Theta Gold Mines : Quarterly Activities and Cash Flow Report 31 December 21

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28 January 2022

ASX ANNOUNCEMENT

QUARTERLY REPORT

1 October to 31 December 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 October to 31 December 2021.

HIGHLIGHTS

DURING THE QUARTER - Q2 FY 2022

• TGM Board strengthened with appointment of Mr Byron Dumpleton as independent non-executive director, and appointment of Mr Bill Guy as Executive Chairman
• Purchased 1,842,436 Focus Minerals (ASX: FML) shares on-market
• Launched an off-market takeover bid for gold-peer Focus Minerals
• Subscribed for 1,343,395 Focus Mineral (ASX: FMLNA) shares through the Focus Minerals Entitlement Offer
• Trial mining successfully completed for the TGME underground project
• Underground sampling continues on site
• TGME underground project permitting progress:
  o Negotiation with Ministry of Forestry, Fisheries and Environment (DFFE) underway for continued mining under newly declared Forest Nature Reserve
  o Draft scoping report for TGME underground project submitted for public review on 6 December 2021
• Definitive Feasibility Study (DFS) progressing to plan for TGME Underground Project.

POST QUARTER

• TGME underground project strengthened with addition of Rietfontein mine in updated prefeasibility study:
  o Rietfontein ore grade determined from sampling at approximately 6.82g/t Au o 293 koz gold comprising 107 koz Indicated Resources and 186 koz delivered
  Inferred Resources
  o LoM of approximately 7.6 years at 180ktpa production rate

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

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(See ASX release 13 Jan 2022- INCORPORATION OF THE RIETFONTEIN MINE INTO TGME UNDERGROUND MINE'S DEFINITIVE FEASIBILITY STUDY, resources reported on a 100% Project basis - Theta owns 74%)

• Completion of 2021 Annual General Meeting

Theta Chairman Mr Bill Guy stated: "Theta launched an off-Market bid for peer gold developer Focus

Minerals Limited (ASX: FML). The board believes if a significant shareholding can be gained in FML, it will give Theta shareholders exposure to premium preproduction assets in Western Australia. If successful, this process will increase the number of shareholders on the Theta share register and increase Theta's exposure to quality gold ounces.

The completion of the trial mining at Frankfort and the Rietfontein PFS post quarter were important milestones for the company. The trial mining was proof of concept for the mining method. The Rietfontein PFS has added 293 koz of potential gold to mine inventory. The Rietfontein Mine will be added to DFS for the TMGE Underground Project which has been in progress for many months and expect to be completed in Q2 2022."

OPERATIONS UPDATE SUMMARY

Trial mining successfully completed for the TGME underground project

Trial Mining at Frankfort mine was successfully completed during the quarter. The results from the trial mining will inform mining planned methods at Beta, Frankfort, and CDM mines, collectively referred to as TGME Underground (UG) Project. Trial Mining was completed to demonstrate that the mechanized long hole stoping mining method was suitable to mine the narrow gold reef system (0.60-6.0m) and to inform the Definitive Feasibility Study ("DFS") for the TGME Underground Project currently in progress.

• Trial Mining confirms that longhole mechanised mining and 15m long mining panels are suitable to mine the narrow gold reef system (0.60-6.0m) present across TGME gold fields
• This is a major milestone for Theta and a critical de-risking event
• Trial Mining demonstrated a cost reduction with the redesign of the drilling and blasting systems to achieve optimal fragmentation and to minimise the use of explosives
• Rock engineering support system performed to the expected specifications
• 34 horizontal blast holes were drilled at various lengths across the span of the trial mining block; 85% of blasted rocks were cast into the cleaning drive
• Gold bearing ore was extracted with minimal dilution from the foot or hanging wall
• A total of x tonnes of ore was "produced" containing approximately x ounces of gold, the ore is being stockpiled and will be immediately available for treatment once Theta has established processing capacity.

Figure 1: LHD at Frankfort Mine for Trial Mining

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The trial mining at Frankfort Mine was a success and proved that the planned mechanical longhole drilling applied to a narrow vein orebody will achieve the desired outcome and open endless possibilities within the goldfields. The reef varies greatly in thickness from 0.24m to 6m. The ability to mine at 0.6m or narrower means reduced dilution, delivery of a higher ore grade to the plant, less tailings and overall a more efficient process.

The trial mining has assisted with confirming initial costs and mine design. The reef is relatively soft in relation to the surrounding host rock, reducing anticipated drilling and explosive costs. The competence of the host sedimentary rock was again reaffirmed, the trail mining operation encountered no uncontrolled fall of ground which is also observed in other parts of the mine where excavations, mined over a hundred years ago, are still standing.

Results from trial mining are incorporated in the definitive feasibility study that is currently underway.

