‘World class and undervalued’: West Wits attracts $15.7m from cornerstone US investor to fast-track 924koz Qala Shallows gold development
Long time investor Wingfield Partners has expressed formal interest in providing US$10m funding to help develop West Wits’ Qala Shallows project, which it calls “a world class gold asset dramatically undervalued by the market”.
West Wits Mining (ASX:WWI) is proving up its 4.28Moz Witwatersrand Basin project in South Africa, with the first cab off rank being the 924,000oz Qala Shallows development.
A recent update to its DFS highlighted an impressive increase of US$284m (105%) in free cashflow and an increase in gold production from 43,000ozpa to 51,000ozpa over 17.7 years with steady state production at 70,000 oz pa for 9 years.
Qala Shallows is expected to generate revenues from gold production within six to eight months from the commencement of production.
On the back of a major $24.5m financial indicative loan sum from the Industrial Development Corporation of South Africa (IDC), West Wits has now attracted funding terms for a US$10m debt facility from Wingfield Partners LLC, a Houston-based investor group and WWI’s largest shareholder.
The indicative terms underscores Wingfield’s ongoing and unwavering support for West Wits over the last (almost) four years and advances the process of funding the entire development plan for Qala Shallows.
As part of these arrangements, and subject to formal activation of the proposed loan facility, West Wits will also allot to Wingfield and/or its nominees a total of 400 million options to acquire one ordinary share at an exercise price of A$0.015 (1.5 cents) each expiring 5 years from the date of issue.
“The Wingfield team has always appreciated the significant value opportunity represented by Qala Shallows and the broader Witwatersrand Basin project,” West Wits Chairman Michael Quinert says.
“Wingfield’s unwavering belief and its standing as a canny investor has combined to provide West Wits with the opportunity to raise its profile now substantially with key players within the Houston investment community.”
This funding, in conjunction with that contemplated under the earlier IDC expression of interest, would bring loan facilities to some US$26 million or almost 50% of the total funding requirements over the 3 years build-up phase of the project.
Wingfield intends to work in cooperation with the IDC due diligence process to expedite completion and progress to binding terms.
The Wingfield letter is an important and significant step towards securing the funding goals to realise the full potential and value of the Qala Shallows project.
Wingfield managing partner Scott Kell says the investment group first invested in West Wits at the start in 2020.
“More than ever, we continue to believe that West Wits has a world class gold asset which is dramatically undervalued by the market,” he says.
“Through this new and substantial investment, we, along with others, such as the IDC, look forward to working alongside the company to reach its full potential, which, as a major producing gold asset will benefit shareholders and the local community”.
This article was developed in collaboration with West Wits, 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.