West Wits’ Qala Shallows DFS Shows $983M Free Cash Flow, 81% IRR

Strategic Financing Secured

West Wits Mining Limited has taken a decisive step forward in advancing its flagship Qala Shallows Gold Project by executing a senior syndicated loan facility worth ZAR 875 million, approximately USD 50 million. This financing, provided jointly by the Industrial Development Corporation of South Africa and Absa Bank, covers over half of the project's funding requirements. The loan's milestone-based drawdowns and structured repayment terms, coupled with mandatory hedging arrangements, provide a robust financial foundation while protecting against gold price volatility.

Enhanced Project Economics

The company commissioned an update to its 2023 Definitive Feasibility Study, reflecting a gold price environment nearly 50% higher than previously assumed. The results, released shortly after the reporting period, reveal a substantial uplift in key financial metrics – free cash flow nearly doubled to US$983 million, and the post-tax net present value surged by 97% to US$500 million. These improvements underscore the project's strengthened viability and potential for long-term value creation.

Mobilisation and Operational Progress

Transitioning from planning to execution, West Wits has commenced mobilisation activities at Qala Shallows. The mine was officially reopened and declared safe, with critical supplier contracts secured, including mining contractors, equipment suppliers, and engineering management. Early deliveries such as the Load Haul Dumper and installation of hydropower systems mark tangible progress on site. Preparatory works like underground water pumping, electrical system recommissioning, and infrastructure construction are actively underway to support initial ore extraction.

Corporate Moves and Community Engagement

In addition to operational strides, West Wits increased its stake in the Witwatersrand Basin Project to 74% by buying back a 10% minority interest. The company also completed a A$14 million equity placement to fund ongoing operations, the buyback, and working capital needs. Senior management appointments have been made to bolster project delivery capabilities. Engagement with local communities remains a priority, with recent sessions held to discuss employment and procurement opportunities, reinforcing West Wits’ commitment to inclusive development.

Looking Ahead

West Wits is poised to enter a critical execution phase, targeting first ore production and gold pour in the coming quarters. The company aims to ramp up steadily to a steady-state production of 70,000 ounces per annum over a 12-year mine life. Meanwhile, longer-term ambitions under the Project 200 initiative seek to scale production to approximately 200,000 ounces annually by incorporating additional orebodies and infrastructure. Discussions continue on advancing the Mt Cecilia project in Western Australia, signaling a broader growth strategy.