Name of the Project
Witwatersrand Basin Project (WBP) – Qala Shallows.

Location
At the northern edge of the Witwatersrand basin, in the Central Rand goldfield, south-west of the City of Johannesburg, in Gauteng, South Africa.

Project Owner/s
ASX-listed West Wits Mining.

Project Description
Qala Shallows forms part of the WBP. The project is the first stage of West Wits’ plans to develop the company’s extensive 4.28-million-ounce gold mineral resource estimate at the WBP. A definitive feasibility study (DFS) completed in 2023 determined that conventional breast mining in an underhand configuration is the optimal method for the deposit.

The updated results of the DFS have further enhanced the project’s promising outlook. 

The project is forecast to produce an estimated 924 000 oz of gold over its 17.7-year life span, maintaining steady-state output of more than 70 000 oz/y at an operational cost below $900/oz.

The two Kimberley reefs – K9A and K9B – will be processed during the life of the project. The Kimberley reef ore produced will be treated at an existing nearby plant on a toll treatment basis. A toll treatment agreement has been signed with the Ezulwini process plant facility and all ore produced will be truck-hauled to this plant, which uses the carbon-in-pulp process for gold recovery.

Potential Job Creation
The project is expected to generate about 1 000 jobs over its mine life.

Net Present Value/Internal Rate of Return
Based a gold price of $1 850/oz, the updated DFS estimates a pretax net present value, at a 7.5% discount rate, of $367-million and a pretax internal rate of return of 53%, with a payback of 4.1 years from the start of construction.

Capital Expenditure
The peak funding requirement is $54-million, which is substantially reduced at the prevailing gold price and rand:dollar foreign exchange rate, owing to higher revenue from production during the three-year mine development phase.

Planned Start/End Date
The mine is expected to take three years to develop.

Latest Developments
Progress, including a detailed funding model to underpin the company’s financing initiatives, has been made.

“Understandably, there is a level of frustration about how long it has taken for the company to procure funding to allow for the start of the project,” West Wits Mining chairperson Michael Quinert said during an annual general meeting on November 25. This has been exacerbated by contractual and regulatory restrictions.

The company continues to diligently pursue its initiative to procure first-tier bank-style loans for 50% to 60% of project development funding for Qala Shallows.

The process is comprehensive, reflecting the risk-averse approach of banks compared to that of equity markets.

Due diligence has involved detailed investigations by independent experts into all aspects of the project, including technical, financial, environmental and legal compliance.

The two lenders primarily targeted are a commercial bank and a South African development finance institution. The key terms are resolved, the financing models finalised and the due diligence investigations are complete.

Both institutions are seeking credit approvals.

West Wits is also engaging with other potential bank lenders that can provide collateral facilities, such as fleet finance and working capital facilities, or potentially step in to join the proposed syndicate for the loan project development facility.

However, Quinert has indicated that the company does not have all the desired certainty, but remains confident that the project will secure bank-style loan funding.

West Wits is also progressing plans for financing the nonbank component of development costs. “There are a range of options, which could involve bridging debt, hybrid securities, equity and/or a combination thereof. Upon bank funding approval, we expect these discussions to move forward quickly,” Quinert has said.

Based on the company’s interactions with the proposed lenders and its advisers, West Wits expects to finalise funding arrangements during the next quarter. 

Key Contracts, Suppliers and Consultants
Contracts adjudicated with key suppliers, including engineering, procurement and construction management, toll processing, mining contractor, underground equipment and explosives.

Contact Details for Project Information
West Wits Mining, tel +61 3 8692 9049 or email info@westwitsmining.com.