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
Precious and base metals explorer, developer and producer West Wits Mining.

Project Description
Qala Shallows is Stage 1 of West Wits’ plans to exploit the company’s extensive 4.28-million-ounce gold mineral resource estimate at the WBP. 

The two Kimberley reefs – K9A and K9B – will be processed during the life of the project.

Qala Shallows is forecast to produce nearly one-million ounces of gold over its 17-year life span, maintaining a  steady-state output of 70 000 oz/y over nine years at an operational cost below $900/oz. The orebody will be accessed from surface through a decline system developed from the existing Qala adit boxcut.

Development of the strike drives and decline will be by mechanised method, with drill rigs, load-haul dumpers and articulated dump trucks deployed for drilling, face cleaning and hauling the blasted rock to the tips.

The July 2023 definitive feasibility study determined that conventional breast mining in an underhand configuration is the optimal method for the deposit.

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 18 years.

Net Present Value/Internal Rate of Return
At a gold price of $1 850/oz, the project has a pretax net present value (NPV), at a 7.5% discount rate, of $367-million and an after-tax internal rate of return (IRR) of 53%, with a payback of 4.1 years from the start of construction. 

At a gold price of $2 200/oz, the project’s pretax NPV increases to $531-million, at a 7.5% discount rate, and an after-tax IRR of 72%, with a payback of 3.6 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. At a gold price of $2 200/oz, peak funding decreases to $43-million.

Planned Start/End Date
First gold is targeted for the fourth quarter of 2025.

Latest Developments
West Wits Mining has agreed to a credit-approved term sheet for a senior debt syndicated loan facility of up to R902.5-million to provide senior funding for development of the Qala Shallows gold project.

West Wits chairperson Michael Quinert has said that securing this facility will provide the majority of funding on nondilutive, cost-effective bank loan terms.

The Industrial Development Corporation of South Africa (IDC) and banking group Absa Bank – acting through its Corporate and Investment Banking division –  will deliver about 55% of all project funding.

The IDC will provide up to R465-million, with Absa providing the balance. The remaining 45% of project costs will be funded through equity and early revenues.

The proceeds are to be applied to the development, construction, commissioning and operation of the project.

The facility will be drawn down progressively following the deployment of a project equity contribution.

Repayment is scheduled to occur over 36 months from completion of the draw down phase, which will take about 24 months. The interest rate is variable and linked to the Johannesburg Interbank Average Rate.

The agreed term sheet follows the completion of a technical, environmental and legal due diligence process, and approval of the loans by the respective primary credit committees of Absa and the IDC.

West Wits has noted that the parties are progressing quickly to work towards finalising legal documentation for execution and achieving financial close.

In anticipation of securing the loan facility, West Wits has been examining a range of options to procure the balance of funds required to ensure Qala Shallows is fully funded to positive cash flow.

West Wits expects to finalise its plans in this regard and update the market in the near term.

Key Contracts, Suppliers and Consultants
Not disclosed.

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