West Wits locks in power, water for low cost 924koz Qala Shallows gold mine
West Wits Mining’s Qala Shallows asset has secured critical water access, with the company also having negotiated an advanced power supply deal for its low capex, high-grade and easy-to-mine South African gold project.
West Wits Mining (ASX:WWI) is located in the prolific Witwatersrand, a geological formation that holds the world’s largest known gold reserves and has produced over 1.5 billion ounces.
That’s ~22% of all the gold accounted for above the surface of the earth.
There’s plenty more where that came from, with WWI itself already proving up 4.28Moz at an ore grade of 4.58g/t at its wider Witwatersrand Basin Project.
The first development cab off the rank for WWI is the 924,000oz Qala Shallows zone.
WWI has reached an agreement with Calgro M3 Developments to secure potable water provisions for the Qala Shallows Mine, guaranteeing water supply for the project.
The pipeline is now fully constructed, accessible, and conveniently proximate to the mine site, further mitigating the execution risk associated with the project’s timeline, WWI says.
The mine developer has also negotiated power supply from Joburg City Power for a 7.5MVA throughput to the mine site, providing significant cost advantages that will likely reduce overall operational costs.
WWI says a focus on cost-effective infrastructure and nurturing strong relationships with local communities and stakeholders will be key to consistent production and returns for investors.
A recently updated DFS on Qala Shallows upped the resource by 38% to 924,000oz of contained gold, as well as tipping an increase in annual gold production from 43,000ozpa to 51,000ozpa and gold grades from 2.98g/t to 3.04g/t.
Commenting on the DFS update, WWI chair Michael Quinert says delivering a larger gold project “sets the scene for us to deliver a substantially larger gold project”.
“The project’s potential is evident in the updated financial metrics. With an impressive increase of US$254 million (95%) in free cashflow, the project is set to generate US$522m,” Quinert says.
“These figures emphasise the project’s value and its potential to deliver substantial returns to our shareholders.
“There is good reason to be excited about the future prospects of the Witwatersrand Basin Project.”
Qala Shallows is expected to generate revenue from gold production within six to eight months from commencement.
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.