West Wits Mining snares US$35M loan to fast-track South African gold mine

West Wits Mining has deployed new hydro drills to fast-track the decline at its Qala Shallows mine in South Africa, ahead of first production in the first quarter of 2026.

ASX-listed West Wits Mining (ASX: WWI) has locked in a key piece of its funding puzzle after securing approval for a finance facility worth US$12.5 million (A$19 million) from an investment fund to power ahead with its one-million-ounce Qala Shallows gold project in South Africa.

The loan, which was organised by United States-based Nebari Natural Resources Credit Fund II LP, will be used to fund mobilisation and pay for the first stage of development of Qala Shallows. The deposit makes up part of the company’s broader Witwatersrand Basin project.

The deal also leaves the door open for an additional US$22.5 million in funding across two further tranches and under the same commercial terms, bringing the total up to US$35 million (A$53.5 million). West Wits says the new facility will ensure the company stays firmly on track for a first gold pour in early 2026.

Notably, three months ago, the company also won approval for a hefty ZAR 875 million (A$76 million) senior syndicated loan facility from the South African government-backed Industrial Development Corporation and in-country lender the Absa Bank.

While the new Nebari deal doesn’t replace that June funding package, it adds some serious optionality, giving West Wits the flexibility to also tap into the South African facility if and when needed.

Securing credit approval from Nebari, a highly experienced financier to the mining sector, for this significant financing package is a major milestone for West Wits and underscores the strong fundamentals of the Qala Shallows project.

West Wits Mining Managing Director and CEO Rudi Deysel

The loan, which has a tenor of four years, will be drawn as a single tranche on financial close and carries interest pegged to the three-month overnight rate plus an 8.5 per cent margin, subject to a 4 per cent minimum.

To grease the wheels, West Wits will also issue options with a four-year expiry date to Nebari equal to 35 per cent of the loan amount. These warrants let the US backer buy West Wits shares at a 30 per cent premium to either the lower of the 20-day average share price before the drawdown notice or today’s closing price.

The Witwatersrand Basin project sits on hallowed ground, with its surrounding goldfields yielding a staggering 62,000 tonnes of gold since the early 1900s.

Legendary names such as Rand Mines and Durban Roodepoort Deep once ruled these reefs, carving out what remains the richest goldfield on Earth. To this day, the basin holds its crown, having produced more than 40 per cent of all the gold ever mined in human history.

After being mothballed for 20 years - during which time the gold price has seen a significant re-rate - West Wits was awarded the opportunity to reopen the historic Witwatersrand Basin for mine development in 2018 by the South African Department of Mineral Resources and Energy.

Sitting on the immediate outskirts of a residential part of Johannesburg, the project has had to navigate some tricky environmental concerns. However, with a new set of guidelines and a tick of approval from the mines department, the company wasted no time in going to work.

Scoping studies and feasibility work were conducted across the project area between 2021 and 2023 and defined a global resource of 5.025 million ounces grading 4.66 grams per tonne (g/t). With its easy access to immediate ounces, the Qala Shallows deposit was soon pinpointed as a starting point for development. It has an existing resource of 10.7Mt grading 2.98g/t for 1.026 million ounces of gold.

An existing adit, decline and shaft added to the appeal of the underground resource and were quickly rehabilitated to allow early access for sampling and surveying. This included picking up a 150-kilogram sample from old workings to confirm grades.

Two months ago, West Wits released a long-awaited definitive study, which highlighted an astonishing set of economics. The findings forecast a net present value of US$500 million (A$764 million) using a 7.5 per cent discount rate and a huge post-tax internal rate of return of 81 per cent.

The mine is expected to produce 70,000 ounces of gold per year to deliver a total free cash flow after tax of US$983 million (A$1.5 billion) over a 12-year mine life using an assumed gold price of US$2850 (A$4360) per ounce. Impressively, the all-in sustaining cost of production is forecast to average just US$1289 (A$1970) per ounce, placing the project firmly in the lowest quartile of global producers.

The best news has been kept for last. Since West Wits is reopening an old mine, much of the underground infrastructure still exists and has been rehabilitated. The project’s price tag is remarkably modest, with total capital costs estimated at just US$60 million (A$93 million).

Even better, peak funding is capped at US$44 million (A$67 million), which is comfortably within the quantum of loan facilities already approved by its lenders, giving West Wits plenty of financial breathing room.

Operationally, stage one of mining development is racing ahead. The new funding has allowed West Wits to order in underground mining equipment. Blasting drill rigs and underground dump trucks are on order and scheduled for delivery in October.

When installed, the new machinery will be put straight to work stockpiling ore ahead of the all-important first gold pour in the first quarter of 2026. Processing is likely to take place through toll-treatment agreements at neighbouring gold plants until the company installs its own processing capacity.

Hydropower drilling rigs are already running on site, speeding up the decline work and making it safer. At the same time, geotechnical drilling is checking ground conditions to keep things on track.

Above ground, West Wits and its EPCM contractor are pushing ahead with building key infrastructure as the company gets ready to ramp up to a steady 65,000t of ore each month.

The punters have already enjoyed a stellar rise in fortunes recently, seeing the share price more than double to 4.6 cents a share in the past two months, and will no doubt be watching closely as the countdown to first pour ticks down.

With funding in place, equipment on the way, and mobilisation accelerating, West Wits is lining up what could be a glittering new chapter in one of the planet’s most storied goldfields.

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