Theta Gold Mines : 2021 Q3 Quarterly Activities Report

31 October 2021

ASX ANNOUNCEMENT

QUARTERLY REPORT

1 July to 30 September 2021

Theta Gold Mines Limited ("Theta Gold" or "Company") (ASX: TGM | OTC: TGMGF) is pleased to report on its activities for the period from 1 July to 30 September 2021.

HIGHLIGHTS

DURING THE QUARTER - Q1 FY 2022

• Extensive underground sampling program underway
• Data acquired is to be applied to Definitive Feasibility Study (DFS) which is progressing to plan
• On 7 September Minxcon was appointed as the Mine design engineer for the TGME underground project with expected DFS completion for Beta, Frankfort, CDM and Rietfontein by the First quarter of 2022

Figure 1: Frankfort underground trial mining drilling

Theta Gold Mines Limited ABN 30 131 758 177

Suite 80, Level 35 (Servcorp), International Tower One, 100 Barangaroo Avenue, Sydney NSW 2000

Tel: [phone] Email: [e-mail]

www.thetagoldmines.com

POST QUARTER - OCTOBER 2021

• Trial mining commences at Frankfort Gold Mine
• Minister of Forestry, Fisheries and the Environment has declared a forest nature reserve over, amongst other properties, a portion of Theta's MR83 mining right areas.

SUMMARY

Theta Gold Mines Limited ("Theta Gold" or "Company") (ASX: TGM |OTC: TGMGF) is pleased to confirm that trial mining is now advancing at the Frankfort underground gold mine, with the results from this program being instrumental for determining and optimising the selected mining and blasting method. The results of this programme will be used to finalise the Underground Definitive Feasibility Study (DFS). The DFS which includes the first three mines (Frankfurt, CDM and Beta) the company aims to put into production, is expected to be completed in Q1 2022. Theta expects to make updates on progress prior to completion.

The Frankfort Mine site, where trial mining is now underway, is located approximately 30km north of the closed TGME gold plant. Modern underground mining methods and technologies will be used to enable refinement of the long-hole open stoping mining methods. The initial drill holes are being drilled with a Boart Longyear S36 Drill. A reputable explosives supplier is participating in the trials of pumpable emulsion explosives. The trial mining data, including drill hole size, drill pattern, and explosive charge rate will inform the DFS and provide proof of concept. The trial mining at Frankfort mine is also representative of the same mining method to be applied at Beta and CDM mines.

Extensive underground sampling is also underway to assess the Beta South Mine ore body and other potential zones of mineralisation. These results will be instrumental in Theta upgrading its Mineral Resource Estimate (MRE).

Figure 2: Frankfort underground drill rig being installed

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The on-site focus will be on mine pre-development and resource upgrading work that is expected to be completed within the next 6 months. The availability of additional funding will enable the progress of phase 1 underground project that includes Beta, CDM, Frankfort and Rietfontein Mines. Minxcon has been appointed as the Mine design engineer for the phase 1 underground project with a DFS for these three mines expected to be completed by Q1 2022. The inclusion of the Rietfontein Mine into the DFS will give this mine its first Mine Reserve and lead to an updated Resource Statement.

COMMENT

Theta Chairman Mr Bill Guy stated: "Commencing trial mining is a critical milestone for Theta and is instrumental in the development of a sustainable and profitable underground mining operation for which we are permitted at the Frankfort Mine. Importantly, results from the trial mining program will clearly demonstrate that the narrow gold reef system that was previously mined by hand in the early 20th century can now be mined cost effectively using modern mining techniques. Having experienced local people and modern machinery at work in the underground section of this project is a rewarding development for Theta's team and we are confident it will add significant value for our shareholders. We will share a number of videos of the team in action via the Theta Twitter and website so that investors can follow progress. The trial mining results are a key component of the underground DFS which is advancing to plan. As well, the extensive underground sampling program that is underway is expected to deliver an increase in the size and quality of our mineral resource estimate."

OPERATIONS

Trial Mining

In September 2021, the Board authorised management to commence trial mining at Frankfort. In order to commence with the trial mining programme, the closed Frankfort Gold mine was selected as it has the necessary permits in place and offers easy access to the reef through an extensive network of underground tunnels and developments adits. The upfront site work required for mining, such as making safe and installing necessary stope support and lighting was completed timeously and has resulted in trail mining commencing.

Figure 3: Gold reefs being Mark up to for trail mining

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Due to the long lead time for delivery of the Sandvik Longhole DL230L drill rig, the Company acquired a modified S36 machine (see Figures 2 & 3). This machine will be able to drill the desired holes and, most importantly, the acquisition prevented operational and potential delays to the DFS. Holes of varying depths (up to 22 meters), and spacing of 0.6m, will be drilled to determine an effective drilling depth and diameter. This will allow the Theta team to determine a drilling pattern and mining layout that gives optimum fragmentation of the ore and allowing for effective use of explosives, support, labour, and other consumables. The drilling rig is operated by trained and skilled operators.

Figure 4: Underground haul way clean up at Frankfort Mine

Several explosives suppliers provided proposals for the mining trial. Following an analysis of the proposals, with particular regard to the compatibility of their explosives and accessories for the specifics of the site, Enaexe (formerly SASOL explosives) were chosen as the preferred provider. Theta team's selection was primarily based on the availability of the products, the equipment that would be required and the willingness of Enaexe to partner with Theta during the trial mining period.

Underground Sampling

Several investigations into the Beta South Mine have also been undertaken to determine the extent of historical mining, as well as the condition of the underground working places. Pleasingly, the working places are mostly accessible and well supported. Some areas, however, will need to be re-supported to ensure safety. An extensive sampling exercise will be undertaken in the coming weeks to sample the historic pre-developed underground workings. With more than 250 sampling points identified from the historical mine plans, the sampling program will consist of a 12 meter spaced sampling grid, cut into the rock with representative samples taken from the reef. The collected samples will be processed and analysed at SGS laboratories.

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Figure 5: Underground sampling crew reviewing mine plans for Beta South Mine Complex

Definitive Feasibility Update

The definitive feasibility study for the phase 1 underground project is progressing very well and is planned for completion during Q1 2022. Results from the trial mining and further metallurgical test work will be incorporated, as well as more accurate costs and detailed mine, ventilation, metallurgical plant, tailings and surface infrastructure designs.

Concurrently, the Rietfontein mine pre-feasibility study is also making good progress. It is expected to add to the company's Reserve statement in the short term and will be progressed to a definitive level in early 2022. The current mine planning utilises a 2.1g/t cut-off grade (Figure 6).

Figure 6: Mine Planning - Rietfontein's mining designs and layouts are currently being designed at a cutoff grade of 2.1g/t

Making Safe

A rock engineer was engaged to give input with regards to the support design and the integrity of the existing support units in the underground workings and the main roadway into the Frankfort Mine. Support units that were found to be damaged or structurally compromised are currently in the process of being removed and replaced. Areas were identified in the main roadway, specifically at intersections

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