Funding Uncertainty Looms as West Wits Pushes for Qala Shallows Production Start
West Wits Mining has increased its Mineral Resource Estimate by 749,000 ounces following a new Prospecting Right grant and appointed Rudi Deysel as CEO while advancing project financing for the Qala Shallows Gold Project.
- New Prospecting Right boosts Witwatersrand Basin Project MRE by 17.5% to 5.025Moz
- Rudi Deysel appointed as Chief Executive Officer, effective December 2024
- Credit approval received from one party for syndicated senior debt facility covering 50-60% of Qala Shallows funding
- Definitive Feasibility Study targets 924,000oz gold production over 17.7 years
- Company aims to commence production and first gold pour by mid-2025
Resource Expansion and Strategic Leadership
West Wits Mining Limited (ASX: WWI) has reported a significant milestone in its ongoing development of the Witwatersrand Basin Project (WBP) with the granting of a new Prospecting Right (PR 10730). This addition has increased the global Mineral Resource Estimate (MRE) by 749,000 ounces, a 17.5% uplift, bringing the total to 5.025 million ounces at an improved grade of 4.66 grams per tonne gold. This expansion not only enhances the project's scale but also potentially extends the operational life and production capacity of the Qala Shallows mine.
Complementing this resource growth, West Wits has appointed Mr. Rudi Deysel as Chief Executive Officer, effective from December 1, 2024. Mr. Deysel, previously COO and Country Manager for South Africa, brings over two decades of experience in mining operations and project development across Africa. His leadership is expected to accelerate the transition from feasibility to execution, leveraging his expertise in underground mining and project financing.
Progress on Project Financing
Securing funding remains a critical focus for West Wits as it advances the Qala Shallows Gold Project, the first phase of the WBP. The company has received credit approval from one of two parties involved in a syndicated senior debt facility, which is anticipated to cover 50-60% of the project's funding needs. The facility partners include a South African Development Finance Institution (DFI) and a commercial bank, both of which have completed rigorous due diligence encompassing technical, financial, and legal assessments.
The DFI is in the final stages of approval, with a decision expected imminently. This financing structure, combined with planned equity raises and operational revenues, is designed to underpin the project's development and ensure a smooth path to production.
Operational Outlook and Development Plans
The Definitive Feasibility Study (DFS) for Qala Shallows outlines an Ore Reserve of 4.03 million tonnes at 2.71 g/t gold, targeting 351,400 ounces of gold with a total production goal of 924,000 ounces over a 17.7-year life of mine. With the expanded resource base, West Wits is poised to explore increased production rates and enhanced economic viability through advanced mining studies.
Looking ahead, the company plans to secure final credit approvals, complete equity funding, and mobilise resources to initiate development activities in the first half of 2025. By mid-year, West Wits aims to execute its first blast and commence production, with the first gold pour expected to follow. The long-term plan targets a steady-state production of 70,000 ounces per annum at an all-in cost below US$1,000 per ounce over a three-year ramp-up period.
Broader Exploration and Corporate Updates
Beyond South Africa, West Wits continues to engage with its Farm-In partner, Rio Tinto Exploration, at the Mt Cecelia project in Western Australia, seeking opportunities to advance exploration. The company also remains open to divesting non-core assets such as the Derewo Project in Indonesia.
Corporate governance remains transparent, with related party payments disclosed and ongoing efforts to manage working capital prudently. The company’s cash position at the end of the quarter stood at A$968,000, with an estimated funding runway of less than one quarter, underscoring the importance of securing the remaining financing.
Bottom Line?
West Wits is on the cusp of transforming its expanded resource into production, but finalising full project financing remains the pivotal hurdle.
Questions in the middle?
- Will the South African Development Finance Institution approve the remaining syndicated debt facility soon?
- How will West Wits manage funding gaps if equity raises or additional financing face delays?
- What impact will the expanded Mineral Resource Estimate have on the project's long-term economics and production profile?