West Wits Mining Ltd (ASX:WWI)’s kick-off project is at Qala Shallows, a name which provides a metaphor for the company’s rejuvenation of an established resource in one of the world’s oldest gold mining centres.
Qala Shallows falls within West Wits’ broader Witwatersrand Basin Project (WBP) in South Africa, which is revitalising an already well-mined location using a modern technical approach in a region steeped in gold mining tradition and expertise.
The resulting business model is uniquely streamlined and has allowed West Wits to shift into operational mode - after significant background work - according to an accelerated schedule.
WBP is fifteen kilometres west of the Johannesburg city centre, and its reefs have all been previously successfully mined using old-era technologies and processes.
17-year life-of-mine project
The results of Qala Shallows’ recently released definitive feasibility study (DFS) indicate a Proved Ore Reserve of 830,000 tonnes, a 17-year life-of-mine project and a steady-state production of 53,000 ounces per annum for 10 years.
All this for what is only the first stage of West Wits’ overall project at the WBP.
The fact that local operators are familiar with the characteristics of Johannesburg’s reefs creates a high quality surrounding eco system for the West Wits operation, resulting in low CAPEX costs.
In addition, the WBP has immediate access to experienced and cost-effective service providers for tailings, refinery and other central process elements, creating an attractive all-in sustaining costs (AISC) paradigm.
3.55-million-ounce resource
In July 2021, the DMRE granted WBP its Mining Right and both the results of the Scoping Study and Qala Shallows DFS were completed in August 2021, shortly after the Mining Right was granted.
While the scope of the initial license was less than the original prospecting area applied for, the company’s application to begin the process of obtaining a new Prospecting Right has been formally accepted by the South African Department of Mineral Resources and Energy (DMRE).
The company anticipates that - subject to the granting of the new prospecting right - a significant portion of the old resource, which was restated by the DMRE to reflect a smaller surface, will be re-introduced to further increase the current and already significant global resource of 3.55 million ounces at 4.26 g/t gold.
Project development started
Following the release of the DFS, Qala Shallows’ project development commenced in September 2021.
West Wits expects production to commence in early 2022.
Qala Shallows is the first of five West Wits project stages set to roll out at the Witwatersrand Basin.
The company’s other WBP targets will be going through their own DFS processes in the coming months, and West Wits expects most DFS results to be announced by the second quarter of 2022.
Given the history of the area and the established knowledge as to the quality of these resources, West Wits anticipates similarly strong results as to Qala Shallows, which bodes well for the future of the WBP.
Mt Cecelia Project, Western Australia
West Wits is also making positive strides at its Mt Cecelia Project in Western Australia, starting fresh in a new mining area that is generating significant industry attention for the positivity of its recent prospecting results.
The company’s SkyTEM HEM survey has identified eight exploration targets, with the later ground based MLTEM survey confirming four of those as high-priority targets.
A maiden drilling program is planned to start in 2022.
As a 100% owned greenfield project, Mt Cecelia is in many ways a mirror image of the rejuvenation of an established site taking place at the Witwatersrand Basin.
Looking forward
The release of the Qala Shallows DFS has empowered the company to engage comprehensively with financial institutions as it moves towards production status.
West Wits now enjoys a range of finance options and has the option to utilise a combination of capital raising on the ASX and debt funding.
Other instruments, such as streaming, are also under consideration.
West Wits received a vote of confidence from cornerstone investor Wingfield during the reporting period, with Wingfield electing to convert 100% of the convertible notes to West Wits shares, effectively removing US$1.17 million of debt from the balance sheet and establishing Wingfield as a major shareholder and a key West Wits strategic investor.