West Wits Mining secures key ground for South African gold mine expansion
- Michael Busbridge
- 2 days ago
- 3 min read
West Wits Mining (ASX: WWI) has locked in a key new strategic tenement which should lay the groundwork for the long-term expansion of operations at its new Qala Shallows Kimberley Reefs underground gold mine near Johannesburg in South Africa’s famed Witwatersrand Basin.
At Qala Shallows the company has commenced mining the upper reaches of the Kimberley Reefs ore body which hosts a mineral resource estimate (MRE) of 5.025-million-ounces grading a healthy 4.66 grams per tonne gold.
The granted Prospecting Right provides for expanded mining operations along the eastern depth extension to the Qala Shallows ore body at the Witwatersrand Basin Project which is expected to form part of the Stage four Qala deeps project.
Future phases, including the company’s planned Bird Reef Central expansion and will include other independent reefs within the project’s area of tenure, will feed the company’s long-term “Project 200″ ambition of attaining 200,000 ounces of annual gold production through a staged process.
The company has commissioned consultants to review and remodel the existing Kimberley Reefs MRE at a lower cut-off grade. The current 2.0 grams per tonne value was established in 2017 when the gold price was trading back near US$1200 per ounce, compared to the current price environment of around US$4500 per ounce.
Key projected metrics for the mine include an initial 17-year mine life, based on steady-state production of 70,000 ounces of gold per year over a 12-year production sweet spot.
The mine opened in mid-October after West Wits hauled its first underground ore to surface, kicking off stockpiling ahead of toll treatment at Sibanye-Stillwater’s nearby Ezulwini plant. The commencement of mining marks a transformative step taken by West Wits transiting it from developer to producer at the same time laying the foundation for what could be multi-decade growth.
Management expects to have 30,000 tonnes ready to roll by the time the processing circuit fires up next March, setting the scene for Qala Shallows to move from a development story into what is shaping to be a cash-flow generating machine.
Between 2021 and 2023, West Wits stitched together a hefty 5.025-million-ounce resource across its entire footprint. But it was the Qala Shallows deposit that emerged as the standout starter mine, boasting 10.7 million tonnes at 2.98 grams per tonne for just over a million ounces of gold including 383,000 ounces of bankable reserves.
The company unveiled its money shot with a definitive feasibility study in July this year. It pointed to a net present value of US$500 million (A$755 million) and an internal rate of return of 81 per cent presenting the kind of financials that most junior miners dream of. Adding to its credentials, Qala Shallows already has the bones of a mine in place with an adit, a decline and a shaft ready to be used, giving West Wits a rare jump-start.
The operation is forecast to pump out around 70,000 ounces of gold every year for 12 straight years, spinning off an enormous US$983 million (A$1.5 billion) in post-tax free cashflow based on a conservative US$2850-ounce gold price.
The Witwatersrand Basin has minted mining legends for more than a century. The gold enriched basin is a world-class gold-mining province holding the world’s largest known gold reserves having produced over 1.5 billion ounces of gold since the early 1900s.
West Wits now looks poised to script its own mining legend. If and when this project hits full stride, the forecasts suggest it will be one of the biggest positive stories the region has seen in decades – a genuine reinvigoration of the South African gold-mining story built on modern standards, local benefit and long-term vision.
With funding, infrastructure and momentum now all in place, its long-life Witwatersrand dream is rapidly becoming a reality.
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