West Wits Mining has achieved a major underground breakthrough at Qala Shallows, unlocking higher-grade ore zones, while completing a comprehensive ZAR 1.115 billion finance package that underpins its production ramp-up.
- 1 West Decline breakthrough opens access to higher-grade stopes
- Full project finance package of ZAR 1.115 billion secured
- Early gold production reaches 7.05kg year-to-date
- Mt Cecelia divestment agreed with Aventine Resources
- Expanded Project 200 Scoping Study targets 200,000oz annual output
Breakthrough at Qala Shallows Accelerates Production
West Wits Mining Limited (ASX:WWI) marked a pivotal moment in its Qala Shallows gold project during the June 2026 quarter by achieving the 1 West Decline breakthrough. This milestone unlocks access to historically pre-developed stoping areas on the 2 Level, allowing the company to transition from early-stage, lower-grade on-reef development ore to higher-grade production zones with minimal additional development. The breakthrough effectively saves about a year of underground development, accelerating the path toward the DFS-modeled steady-state production of approximately 70,000 ounces per annum.
Underground development advanced by 544 metres in the quarter, split between 375 metres of on-reef development and 168 metres of waste development, with ore deliveries to Sibanye Stillwater’s Ezulwini Plant yielding 4.6 kilograms (148 ounces) of gold for the quarter and 7.05 kilograms (227 ounces) year-to-date. The operational ramp-up is supported by a strengthened underground fleet, including two new 10-tonne LHDs and a third jumbo drill rig, enhancing mining flexibility and capacity.
Comprehensive Project Financing Package Finalised
West Wits completed a full project finance package totaling ZAR 1.115 billion (~A$105 million) with South African banks Absa and Nedbank CIB. The package comprises a ZAR 875 million Senior Loan Facility for project development and ramp-up, a ZAR 150 million Working Capital Facility to fund production cycles, and a ZAR 90 million Cost Overrun Debt Facility as a contingency buffer. This institutional backing from leading lenders provides a lower-cost, longer-tenure capital structure and replaces earlier bridge funding.
Crucially, the company fully repaid its USD 12.5 million Nebari loan facility during the quarter, clearing the way for financial close of the senior loan and reducing financing costs during the production ramp-up phase. The working capital facility draws against verified gold sales invoices, improving cash flow efficiency without diluting equity. Hedging arrangements protect 50% of planned gold sales through a put option program, preserving upside exposure amid current gold prices exceeding USD 3,500 per ounce.
Portfolio Rationalisation and Growth Initiatives
In a strategic move to focus resources on Qala Shallows, West Wits agreed to divest its Mt Cecelia Project in Western Australia to Aventine Resources Limited. The deal includes $2 million in Aventine equity, a 1% net smelter royalty with a buy-back option, and up to $1 million in milestone payments contingent on resource definition. This transaction eliminates ongoing capital obligations for Mt Cecelia while retaining exposure to its exploration upside through equity and royalties, allowing West Wits to concentrate on its South African operations and growth strategy.
Meanwhile, the company expanded the scope of its Project 200 Scoping Study to evaluate multiple development and processing scenarios across the Witwatersrand Basin Project, including standalone processing plants and third-party partnerships. The study aims to identify a viable pathway to approximately 200,000 ounces per annum, nearly tripling the current DFS target and potentially reshaping West Wits into a mid-tier gold producer. Results are expected by early August 2026.
Community Engagement and Safety Updates
West Wits advanced its sustainability and community initiatives by launching a Food Vendor Project to foster local enterprise and hosting a Terms of Reference Workshop with local government economic development forums to establish transparent engagement frameworks. The company also strengthened its executive leadership with the appointment of Sephela Makete Thema as Head of Operations, bringing extensive experience from previous senior roles at Sibanye-Stillwater.
Tragically, a mud rush incident in June resulted in a contractor fatality. West Wits has extended condolences and cooperated fully with South African regulators. The investigation concluded with no adverse findings or operational restrictions, allowing mining activities to continue uninterrupted.
Financial Position and Outlook
West Wits ended the quarter with approximately A$32 million in cash and access to undrawn financing facilities, supporting ongoing underground development and surface infrastructure, which is 45% complete. The company is on track to connect to grid power by early 2027, expected to reduce diesel fuel consumption and operating costs significantly.
The Witwatersrand Basin Project’s global JORC Mineral Resource Estimate remains robust at 7.24 million ounces at 4.0 grams per tonne gold, underpinning the company’s development plans and financing. As West Wits advances towards steady-state production, the market will be watching closely for the Project 200 study outcomes and production ramp-up metrics.
Bottom Line?
West Wits’ operational milestone and secured financing set the stage for a potential production leap, but the market awaits clarity from the expanded Project 200 study and ongoing ramp-up execution.
Questions in the middle?
- Will the expanded Project 200 Scoping Study confirm a viable path to 200,000oz annual production?
- How will West Wits manage operational risks following the fatal mud rush incident?
- What impact will the Mt Cecelia divestment have on capital allocation and exploration focus?