West Wits starts mining underground ore at Qala Shallows

• West Wits delivers first underground ore from Qala Shallows gold project to stockpile, marking start of production
• Company targeting 30,000t ore stockpile by end Q1 2026 with gold processing expected to begin same quarter
• Project well funded with $17.7m capital raising and loan facilities of about US$62.5m in place

Special Report: West Wits Mining has achieved a major milestone with the first delivery to the stockpile of underground ore from the Qala Shallows gold project in South Africa’s Witwatersrand Basin.

This marks the start of underground ore production and follows the successful commissioning of critical underground infrastructure.

West Wits Mining (ASX:WWI) is looking to build a 30,000t ore stockpile by the end of Q1 2026 with first gold processing expected to start during the same quarter.

Ore from the project will be processed through Sibanye-Stillwater’s Ezulwini processing plant under a toll treatment agreement at a constant monthly rate of 15,000t to 20,000t as output builds to a steady-state rate of 65,000t within three years.

Under the definitive feasibility study, Qala Shallows will produce 70,000oz of gold per annum for 12 years to generate US$2.7bn in revenue.

Free cash flow is estimated at US$983m while post-tax net present value and internal rate of return, both measures of profitability, are estimated at US$500m and 81% respectively.

This is hugely conservative as it is based on a gold price of US$2850/oz, well below the current spot price of ~US$4165/oz.

WWI is well capitalised following a $17.7m raise in September and separate agreements for a US$12.5m Nebari loan facility and a ~US$50m syndicated loan facility in place, sufficient to cover the estimated peak funding of US$44m needed to fully support the transition into production and ramp-up.

“This marks a transformational step for West Wits — the beginning of true underground mining at Qala Shallows,” chief executive officer Rudi Deysel said. 

“With our first ore delivered to surface and on-reef development now underway, we’ve crossed the threshold into production, demonstrating the strength of our execution and the commitment of our team. 

“The progress achieved by our team since mobilisation in July is exceptional. Supported by a strong funding position and robust infrastructure, we are firmly on track to establish a longlife gold operation within the renowned Witwatersrand Basin.”

Recent progress

In recent months, underground development at Qala Shallows has progressed on schedule, with key milestones achieved.

This includes completion of a full-length engineered concrete haul road through the box-cut capable of supporting heavy haulage and formal water management systems to support continuous ore movement and safe operations.

The first underground double boom drill rig has also been delivered, commissioned and is operational while cover drilling has been completed, underground communications commissioned and decline lighting installed.

Operational ramp-up is underway with full staffing of key technical roles and start of night-shift operations to accelerate production.

Support drilling is active along the 1 West and Main Declines, and face drilling initiated at the 1 East Decline.

These activities mark the start of full-scale underground development, transitioning Qala Shallows from early-stage handheld operations to mechanised production.

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.