West Wits Mining Ltd (ASX:WWI, OTCQB:WMWWF) has secured a written expression of interest and indicative funding terms from Wingfield Partners to provide a debt facility of US$10 million (~A$15.7 million) to finance the Qala Shallows Project, the first operation at the company’s Witwatersrand Basin Project in Johannesburg, South Africa.
Houston, Texas based Wingfield, which is West Wits’ largest shareholder, has assembled a consortium of Texas based investors to provide this facility.
These investors include high net worths and family offices, professional wealth managers and private equity sources the participation of whom will act to significantly raise West Wits’ USA profile and broaden its investor reach.
Read: West Wits Mining achieves key milestones in water and power infrastructure at Qala Shallows in South Africa
West Wits chairman Michael Quinert said: “I am thrilled to receive these indicative terms from Wingfield, our largest and strongly supportive shareholder.
“The Wingfield team has always appreciated the significant value opportunity represented by Qala Shallows and the broader Witwatersrand Basin Project.
“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.
“I would like to thank Wingfield and, in particular, Scott Kell, for their ongoing support”.
“West Wits has a world class gold asset”
Wingfield managing partner Scott Kell said: “We first invested in West Wits at the start of 2020 and, more than ever, continue to believe that West Wits has a world class gold asset which is dramatically undervalued by the market.
“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”.
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 allotment of these options, in conjunction with the loan facility, provide a mechanism for Wingfield’s investor group to take up a direct investment into the listed entity whilst providing further capital to advance the Qala Shallows Project.
This development further advances the process of funding the entire development plan for Qala Shallows as contemplated in the updated Definitive Feasibility Study (DFS).
Read: West Wits Mining boosts Qala Shallows' core gold stats in revitalised DFS
This funding, in conjunction with that contemplated under the earlier Industrial Development Corporation (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.
IDC has expressed formal interest in providing loan funds of ZAR300 million (~US$15.9 million) for development capital for the Qala Shallow Project.
Read: West Wits Mining welcomes interest from IDC for “transformative” Qala Shallows debt facility
This endorsement from the IDC, a prominent development finance institution committed to driving economic growth and industrial development in South Africa, highlights the potential of West Wits’ project.
Next steps
- Wingfield and the IDC's successful completion of the due diligence procedures;
- upon approval, the commencement of preparations for the mining contractor's mobilisation and the acquisition of initial operational equipment;
- establishing a robust 30,000-tonne gold ore stockpile to facilitate a steady monthly delivery of 15 ktpm to Sibanye-Stillwater's plant;
- aiming for the stockpile's completion and delivery accomplishment within a timeframe of six to eight months; and
- a phased mine expansion, progressively leading to a stable production rate of 5,000 ounces of gold per month.