Witwatersrand basin project – Qala Shallows Phase 1 – South Africa – update

1st March 2024 By: Sheila Barradas - Creamer Media Research Coordinator & Senior Deputy Editor

Witwatersrand basin project – Qala Shallows Phase 1 – South Africa – update

Photo by: West Wits Mining

Name of the Project
Witwatersrand basin project (WBP) – Qala Shallows Phase 1.

At the northern edge of the Witwatersrand basin, in the Central Rand goldfield, south-west of the City of Johannesburg, in Gauteng, South Africa.

Project Owner/s
West Wits Mining.

Project Description
Qala Shallows forms part of the WBP.

The updated results of the definitive feasibility study (DFS) have further enhanced the project’s promising outlook. The project has contained ore estimated at 1.01-million ounces.

The two Kimberley reefs – K9A and K9B – will be processed during the life of the project.

The Kimberley reef ore produced will be treated at an existing nearby plant on a toll treatment basis. A toll treatment agreement has been signed with the Ezulwini process plant facility and all ore produced will be truck-hauled to this plant, which uses the carbon-in-pulp process for gold recovery.

The updated DFS envisages production of 10.1-million run-of-mine tonnes, compared with 7.6-million in the DFS. Maximum production has increased from 699 000 t/y in the DFS to 839 000 t/y in the updated DFS, for overall production of 924 000 oz from 688 000 oz.

Steady state production is estimated at 70 000 oz/y.

The mining method has been left unchanged from that used in the 2022 DFS. The only difference between the mining plans relates to mining sequence and timing.

The updated DFS has determined that conventional breast mining in an underhand configuration is the optimal method for the deposit.

Life-of-mine (LoM), from construction to relinquishment, has increased from 15.7 years to 17.7 years.

Potential Job Creation
The project is expected to generate about 1 000 jobs over 18 years.

Net Present Value/Internal Rate of Return
The updated DFS has a pretax net present value (NPV), at a 7.5% discount rate, of $367-million and an internal rate of return (IRR) of 38%, with a payback of five years, compared with an NPV of $180-million and a payback of 4.1 years, in the August 2022 DFS. The IRR remains the same.

Capital Expenditure
Peak funding has decreased from $63-million in the August 2022 DFS to $54-million in the June 2023 updated DFS.

Planned Start/End Date
Phase 1 is expected to be completed in 2026.

Latest Developments
South African development finance institution the Industrial Development Corporation (IDC) has started work to complete its due diligence investigation as part of its proposed R300-million debt facility to fund development capital for the project.

“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,” West Wits chairperson Michael Quinert has said.

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 has indicated.

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.

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.

Key Contracts, Suppliers and Consultants
Calgro M3 (secure potable water supply for the mine).

Contact Details for Project Information
West Wits Mining, tel +61 3 8692 9049 or email info@westwitsmining.com.