West Wits Projects US$983M Free Cash Flow on Qala Shallows DFS Update

Updated DFS Delivers Stronger Economics

West Wits Mining Ltd has announced a compelling update to its Definitive Feasibility Study (DFS) for the Qala Shallows segment of the Witwatersrand Basin Project in South Africa. Compared to the 2023 DFS, the new study projects a 58% increase in total revenue, now estimated at US$2.7 billion, driven largely by a higher gold price assumption of US$2,850 per ounce. This adjustment, alongside refined mine planning, has propelled free cash flow forecasts by 88% to nearly US$1 billion.

The updated mine plan incorporates a lower cut-off grade of 1.31 grams per tonne, down from 2.0 grams, enabling the inclusion of additional ore previously deemed uneconomic. This has resulted in a 9.3% increase in ore reserves to 383,900 ounces, while steady-state production is maintained at approximately 70,000 ounces per annum but extended over a 12-year period, three years longer than before.

Reduced Capital and Accelerated Payback

Capital expenditure requirements have been trimmed, with peak funding needs falling by 18% to US$44 million and the peak funding period shortened to 2.6 years. The payback period from the end of peak funding has improved dramatically to just eight months, compared to 13 months in the previous study. These metrics underscore a more efficient capital deployment and quicker return on investment, enhancing the project’s appeal to financiers and investors alike.

West Wits has already secured a senior syndicated loan facility of approximately US$50 million from South African lenders, including the Industrial Development Corporation and Absa Bank, underpinning the project’s funding strategy. Early mobilization activities are underway, with key equipment delivered and mining contractors engaged, signaling a transition from planning to execution.

Operational and Technical Confidence

The project benefits from a well-established mining right and comprehensive environmental and social licenses, reducing regulatory risk. The mining method remains conventional breast mining, widely used in South Africa, supported by detailed geotechnical studies. Ore processing will be conducted via toll treatment at the nearby Ezulwini Process Plant, leveraging existing infrastructure and reducing upfront capital costs.

Metallurgical recovery is estimated at 92%, consistent with historical performance on similar ore types. The study’s sensitivity analyses demonstrate robust project economics even at lower gold prices and varying exchange rates, reflecting resilience to market fluctuations.

Strategic Implications and Next Steps

Managing Director Rudi Deysel emphasized the strengthened economic fundamentals and the company’s focus on advancing the Witwatersrand Basin Project. With improved financial metrics and operational readiness, West Wits is positioned to unlock significant value from this historically prolific gold region. The company’s immediate priorities include finalizing the remaining funding, continuing equipment mobilization, and building ore stockpiles to support steady production ramp-up.