West Wits Mining (ASX:WWI) has received written expression of interest and indicative funding terms from the Industrial Development Corporation (IDC) of South Africa regarding the company’s Qala Shallows, part of the Witwatersrand Basin Project (WBP) in Johannesburg.
The IDC of South Africa has expressed interest in providing a debt facility of ZAR300 million (about US$15.9 million) for development capital at Qala Shallow. The proposed funding package aligns with customary conditions for loan facilities, which West Wits says showcases the IDC’s confidence in the project and the overall Witwatersrand Basin Project.
West Wits, which has a $26.91 million market capitalisation, is now seeking to complete the due diligence process by the IDC, as well as finalise the terms and pre-conditions to enable activation of the facility including documentation and provision of security.
Upon drawdown, initiation of mobilisation of the mining contractor and initial equipment required for operations.
West Wits will also look to start building up a 30,000-tonne gold ore stockpile to enable consistent 15 kilotons per month (ktpm) gold ore delivery to Sibanye-Stillwater’s plant. The company is also targeting achievement of the stockpile and delivery within 6 to 8 months.
It is also seeking gradual mine build-up towards a steady-state production of 5,000 ounces of gold per month.
West Wits started early works at Qala Shallows in September 2021. The company says information gathered on underground inspections has advanced knowledge of the ore body and motivated a review and update of the DFS in 2022 and the further update due for release soon.
The early works delivered surface infrastructure and refurbishment of historical underground workings. In October 2022, West Wits secured a cost-effective toll treat agreement with Sibanye-Stillwater’s subsidiary.
The company continues to sustain a state of operational readiness at the Qala Shallows project, maintaining established mine infrastructure and legal appointments which will enable the recommencement of mining operations upon West Wits securing project finance.
West Wits says it is important to note that, as announced on 20 June 2023, Bara Consulting is currently conducting a thorough review and update of the Qala Shallows DFS. The company anticipates that this review will result in material improvement to the revised DFS outcomes.
The updated report is expected to be released in July 2023.
Addressing the potential financing, West Wits Chairman Michael Quinert says: “Today, we are delighted to share the news of the IDC’s interest in providing a debt facility for our Qala Shallows project. This is a testament to the immense potential and confidence in our vision for the Witwatersrand Basin Project.
With this formal expression of interest and terms, we can now proceed to expedite the due diligence process, secure final approval, and embark on a transformative journey. This milestone validates our unwavering commitment to growth, innovation, and sustainable success.”
“This milestone validates our unwavering commitment to growth, innovation, and sustainable success”
With a mandate to support industries and enterprises that contribute to job creation, technology advancement, and competitiveness, the IDC focuses on sectors such as mining, manufacturing, agri-processing, infrastructure development, and more.
Committed to advancing South Africa’s industrial base, the IDC actively seeks opportunities to foster innovation, promote entrepreneurship, and address key developmental challenges. The provision of funding on the terms indicated by the IDC would provide the foundation for funding the entire development plan as contemplated in the DFS.
Qala Shallows is the first stage of the WBP and focused on the development of the Kimberley Reef, which is one of 3 reef packages (the others are Bird Reef and Main Reef) that form part of West Wits’ mining right area in the Witwatersrand Basin. The combination of the existing infrastructure and accessible shallow mineral resources allow access for production on a fast-tracked timeframe relative to most global opportunities for underground gold mining.
Write to Adam Orlando at Mining.com.au
Images: West Wits Mining Ltd