West Wits Mining Ltd (ASX:WWI, OTCQB:WMWWF) has received a big shot in the arm for its aim to restart gold production from the Qala Shallows Project in South Africa on receiving a written expression of interest and indicative funding terms from the Industrial Development Corporation of South Africa (IDC).
The IDC has expressed interest in providing a debt facility of ZAR300 million (approximately US$15.9 million) for development capital at the project, which is part of the company’s broader Witwatersrand Basin Project (WBP) near Johannesburg.
Strong show of confidence
This proposed funding package provides West Wits with a strong show of confidence in the Qala Shallows project and the overall WBP from the prominent development finance institution, which is committed to driving economic growth and industrial development in South Africa.
Collaboration between West Wits and the IDC aims to expedite the due diligence process and secure final approval of terms and conditions by the IDC's Executive Credit Committee.
“Confidence in our vision”
West Wits chairman Michael Quinert said, “Today, we are delighted to share the news of the IDC’s interest in providing a debt facility for our Qala Shallows project.
"This is a testament to the immense potential and confidence in our vision for the Witwatersrand Basin Project.
"With this formal expression of interest and terms, we can now proceed to expedite the due diligence process, secure final approval and embark on a transformative journey.
"This milestone validates our unwavering commitment to growth, innovation and sustainable success."
About Qala Shallows
Qala Shallows is the first stage of the WBP and is initially focused on the development of the Kimberley Reef, one of three reef packages that form part of West Wits’ Mining Right area in the Witwatersrand Basin. The other two are Bird Reef and Main Reef.
The combination of existing infrastructure and accessible shallow mineral resources allow access for production on a fast-tracked timeframe relative to most global opportunities for underground gold mining.
In October 2022, West Wits secured a cost-effective toll treat agreement with Sibanye-Stillwater’s subsidiary.
Operational readiness
The company continues to sustain a state of operational readiness at Qala Shallows, maintaining established mine infrastructure and legal appointments to enable the restart of mining operations upon West Wits securing project finance.
West Wits said that the provision of funding on the terms indicated by the IDC would provide the foundation for funding the entire development plan as contemplated in the definitive feasibility study (DFS).
Use of funds
Initial funds would be utilised for mobilising the mining contractor and acquiring essential equipment to initiate operations, enabling West Wits to establish a 30,000-tonne ore stockpile, facilitating a steady delivery of 15,000 tonnes per month to Sibanye-Stillwater’s plant.
West Wits expects that within a timeline of six to eight months from the start of production, the project will generate revenues from gold production.
This development represents a major milestone for West Wits, paving the way for accelerated progress and unlocking the full potential of the Qala Shallows project.
Next steps
Next steps for West Wits at Qala Shallows are:
- Completion of the due diligence process by the IDC;
- Finalisation of terms and pre-conditions to enable activation of the facility including documentation and provision of security;
- Upon drawdown, initiation of mobilisation of the mining contractor and initial equipment required for operations;
- Building up a 30,000-tonne gold ore stockpile to enable consistent 15,000 tonnes per month gold ore delivery to Sibanye-Stillwater’s plant;
- Targeting achievement of the stockpile and delivery within six to eight months; and
- Gradual mine build-up towards a steady-state production of 5,000 ounces of gold per month.
About the IDC
With a mandate to support industries and enterprises that contribute to job creation, technology advancement and competitiveness in South Africa, the IDC focuses on sectors such as mining, manufacturing, agri-processing, infrastructure development and more.
Committed to advancing South Africa's industrial base, the IDC actively seeks opportunities to foster innovation, promote entrepreneurship and address key developmental challenges.