noting that Rietfontein requires validation from metallurgical testwork that is still in progress and is expected in Q2, 2022).

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