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

Location
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.

West Wits has executed an agreement with the 10% minority holder of West Wits SA (WWSA) to buy back its entire holding, thereby increasing the holding of West Wits Mining in WWSA to 100%. This increases the company’s ownership of Qala Shallows and WBP from 66.6% to 74%.

The transaction will be facilitated through an advance of about $5-million from West Wits to WWSA, which will be credited to the existing intercompany loan and, ultimately, repaid through the proceeds of operating the Qala Shallows gold mine.

The buy-back will likely be implemented in mid- to late July 2025.

Project Description
The WBP comprises three distinct reef mining targets, each slated for sequential development: the Kimberley reef – where Qala Shallows is located, Main reef and Bird reef.

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 is moving quickly to execute the development of the Qala Shallows gold project.

Service supplier agreements have been executed, with initial orders placed and the first piece of equipment to be delivered in due course, West Wits CEO Rudi Deysel said on June 23.

The initial phase of mobilisation to site has started. The first haulage equipment – a load haul dump truck – is moving to site. Diesel generators are also being installed, while mining contractor Modi Mining is starting preparation work for production.

Other critical equipment, such as the hydropower system to run underground mining equipment, is on its way.

Initial works scheduled over the next few months include the construction of a boxcut concrete roadway and ancillary preparation work on the decline, finalising the design for electrical system installation, storehouse and workshop completion, underground survey work, as well as sliping and associated work around stopes.

These works will prepare Qala Shallows for the start of ore extraction as part of the mine development works specified in the definitive feasibility study (DFS).

West Wits Mining has said that instructions have been issued to Bara Consulting to start the review and updating of the Qala Shallows DFS, which was initially published in July 2023.

A key component of the updated DFS will be the inclusion of a new gold price and foreign currency assumptions, based on current consensus forecasts. With current spot gold prices of over $3 300/oz, the gold price assumption for the updated DFS will be a substantial increase on that previously used and is expected to have a material positive impact.

The DFS will also incorporate revised capital expenditure and operating expenditure numbers, reflecting the supplier contracts that have now been finalised, as opposed to industry estimates. Using actual contracted numbers will improve the accuracy of the DFS outcomes.

The updated DFS will also include an updated mine plan based on a lower cutoff grade, which is warranted given the higher gold-price environment, compared to when the DFS was released.

The higher gold price allows for the mining of ore previously not included in the mine plan, which is expected to facilitate an increase in the ore reserves, as well as accelerate and increase the production profile, as more ore is available for inclusion.

The key outcomes of the revised DFS are expected to lower peak funding requirements, shorten the payback period and lift net present value estimates, West Wits has said.

West Wits Mining previously reported that it had received firm commitments to raise A$14.36-million through a share placement to existing and new sophisticated and professional investors.

The placement is aimed at strengthening the company's balance sheet, increasing its holding in the WBP and funding the start of operations at Qala Shallows.

Key Contracts, Suppliers and Consultants
Modi Mining (mining contractor).

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