With production in full swing at its recently restarted Sol Plaatje project in South Africa, cash-strapped gold minnow West Wits Mining is on the verge of generating much-needed cashflow.
The Victorian company (ASX:WWI), which has only $200,000 in the bank, will use the cashflow from Sol Plaatje to progress open cut opportunities, build production and explore key targets to expand its 1.374 million ounce resource.
The project, located within the Soweto Cluster Gold Project, restarted in June.
Under a deal reached last month, South African gold major Sibanye Gold will process reef material from Sol Plaatje through the Ezulwini gold process plant. Reef material is gold still contained in its original host rock. It’s also known as primary gold.
West Wits will truck ore from its project to the nearby Ezulwini plant 40 km away.
West Wits reports that 6,695 tonnes have now been processed at Ezulwini with 5,600 tonnes invoiced, 7,600 tonnes stockpiled and 14,295 tonnes extracted.
The first batch of 5,600 tonnes will generate around $340,000. The bulk of this money will be paid by Sibanye at the end of this month with a further payment following two weeks later.
Monthly ore tonnage should be in the range of 10,000 to 15,000 tonnes.
At the minimum production rate of 10,000 tonnes, West Wits believes the project will generate surpluses of $260,000 to $290,000 per month — of which 60 per cent will go into West Wits’ bank account.
“With Sol Plaatje now in full swing and cashflow to begin shortly the Company can now turn its attention to further open cut opportunities to enhance its current production as well as re-starting its exploration program in order that we may continue to build the Company’s JORC statement from the current 1.374 million ounces,” West Wits chairman Michael Quinert said.
JORC compliance refers to the mining industry’s code for reporting exploration results, mineral resources and ore reserves, managed by the Australasian Joint Ore Reserves Committee.
Shares in West Wits remain steady at 1.8c in early trade today.