West Wits Mining Limited (ASX:WWI) has hit a new 10-year high after growing the gold resource at Witwatersrand Basin Project (WBP) in South Africa by 700,000 ounces to 4.37 million ounces at 3.88 g/t gold.
The lift in resources and 0.48 g/t increase in grade offer strong potential to improve overall economics as the company progresses a bankable feasibility study (BFS).
This resource increase for the WBP is based on a new estimate of 1.5 million ounces at 5.3 g/t gold at the K9A reef within the Kimberley East Project.
Shares surge 90%
Shares surged 90% to 8.1 cents intra-day, a new high of more than 10 years, and closed at 5.8 cents on strong volume of more than 420 million with the trades valued at almost $29 million.
West Wits managing director Jac van Heerden said, “This upgrade to our flagship gold project provides a tremendous boost to our confidence in the mineralisation and mine modelling that we are undertaking to advance this project toward development and production.
“4.37 million ounces at a robust grade of 3.88 g/t gold further solidifies the fact that we have a substantial project at the WBP.”
Updated global resource estimate for the Witwatersrand Basin Gold Project at a 2.0 g/t cut-off.
The resource upgrade is a result of the K9 Evaluation Project carried out by Shango Solutions, a South African-based geological consultant with significant experience in this region.
The new estimate is stated for the K9A and K9B conglomerate bands, two of the gold mineralised reefs within the Kimberley Reef package.
This new work adds several new areas for the K9A reef and provides additional information for the K9B reef which further improves confidence in the modelling of that reef structure.
The upgrade of the resource estimate has resulted in a net increase of 288,000 ounces in the combined measured and indicated categories and an additional 414,000 ounces of inferred resource.
Infill drilling program
There is potential for a further resource upgrade from Kimberley East with a 2,500-metre diamond core infill drilling program set to start on the eastern side of the ore body.
This has the aim of converting the inferred mineral resource, which amounts to around 50% in the initial 5-year mine plan, to the higher confidence measured and indicated categories.
The infill drill program is scheduled to begin next month with the first batch of drill holes scheduled to be completed by the end of 2020.
Location of the proposed infill drilling at the Kimberley East Project.
It is expected that the remainder of the program will be completed by the first quarter of 2021.
Kimberley East Project is the first potential underground operation once the Mining Right over the WBP is granted and is subject to the BFS which began in September 2020.
Van Heerden said: “We are confident in the anticipated granting of the Mining Right and that we will be able to bring the WBP into production relatively quickly given our plan for toll treatment at nearby facilities and easy access to the underground workings.
“The excellent analysis work carried out by Shango Solutions has highlighted higher grade zones such as the K9A’s 1.5-million-ounce gold zone grading 5.3 g/t, which for an underground operation is outstanding material to mine.”
Resource has grown steadily
West Wits has steadily grown the WBP’s JORC-compliant resource estimate since the company’s maiden 1.34-million-ounce resource in January 2016 to the current 4.37 million ounces.
WBP resource reconciliation history and overview since acquisition by West Wits.
DRD Gold Ltd (JSE:DRD), the previous owners of this mining area, declared a 12.8-million-ounce JORC (1997) resource in 2000.
West Wits’ strategic exploration objective has been the conversion of DRD’s historical resource into a JORC 2012-compliant estimate with a focus on areas above 400 metres, or areas above 1,500 metres which engineering studies have identified as accessible through the inclusion of a water pillar.