Pilgrim’s Rest gets set for a new gold boom

Australian company Theta Gold Mines has so far injected about R1 billion into establishing a mine in the historical gold mining Mpumalanga town of Pilgrim’s Rest, a heritage site.

Pilgrim’s Rest has in recent times been known for the annual gold-panning championships and an economy completely reliant on tourism because of the town’s mining history and heritage, while in fact it still harbours abundant gold ore reserves in an area covering 620km2.

This area was under Transvaal Gold Mining Estates (TGME), which was South Africa’s first gold mining company, founded in 1895. Theta Gold Mines has kept the old company’s name and still calls its venture the TGME project.

There are more than 43 historical mines identified across the vast prospective gold field. Theta Gold Mines’ venture is a re-awakening of the giant gold field where South Africa’s first gold rush started in 1873. The area is on the edge of the eastern Bushveld Complex.

TGME project delivery director, George Jenkins, said this week that about 300 people were expected to be employed in the construction phase of the open-pit mine – where a large hole in the ground would be dug to access ore that is near to the surface.

TGME, said Jenkins, discovered 6 million ounces of gold that could be mined for more that 20 years.

“This area never had any modern exploration operation. We’re quite excited about this opportunity and we can mine there for 40 years or even a century,” he said.

“The company has poured in close to A$21 million (R221 million) over the past five years and the capital cost to get it off the ground will be about $29.2 million (R505 million),” Jenkins added.

The total capital requirement for the project is $34.3 million, he said, and the company would be going to the market for at least this amount.

The company completed a feasibility study for starter pits at its projects last May, submitted environmental impact studies and has now sourced a ball mill from Glencore that’s capable of processing a million tons of ore per year.

Theta plans to mine just over 200 000 ounces in the first five years, at an all-in sustaining cost of $764 per ounce.

Construction of the open-pit plant will get under way in the second half of this year, pending environmental approvals and funding. In the longer term, production will expand to 150 000 ounces per year.

Jenkins said that the company was also looking forward to uplifting the local economy and contributing to the preservation of the environment. “We’ve not seen the environmental degradation you’ll find in mining villages and we’re looking at contributing to that. We would like to see vendors, restaurants and hotels reaping the benefits,” he said.

Theta Gold Mines has been sponsoring the gold-panning championships for two years, Jenkins said, and leased the local caravan park and gold club.

The company owns 74% while the other 26% stake is held by a BEE entity that comprises the local community and black employees trust and a strategic black partner.

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Local councillor, Mandla Mokoena, said that the investment was already being felt in Pilgrim’s Rest and villages as businesses were beginning to boom again. “This area relied solely on tourism revenue, and the rate of unemployment has been high. There is hope again in terms of jobs and creation of small businesses,” he said.

Pilgrim’s Rest is a heritage site under the Mpumalanga department of public works. Its economy took a knock in 2012 when the department faced litigation for evicting occupants of business sites in the town when it attempted to bring in black entrepreneurs. Then Public Protector, Thuli Madonsela, found that the procurement processes were flawed.

Last year, Finance and Economic Development MEC Pat Ngomane announced rejuvenation plans for the decaying town whose empty buildings faced ruin. Ngomane’s department and that of culture, sport and recreation installed QR codes – digital images containing historical information that can instantly be read using a smartphone camera – in the buildings on the main street.

The rejuvenation project also planned to beautify Pilgrim’s Rest through landscaping, redesigning and upgrading the signage. Eight guesthouses have already undergone major renovations.

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