Barry FitzGerald writes his legendary Garimpeiro resources column weekly for Stockhead

The jury is still out on whether the Pilbara region of Western Australia will ever give rise to a lasting gold mining operation based on conglomerate material like that mined for more than 120 years in South Africa’s fabled Witswatersrand Basin.

ASX investors wanting conglomerate gold exposure can nevertheless get their fix in a little thing called West Wits Mining (ASX:WWI) — as long as they are prepared to settle for the real-deal Witswatersrand stuff, that is.

As it names suggests, West Wits’ conglomerate gold push is in the Witswatersrand where gold-bearing conglomerate horizons have yielded 40 per cent of all the gold ever mined.

Last year’s Pilbara conglomerate gold rush drew analogies with the Witswatersrand but not much has come of the frenzy.

West Wits in the meantime is focused on the western end of the historical Central Rand goldfield which lies between Johannesburg to the north, and Soweto to the south.

Mines across the 55 km east-west stretch of the Central Rand have produced 247 million ounces of gold over the years, with 41 million oz alone coming from six conglomerate reefs or beds on WWI’s two adjoining leases on the western end.

West Wits executive director Andrew Tunks acknowledges that most people can’t believe that after giving up 41 million oz that there is any gold left to mine. “Well that’s very wrong,’’ he told Garimpeiro this week.

West Wits Mining shares (ASX:WWI) over the past year
West Wits Mining shares (ASX:WWI) over the past year

As it is, West Wits is currently mining surface material that was ignored by the old-timers who chased the conglomerate beds to depths measured in multiple kilometres. It is small scale stuff but is netting West Wits about $140,000 a month.

The cash flow is helping fund the main event at its Central Rand project – returning it to the mining of the conglomerates at an annual rate of 100,000 oz a year from the existing underground workings, and by toll treatment of the material at nearby plants owned by others.

That West Wits has a lot of work to do to make its ambition a reality is reflected in the company’s 2c share price for a market cap of $14 million.

But it has to be remembered that the project was a 100,000 oz a year producer up until the day its doors were closed in a hurry 2000 by the previous owner, South Africa’s DRD Gold. That was the year gold got as low as $US272 an oz and everybody was hurting.

West Wits acquired the project from DRD in 2007 in a share deal, with DRD continuing its presence on the register with a 6.7 per cent stake.

Long and rich history

The beauty of the long and rich mining history on the West Wits ground is that there is a massive data base to work from, as well a complex of shafts, inclines and underground development headings that will not have to be repeated.

“All we are doing is going back and ‘mining’ the data and our capital cost of getting back in to production is going to be minimal,’’ Tunks said.

It means also that there is no need for exploration in the traditional sense as mining schedules from when the project was a 100,000 oz producer remain to be acted on.

West Wits recently upgraded the global resource estimate at the project by 428,000ozs to 3.67m oz.

It included an updated 1.24m oz estimate for the Kimberly East reef system which is the initial target for the company’s plan to eventually recommence underground mining operations, subject to a mining right application being granted in mid-2019 among other things.

We told you about Carnarvon Petroleum

Life has been good to Carnarvon Petroleum (ASX:CVN) boss Adrian Cook in the last couple of years.

His beloved Western Bulldogs broke a 62 year drought to win the 2016 AFL premiership flag, and now Carnarvon has notched up one of the best Australian oil discoveries in recent times.

The stock put on 57% to 27.5c on news of the Dorado 1 oil discovery which compares with the 14.5c it was trading at back in April when Garimpeiro highlighted the exploration program was imminent.