West Wits Mining (ASX:WWI) has returned an updated Definitive Feasibility Study (DFS) for Qala Shallows within the Witwatersrand Basin Project in Johannesburg, South Africa.
The company says the study delivered “positive” results, increasing its gold production by 2.2% to turn out 944,000 ounces over a 16.8 year mine life.
Qala Shallows has seen a 58% increase to its revenue value, now sitting at US$2.7 billion ($4.12 billion), with gold produced at the prospect marked at US$1,289 per ounce all-in-sustaining-cost.
The project will hit peak funding, returning US$44 million within 2.6 years of production with an eight month payback period to follow.
Driving the revenue increase, the DFS suggests the 14.3% increase to cost to produce gold is directly linked to the growing demand.
ABC Bullion reports the spot price of the commodity at US$3,427.11 per ounce as of 23 July.
The DFS has also bolstered Qala Shallows’ ore reserves to 4.6 million tonnes @ 2.6 grams per tonne for 383,900 ounces of gold, representing a 9.3% increase.
West Wits, which has a market capitalisation of $65.94 million, involved privately held Bara Consulting to expedite the DFS.
Managing Director Rudi Deysel says the updated study reinforces the greater project’s value and economic fundamentals.
“Notably, the peak funding requirement and payback period have reduced, while free cash flow has surged by US$461 million — an 88% uplift — bringing total projected free cash flow to US$983 million,” Deysel says.
“With the benefit of a stronger gold price environment, the project’s valuation continues to strengthen, providing shareholders with increased confidence in Qala Shallows’ capacity to deliver strong sustained returns which is highlighted by a post-tax internal rate of return of 81%.”
West Wits is a precious and base metals producer with assets in South Africa and Australia.
Write to Maddison Elliott at Mining.com.au
Images: West Wits Mining
