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A definitive feasibility study (DFS) on the Qala Shallows Stage 1 of the Witwatersrand Basin project, in South Africa, has estimated that the project could produce 53 000 oz/y over ten years.
ASX-listed West Wits Mining said this month that the DFS reported a mine life of some 17 years for the Qala Shallows project, delivering a total of 663 000 oz over that period.
The Qala Shallows project is expected to generate revenue of $1.16-billion and free cash flow of $240-million, with peak funding requirements estimated at $50-million. The DFS has estimated a post-tax net present value of $106-million and an internal rate of return of 30%.
“The completion of the DFS is a key achievement in West Wits’ journey of transforming from an exploration operation to a robust, midtier gold production company,” said MD Jac van Heerden.
“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. We are greatly encouraged with the result of this report, as we now strive to unlock significant value for our investors and shareholders, with this the first of five stages of development.
“Additionally, we are also looking forward to progressively stimulating the local economy as we start to engage skills, local contractors and service providers from the area.”
First ore is expected to be extracted 12 months from the start of development, building up to an annualised production rate of 25 000 oz/y after 30 months and reaching a full steady-state production rate of 53 000 oz/y after year four. The Qala Shallows project will continue a projected production at steady state of 53 000 oz/y for about ten years.
Once the Qala Shallows is depleted, production will continue at Qala Deeps, using most of the existing infrastructure.
“It’s exciting that we have just completed the DFS on the Qala Shallows project, but we have all these other projects in the pipeline that will come on line. As we put the Qala Shallows into operation, we will directly move over to the Bird Reef East,” Van Heerden told delegates at Paydirt’s Africa Downunder conference, in Perth.
“There is a lot more to come than just this feasibility study.”
West Wits has said that development of the Qala Shallows project was planned to start this month, with the project representing only Stage 1 of five project stages to be developed by the company comprising the Witwatersrand Basin project. Qala Shallows represents an estimated 40% of the total planned production of the total potential of the Witwatersrand Basin project.