Updated West Wits DFS shows Qala Shallows is a golden prize

• West Wits Mining’s updated DFS for Qala Shallows shows the project continues to strengthen 
• The asset will generate US$2.7bn in revenue, an increase of US$983m from a 2023 study 
• West Wits continues to progress constructive discussions with lenders and prospective funders to finalise optimum funding mix 

Special Report: West Wits Mining’s Qala Shallows project in South Africa is more compelling than ever after an updated definitive feasibility study drastically improved its financials.

Under the base case, the project is expected to generate US$2.7bn in revenue – an increase of US$983m from the original 2023 study – and free cash flow of US$983m (up 88%).

Post-tax net present value increased by 97% to US$500m.

Meanwhile, internal rate of return now sits at 81%, up from 53% in the 2023 study.

Adding interest for West Wits Mining (ASX:WWI), peak funding has been reduced from US$54m over a three-year period to US$44m over a 2.6 year period while the payback period from the end of the peak funding period has dropped from 13 months to eight months.

Steady-state production of 70,000oz per annum has increased from nine years to 12 years while overall production is now 944,000oz over a mine life of 16.8 years.

All in sustaining costs for Qala Shallows – part of the broader Witwatersrand Basin project –has increased US$977/oz to US$1289/oz, with 14.3% of the increase linked to the higher gold price assumption of US$2850/oz from US$1850/oz in 2023.

Compelling outcome

Managing director Rudi Deysel said the updated DFS delivered a compelling outcome by reinforcing Qala Shallows’ robust value and strong 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,” he added. 

“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 IRR of 81%. 

“We remain focused on advancing the Witwatersrand Basin project and unlocking its full potential.”

The updated study uses a new gold price (US$2850/oz) and an exchange rate of ZAR18 to US$1 based on current Bloomberg consensus forecasts.

This is still hugely conservative when compared to the current spot gold price of over US$3300/oz.

The World Gold Council last week suggested that even in a bear case, gold had ‘natural support’ at US$3000/oz.

Additionally, the updated mine plan is based on a 1.31g/t lower cut-off grade, which is warranted given the higher gold price environment compared to the 2023 DFS.

This has facilitated a 9.3% increase to the ore reserve, which now sits at 4.6Mt at 2.6g/t for 383,900oz of contained gold, as well as an accelerated and increased production profile as more ore is available for inclusion.

Next steps

WWI continues to progress constructive discussions with lenders and prospective funders to finalise the optimum funding mix to develop Qala Shallows.

The company has already executed definitive agreements for a senior syndicated loan facility (“Facility”) of up to ZAR 875 million (~US$50 million) and raised $14m through a placement in June 2025 to start mobilisation for pre-production works.

It will also continue equipment purchases and mobilisation of contractors, build up a 30,000t ore stockpile to enable consistent gold ore delivery to Sibanye-Stillwater’s plant for processing.

Additionally, the company will focus on a gradual mine build-up towards a steady-state production of 5700oz of gold per month.

This article was developed in collaboration with West Wits Mining, a Stockhead advertiser at the time of publishing. 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.