Figure 2 - Long holes drilled during the trial mining

TGME underground project permitting progress

• Negotiation with Ministry of Forestry, Fisheries and Environment (DFFE) underway for continued mining under newly declared Forest Nature Reserve
  During the quarter it has come to Theta's attention via the SA Government Gazette that the Minister of Forestry, Fisheries and the Environment ("DFFE") has declared a forest nature reserve over, amongst other areas, part of Portion 3 of the farm Morgenzon 525KT and Portion 1 and a part of the remaining extent of the farm Peach Tree 544KT. As a result, approximately 607 hectares of some 62,000 hectares in tenement areas held by Theta are potentially affected, comprising close to 20% of the potential resource base and the first phase of underground mining (refer to Annexure D).
  Theta is consulting with the Department of Mineral Resources and Energy and DFFE to facilitate a mutually beneficially way forward for continuation of mining activities.
  The host Pilgrims Rest Community Steering Committee and Pilgrims Rest Business Chamber have addressed letters to the DFFE Minister, requesting reconsideration of the decision, in view of the potential adverse impact on Theta's mineral reserves and consequences for the Pilgrims Rest town, community, environment and economic development.
  Theta has and will continue to make every effort to act as a responsible corporate and ESG citizen. The majority of the TGME project will be conducted within a previously disturbed (and partially

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unrehabilitated) footprint and will entail minimal new environmental disturbance and repairs and environmental improvements to those areas not previously rehabilitated.

• Draft scoping report for TGME underground project submitted
  The environmental authorisation permitting process for the 83 MR underground project is currently nearing the end of the scoping phase.
  The environmental application was submitted to the Department of Mineral Resources and Energy (DMRE) on 29 November 2021 and the draft scoping report was submitted for public review on 6 December 2021. The public review period will run until 27 January 2022.
  Effective stakeholder engagement is critical during the scoping public review period to ensure that all stakeholders understand the proposed project and project related information. Various stakeholder meetings will take place during January 2022 and the submission of the final scoping report is due for submission to the DMRE on 1 February 2022, the submission of the integrated water use license application is scheduled for March 2022.
  The appointed environmental specialists and engineers are actively working to finalise the work required for the submission of the integrated water use license application and for the Environmental Impact Assessment (EIA) phase that will commence once the DMRE approves the final scoping report (on the basis of all government activities proceeding according to plan estimated Late Q2 2022).

Figure 3: Ecologists undertaking the wet season site assessments for the various EIA biodiversity studies

Definitive Feasibility Study (DFS) of underground project and Prefeasibility study of Rietfontein mine progressing to plan

After the conclusion of the initial PFS in April 2021, Minxcon (Pty) Ltd ("Minxcon") was retained to advance the project to a DFS level, as well as to expand on the PFS to understand the added value from the inclusion of Rietfontein to the overall underground strategy.

The initial study focused on the easy access of 684,000 oz Au in the Measured and Indicated categories of the TGME Underground Resource for the Beta, Frankfort, and CDM areas. The TGM team achieved a conversion factor of 63% from resource to mining reserve in those areas. A further 3.5M oz Au of inferred resources is available to be upgraded to the Measured and Indicated resource category, and a portion could potentially be converted into mining reserves.

A conservative approach was applied to the study, as Rietfontein production was only incorporated at the end of the life of the project, and throughput capacity was unchanged. Rietfontein mine, with a mine

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delivered grade of 6.82g/t is the highest grade of the four mines incorporated in the project, and as part of the Definitive Feasibility Study (DFS), the option of incorporating Rietfontein production earlier, as well as expanding throughput capacity is being carefully considered.

A current limitation to the Rietfontein study is that further metallurgical test work is required. A sampling campaign is underway, from which more representable test work can be done on the mine's ore. For the PFS, a metallurgical recovery factor of 80% was applied to Rietfontein, despite much higher recoveries achieved historically. The proven results will therefore be incorporated in the DFS, and it was decided not to declare a reserve for Rietfontein until further test work is concluded.

Figure 4: Rietfontein Mine Stoping area in Life of Mine

Mineral Resources in initial Rietfontein Life of Mine Plan

Mineral Resource	Gold Grade	Diluted Tonnes	Gold Content
Category	g/t	kt	kg		koz
Indicated	6.92	479.25	3,316		106.62
Inferred	6.77	854.90	5,785		185.98
Total	6.82	1,334.15	9,101		292.60

The Rietfontein study will be incorporated in the DFS, which is expected to be delivered in Q2 2022.

Theta Gold continues to demonstrate excellent project economics for what the Company believes to be only a small portion of the underground resource. Theta will continue to build up its Mining Reserves during the next year by progressing the studies of Rietfontein and other mines. The team remains focused on its target of reaching a production level of 160koz/annum within five years from a multi-mine development programme.

CORPORATE UPDATE SUMMARY

Board Position Changes

The TGM Board was strengthened with the appointment of Mr Byron Dumpleton, as announced on 10 November 2021 1 as independent non-executive director, bolstering TGM's mining experience. Mr Dumpleton has corporate and transactional experience spanning 30 years on large scale projects with Straits Resources and Red 5 Limited. He has also worked at all levels in mining at some of Australia's most high-profile mines including Niffy Copper Mine, St Ives Gold Mine, Telfer Gold Mines, Kalgoorlie Super Pit and across Asia-Pacific.

Also announced on 10 November 20212, Mr Bill Guy, previously Non-Executive Chairman of the Company was appointed Executive Chairman to the Theta Board with immediate effect.

1. ASX Release dated 10 November 2021 - "New Board Appointments and Appendix 3X"
2. ASX Release dated 10 November 2021 - "New Board Appointments and Appendix 3X"

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