West Wits Mining Ltd (ASX:WWI, OTCQB:WMWWF) has raised A$1.5 million in before costs, with funds to be used for the company’s flagship Qala Shallows operations, consultants’ costs connected to the bank funding due diligence process and working capital, corporate and offer costs.
Earlier this year, a South African Development Finance Institution (DFI) started due diligence for mine development at Qala Shallows — a cornerstone of the Witwatersrand Basin Project. This was a crucial step toward finalising the funding needed to begin operations to transition to a gold producer.
The company noted in the June quarter that the due diligence conducted by DFI for project funding is now substantially completed. The DFI will proceed with its approval process within the current quarter.
Additionally, negotiations have advanced with a commercial bank interested in participating in a larger syndicated senior debt loan alongside the DFI. The bank has also begun its due diligence and aims to proceed with its approval process during this quarter.
The Qala Shallows project is poised for operation, supported by strategic initiatives, completed infrastructure projects and finalised contracts.
Underpinned by a comprehensive definitive feasibility study (DFS), this is the initial phase of the company’s strategy to tap into the Witwatersrand Basin Project’s substantial 4.28-million-ounce gold mineral resource estimate (MRE).
Qala Shallows is projected to yield nearly one million ounces of gold over its 17-year lifespan, sustaining an annual steady-state production of more than 70,000 ounces at an operational cost of less than US$900 per ounce.
$1.5 million raised
Demand for the capital raising surpassed the A$1.5 million target. The issuance of these convertible notes is subject to shareholder approval, which the company intends to seek at an Extraordinary General Meeting (EGM) expected in early October 2024.
The subscription funds will be received as a loan on or around August 29, 2024, contingent on shareholder approval. Should the approval not be granted, the loan must be repaid within four months of the EGM.
Funds raised will be used for the following (indicative timetable only):
Each convertible note is issued at a price and face value of A$25,000. These notes have a conversion price of A$0.02 (2 cents) until January 17, 2025. After this date, the conversion price will be the lesser of A$0.02 (2 cents) or a 20% discount to the 15-day Volume Weighted Average Price (VWAP) of WWI shares at that time.
Instead of paying interest, the company will issue investors in the convertible notes 25 unlisted options (with an exercise price of A$0.023 (2.3 cents) and expiring 36 months from issuance) for every A$1 subscribed for convertible notes, amounting to a total of 37,500,000 unlisted options.