West Wits chairperson Michael Quinert
South African development finance institution the Industrial Development Corporation (IDC) has begun work to complete its due diligence investigation as part of its proposed R300-million (about $15.8-million) debt facility to fund development capital for ASX-listed West Wits Mining’s Qala Shallows project, the flagship project of the Witwatersrand Basin project (WBP), in Johannesburg.
“The commencement of work by the IDC team to complete the due diligence represents a significant milestone towards finalisation of funding for Qala Shallows. Not only does it move the IDC closer to providing final terms, but it will also provide comfort and validation for other potential funders who invariably respect and take heed of the IDC’s process.
“I am confident the significant work our team has done to demonstrate the project’s robust economics and technical merit will ensure a successful outcome for this due diligence programme,” says West Wits chairperson Michael Quinert.
The IDC’s initiation of work to complete the due diligence investigation was motivated by the progress West Wits has made in identifying other potential sources to meet funding requirements, including a previously announced $10-million debt facility from Wingfield Partners, as well as advanced proposals from other third parties, the company avers.
Subject to the successful completion of due diligence, the IDC will approach its executive credit committee for approval of final terms and conditions.
The positive completion of the due diligence is essential for finalising funding terms, mobilising resources, and initiating operations, West Wits points out.
Concurrently with the IDC's review, West Wits is advancing discussions with other funding sources, finalising proposed terms with parties at advanced negotiation stages, and engaging with various investors following the company’s participation in the recent Investing in African Mining Indaba conference in Cape Town, South Africa.
The Qala Shallows project, supported by a comprehensive definitive feasibility study, is expected to produce nearly one-million ounces of gold over a 17-year lifespan, with a steady-state output of over 70 000 oz/y of gold at a cost below $900/oz.
The project is expected to generate about 1 000 jobs over 18 years.