West Wits Mining Ltd (ASX:WWI) has secured a cost-effective toll treatment agreement for its ore with Ezulwini Mining Company, a subsidiary of Sibanye-Stillwater Ltd for the Witwatersrand Basin Project (WBP) in South Africa.
This partnership is a mutually beneficial venture, supplying Ezulwini with about 15,000 tonnes of gold-bearing material per month for starters, before increasing to peak production of 54,000 tonnes per month within three years.
Securing the agreement further de-risks the WBP for West Wits, which is advancing debt funding initiatives with the corporate advisory firm, Taurum International.
Moving forward, West Wits is restarting mining operations for a rapid production ramp-up planned for the March quarter of 2023 as part of a formal mine plan under the recently updated definitive feasibility study (DFS).
Catalyst to ramp up development
West Wits managing director Jac van Heerden said: “Securing a tolling treatment agreement with a subsidiary of major mining house, Sibanye-Stillwater, after extensive negotiations gives great confidence in the WBP’s project credentials and provides the catalyst to ramp up development.
“In March this year we paused our mining operations at the WBP with the objective to rearrange our mining and equipment supply contracts, with these initiatives completed June 2022.
“Operationally, we have completed all essential infrastructure and established access to the ore body face, ready to commence mining.
“The toll treatment agreement has now provided the green light to proceed with the primary debt funding initiative to secure project finance and execute West Wits' development strategy.”
Funding process
Finalisation of this toll treatment arrangement is a key step towards completing the phase one Qala Shallows WBP funding process.
West Wits intends to fund the WBP through a combination of traditional debt and equity markets and its appointed corporate advisory firm, Taurum International.
Taurum will kick off a debt-raising process to secure the debt-funding component of the project funding.
The company anticipates the primary funding options to be significantly advanced by the end of this quarter.
Consequently, this would enable West Wits to mobilise mining equipment and the mine contractor’s workforce in the March quarter to execute the revised definitive feasibility study.
The plan is to build up a stockpile of up to about 30,000 tonnes and to start delivering the ore to Sibanye-Stillwater at a constant rate of 15,000 tonnes per month before building to 20,000 tonnes and 54,000 tonnes peak production within three years.