West Wits Raises $17.5M at 14.9% Discount to Accelerate Gold Production
West Wits Mining has raised $17.5 million through a discounted share placement to accelerate gold production at its flagship Qala Shallows project in South Africa. This capital injection, alongside existing loans, positions the company to advance toward steady-state output.
- Placement raises $17.5 million at $0.04 per share, a 14.9% discount
- Funds to accelerate development and production at Qala Shallows
- Qala Shallows project targets 70,000 ounces of gold annually over 17 years
- Combined with $62.5 million in existing loans, balance sheet strengthened
- Shares to settle on 18 September and trade on ASX from 19 September
Capital Raising to Accelerate Production
West Wits Mining Limited (ASX – WWI) has successfully secured A$17.5 million through a placement of 437.5 million new shares priced at A$0.04 each. This represents a 14.9% discount to the recent closing price, reflecting the company’s urgency to fund the next phase of its flagship Qala Shallows gold project in South Africa’s prolific Witwatersrand Basin.
The placement attracted strong demand from institutional and professional investors both domestically and internationally, underscoring confidence in West Wits’ growth strategy. The funds raised will be combined with existing cash reserves and substantial loan facilities, including a ZAR875 million (~US$50 million) loan from IDC/Absa and a US$12.5 million tranche from Nebari, to finance mine development, operating costs, and general working capital.
Qala Shallows – A Long-Life Gold Producer
The Qala Shallows project is the first stage of the broader Witwatersrand Basin Project, boasting a Definitive Feasibility Study (DFS) that outlines a 17-year life of mine with an ore reserve of 4.6 million tonnes at 2.60 grams per tonne, equating to nearly 384,000 ounces of gold. The project aims for a steady-state production rate of 70,000 ounces per annum over 12 years, positioning West Wits as a sustainable gold producer in one of the world’s most historic gold regions.
West Wits has a toll treating agreement with Sibanye-Stillwater, allowing ore processing without the need for immediate capital-intensive infrastructure. The company plans to build a stockpile and ramp up ore deliveries gradually to reach a steady monthly output, supporting the targeted annual production.
Strategic Implications and Market Position
Chairman Michael Quinert highlighted the placement as a pivotal milestone, enabling West Wits to accelerate development and unlock the full potential of the Witwatersrand Basin Project. The strengthened balance sheet and diversified funding sources reduce financial risk and provide a clear runway toward production commencement.
However, the discounted placement price may exert short-term pressure on the share price, and the company’s ability to meet production targets will depend on successful project execution and ongoing financing arrangements. Investors will be watching closely as West Wits transitions from development to production.
Bottom Line?
West Wits’ capital raise sets the stage for a critical production ramp-up, but execution risks remain as the company moves toward delivering on its gold output promises.
Questions in the middle?
- How will the market respond to the placement discount and potential share dilution?
- What are the key operational milestones and timelines for Qala Shallows production ramp-up?
- How secure and flexible are the existing loan facilities in supporting future project stages?
