West Wits Mining Ltd (ASX:WWI, OTCQB:WMWWF) has announced positive updates to the Definitive Feasibility Study (DFS) for its Qala Shallows project, part of the Witwatersrand Basin Project (WBP) in South Africa. The updated DFS reflects improved economic outcomes, strengthened by a higher gold price assumption and finalised supplier contracts.
The revision represents a key advancement in the project’s development, showing stronger financial returns and a shorter payback period compared with the 2023 DFS.
Improved financial metrics and operational efficiency
The updated DFS reveals a sharp increase in projected revenues, free cash flow, and post-tax net present value (NPV), driven by stronger assumptions about gold prices and improved cost estimates. These changes have prompted a 58% increase in revenue to US$2.7 billion, while free cash flow is expected to nearly double under the updated assumptions, rising by US$461 million to US$983 million. The base-case post-tax NPV has increased by 97% to US$500 million, with the internal rate of return (IRR) soaring to 81%, up from 53% in 2023.
Base Case - Key production metrics for Qala Shallows.
The updated study also highlights a significant reduction in the peak funding requirement, decreasing by 18.2% to US$44 million, and a shortened payback period. The time from the end of peak funding to payback has been reduced to just 8 months, compared with the previous forecast of 13 months. This is expected to boost confidence in the project’s financial robustness.
“The updated DFS for Qala Shallows has delivered a compelling outcome, reinforcing the project’s robust value and strong economic fundamentals,” West Wits managing director Rudi Deysel said. “Notably, the peak funding requirement and payback period have reduced, while free cash flow has surged by US$461 million — an 88% uplift — bringing total projected free cash flow to US$983 million.
“With the benefit of a stronger gold price environment, the project’s valuation continues to strengthen, providing shareholders with increased confidence in Qala Shallows’ capacity to deliver strong sustained returns, which is highlighted by a post-tax IRR of 81%,” Deysel added. “We remain focused on advancing the Witwatersrand Basin Project and unlocking its full potential.”
Increased reserves and revised mine plan
Bara Consulting, the independent mining engineers commissioned to review the DFS, updated key components of the study based on new assumptions including a higher gold price of US$2,850/oz, which has been factored into the revised capital expense (capex) and operating expense (opex) numbers. The stronger gold price assumption — up from the $1,850 price at the time of the 2023 DFS but still well below current spot gold prices of more than US$3,300 — has allowed for the mining of previously excluded ore, improving the production profile and project economics.
The 2025 DFS also includes a 9.3% increase in ore reserves, now totalling 4.6 million tonnes at a grade of 2.60 g/t, equating to 383,900 ounces of gold. This increase is attributed to the updated mine plan, which incorporates a lower cut-off grade of 1.31 g/t, enabling the inclusion of more ore in the mine schedule.
Base Case - 2025 Update vs 2023 LOM Plan.
The mine life is now projected at 16.8 years, with steady-state production of 70,000 ounces per year for 12 years, an increase from the previous estimate of 9 years.
Qala Shallows Base Case - Production profile showing the waste and ore mining overlaid with the recovered ounce profile over LOM.
Next steps for Qala Shallows development
Looking ahead, West Wits is focused on securing the remaining project funding and continuing with the pre-production works at Qala Shallows. The company has already delivered key infrastructure, including substations, water infrastructure and underground access.
With mining contractor Modi Mining engaged and key equipment mobilised, the project is progressing towards steady-state production, expected to ramp up to 5,700 ounces of gold per month.
West Wits Mining continues to progress with the development of the Witwatersrand Basin Project, with a clear path forward for the Qala Shallows project and its gold resources.