ASX-listed West Wits Mining has reported a cash and cash equivalent position of $1.4-million as at December 31, which, coupled with a proposed $15.8-million debt facility with the Industrial Development Corporation (IDC) and another possible $26-million from other partners, puts the company in good stead to develop the Qala Shallows project.

As the IDC progresses a due diligence investigation to finalise funding terms and mobilise resources, West Wits has been preparing the Qala Shallows project for a quick-as-possible start-up.

The Qala Shallows project is expected to produce 924 000 oz of gold over an 18-year mine life, with steady-state production of about 70 000 oz/y for nine years.

An updated definitive feasibility study on the project envisions a free cash flow generation capability of $522-million and a post-tax net present value of $255-million, at a gold price assumption of $1 850/oz. From start of mine construction, the payback period has been estimated at 4.1 years.

Qala Shallows currently has an ore reserve of 4.03-million tonnes grading 2.71 g/t gold, for a total 351 400 oz.

West Wits says all regulatory approvals are in place, including a mining right and environmental permissions, to enable production ramp-up upon the company securing project finance.

Apart from the IDC, West Wits also received formal interest from the South African Wealth Fund and Wingfield partners totalling just under $26-million, which is about 50% of Qala Shallows’ peak funding requirement of $54-million. This due diligence is also under way.

Some existing infrastructure at Qala Shallows includes offices, change houses, lamp rooms and training facilities.

West Wits has also been working with mining contractor Modi Mining to ensure the availability of necessary labour and skills, to enable a swift and efficient start-up of operations in due course.

Ongoing engagements with mining equipment manufacturers and suppliers also allows West Wits to move towards finalising agreements for supply and maintenance quickly, particularly for specialised plant equipment.

Moreover, West Wits has a prospecting right application under consideration by the South African mining authorities adjacent to the mining right site. It would provide the company with an extension of the Kimberley reefs south of Qala Shallows.

West Wits is still considering the potential for a standalone uranium and gold project around the Bird Reef Package within its mining right area. A potential option is to secure a strategic joint venture partner to develop the project as a separate operation to Qala Shallows.