West Wits Mining Ltd (ASX:WWI, OTCQB:WMWWF) is a major step closer to securing financing to develop its Qala Shallows Gold Project, Phase 1 of the Witwatersrand Basin Project in South Africa, and get the project into production.
The company has been pursuing a joint syndicated senior debt loan facility with a South African Development Finance Institution (DFI) and a commercial bank.
This loan, if approved, could provide 50-60% of project funding for Qala Shallows with the balance funded through new equity and revenues generated during the development process.
“Securing this facility will provide the majority of funding for this exciting project on non-dilutive, cost-effective bank loan terms and the strongest foundation to now complete our funding requirements and move quickly to commence work on getting Qala Shallows into production,” West Wits chairman Michael Quinert said.
Final credit approval secured
Following a due diligence process including technical, environmental and legal aspects, the commercial bank has secured final credit approval to provide half of the senior debt loan facility.
This is subject to the DFI providing the balance, the conclusion of definitive loan documentation and the fulfilment of conditions precedent.
The DFI is working through its approval process and a decision is expected soon.
Options being considered
In anticipation of securing this senior debt loan facility, West Wits has been examining a range of options to procure the balance of funds required to ensure Qala Shallows is fully funded to positive cashflow.
The company expects to finalise its plans in this regard and update the market in the “near term”.
Development of the Qala Shallows could create over 1,000 direct jobs in South Africa, providing substantial benefits to the local community and be a key driver of local economic development over the 18-year life of mine.