West Wits shifts first ore as South African gold production looms
The company’s wider Witwatersrand Basin project lies within hallowed mining territory, a stretch of land that has produced a staggering 1.5 billion ounces, or 62,000 tonnes, of gold since the early 1900s.
Once managed by gold mining giants such as Rand Mines and Durban Roodepoort Deep, the basin remains the beating heart of global gold mining. To this day, it still holds the title of the richest goldfield on the planet, responsible for more than 40 percent of all gold withdrawn from Earth.
West Wits has mapped a massive 5.025 million ounce gold resource across the entire project area between 2021 and 2023. However, it was the Qala Shallows that stood out as the launching pad with a resource rating of 10.7 million tonnes at 2.98 grams per tonne (g/t) of just over one million ounces, including 383,000 ounces in the reserves category.
Qala, whose own entry, drop and shaft already existed, was a dunk with a rare advantage. Once mining begins, steady-state production is expected to rise from 15,000 to 20,000 tonnes of ore per month early next year to a whopping 65,000 tonnes per month by year three.
In addition to Qala Shallows’ testimonials, the company turned a few heads after dropping a definitive feasibility study on the blockbuster in July. This represented a net present value of US$500 million ($755) and an internal rate of return of a jaw-dropping 81 percent; it promised an economy that most young people could only dream of.
The mine is estimated to produce 70,000 ounces of gold per year for 12 years, generating an eye-watering US$983 million (AU$1.5 billion) in after-tax free cash flow at an extremely conservative gold price of US$2850 (AU$4300) per ounce.
Notably, all upkeep costs are pegged at just US$1289 (A$1950) per ounce, solidifying Qala Shallows as one of the lowest-cost gold producers in the game.
Backed by a strengthened war chest, including US$17.7 million from an equity raise in September and access to the US$12.5 ($19) million Nebari credit facility, as well as a US$50 ($75) million syndicated loan pending final terms, West Wits appears well-funded to progress the production ramp-up phase without touching the market again.
In a region that has created mining legends for more than a century, West Wits looks set to write its own golden chapter. With the drilling machines humming, the ore piling up, and the first gold coin appearing on the horizon, the company’s transformation from explorer to producer is progressing rapidly.
With the funding, infrastructure and momentum now in place, the long-lasting Witwatersrand dream appears to be rapidly becoming a reality.
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