West Wits Mining Limited (ASX:WWI) has released the definitive feasibility study (DFS) for Qala Shallows, the first stage of planned mine development at its Witwatersrand Basin Project (WBP) southwest of Johannesburg, South Africa.
The DFS forecasts the production of 663,000 ounces of gold for Qala Shallows, the WBP’s first stage of development, over a 17-year mine life.
DFS key step in transformation
West Wits managing director Jac van Heerden said the company was delighted with the results of the DFS, which delivered a robust proof for Qala Shallows and WBP.
“The completion of the DFS is a key achievement in our journey of transforming from an exploration operation to a robust, mid-tier gold production company,” he said.
“We are greatly encouraged with the result of this report, as we now strive to unlock significant value for our investors and shareholders and progressively stimulating the local economy as we start to engage skills, local contractors and service providers from the area.”
DFS details point to gold
The Qala Shallows DFS, which strongly supports West Wits’ progression to mine development at WBP, was highlighted by:
- 17-year life-of-mine;
- Maiden ore reserve of 3 million tonnes at 2.88 g/t for 278,000 ounces of gold;
- Proved ore reserve of 830,000 tonnes at 3.13 g/t for 84,000 ounces;
- 7.3 million tonnes at 2.81 g/t recovered grade for 663,000 ounces recovered gold for WBP’s initial stage;
- All-in sustaining cost (AISC) of US$1,144/ounce gold with a steady state AISC of US$1,027/ounce;
- 5-and-a-half year payback period for a US$50 million peak funding requirement;
- Peak steady-state production at 53,000 ounces per annum for 10 years;
- Pre-tax net present value of US$150 million;
- Internal rate of return of 35% at a gold price of US$1,750/ounce; and
- Total revenue of US$1.16 billion.
“Historically, the Witwatersrand Basin produced more than 35% of total global gold production and here we stand today, with positive DFS results, at the dawn of a gold revival in the same area,” van Heerden said.
Witwatersrand Basin Project
West Wits recently completed a scoping study on the wider WBP project, which outlined the potential to turn the project into a long-term gold producer with average steady-state annual production of 80,000 ounces for 18 years over a 20-year mine-life.
WBP also has the potential to build up to a peak production rate of more than 95,000 ounces per annum and the report’s production target averages 90,000 ounces from Year 6–11 as production reaches steady state from the Qala Shallows, Main Reef package & Bird Reef East areas.
The scoping study was underpinned by the WBP’s global 3.55-million-ounce gold resource, which covers the WBP’s mining right footprint, while further potential has been demonstrated as West Wits aims to build the resource beyond the current 25.91 million tonnes at 4.26 g/t.
Next steps
- West Wits will now develop the Qala Shallows stage, with that to be followed by a number of steps:
- Procuring the required project finance by utilising various financial instruments;
- Contracting and executing the site establishment by the mining contractor;
- Procuring long-lead mining equipment, while it should be noted that early works will utilise rental equipment as an interim measure;
- Refining the toll treating/rental arrangement with the identified process facility during the build-up;
- Continuing with further geological work and feasibility studies on Stage 2 and 3 of the WBP mining area; and
- Undertaking additional exploration drilling with the aim of converting the inferred mineral resources to indicated and measured categories.
- Daniel Paproth