West Wits received formal communication from South Africa’s Director-General of the Department of Mineral Resources and Energy on 19th July 2021 that the Company’s mining right application was granted in terms of section 23(1) of the Mineral and Petroleum Resources Development Act, 2002 (Act 28 of 2002). The Department’s decision to grant West Wits’ mining right is a pivotal milestone that heralded in the development of the WBP.
An independent scoping study was carried out by the highly regarded South African mining services firm, Bara Consulting, with results received in July 2020. The study confirmed the Company’s view that WBP offers multiple areas for mining, identifying five distinct areas which enable staged development.
The CAPEX profile to recommence mining is expected to be low due to the existing historical infrastructure and planned toll treatment.
A key objective of the independent scoping study was to provide an assessment of the mining potential over the whole project area. The study confirmed the project’s distinct positive investment parameters which de-risks the project.
Scoping Study and Production Target
The Scoping Study results announced in August 2021 firmly established the WBP’s potential to progress into a long-term gold mine. The results outlined an average steady-state annual production of 80,000oz for 18 years and a 22-year Life-of-Mine. The results also indicated that WBP has the potential to build up to a peak production rate of over 95,000 oz per annum. The Scoping Report outlined a production target which averages 90,000oz from Year 6 – 11, as production reaches steady-state from the Qala Shallows, Main Reef package and Bird Reef East areas.
Five distinct mine stages were identified for the project:
Stage 1: Qala Sallows; Stage 2: Main Reef; Stage 3: Bird Reef East; Stage 4: Bird Reef Central; and Stage 5: Qala Deeps
The remaining four stages are at Scoping Study level and will be subjected to individual DFSs as West Wits progresses towards execution. The DFS on the second stage of development, Main Reef, is expected to commence before the end of 2021.
Stage 1 Qala Shallows Definitive Feasibility Study and Early Mining Initiative
Qala Shallows provides the backbone to underpin subsequent stages of production over a long life of mine. Additionally, the combination of the existing infrastructure (Qala Adit) and accessible shallow Mineral Resources allow access for production on a fast-tracked timeframe relative to most global opportunities for underground gold mining.
First ore is expected to be extracted 12-months from the commencement of development, building up to an annualised production rate of 25,000 oz Au per annum after 30 months and reaching a full steady-state production rate of 53,000 oz Au per annum after year four.
West Wits commenced an Early Mining Initiative at the Qala Shallows in September 2021. Information gathered on underground inspections confirmed that there is sufficient ROM remnant material left over from the old mining operations to kick-start the initiative. Early works are being implemented over a six-month period from October 2021 to March 2022, with initial production aimed at delivering 5,000t to 8,500t ore per month from February 2022, which is expected to ramp up to a production rate of 8,500 to 10,000t per month from July 2022.
During 2008, West Wits completed and reported results of a first pass Uranium Exploration Program focusing on its primary Uranium Exploration Target. The Company is recommencing investigations into the prospectivity of the uranium-bearing reefs within the Bird Reef Central area of the WBP. The aim is to convert an exploration target of 12-16mlbs into a resource.
Current Global Mineral Resource Estimate for the WBP
The current global MRE for the WBP was released to the ASX in September 2021. West Wits has a 3.55 million ounces at 4.26 g/t JORC MRE. The Company’s development strategy aims to produce 60,000oz Au per annum over 20-year plus Life-of-Mine with first production by early 2022.
West Wits’ Mineral Resource Estimate is derived from the historic DRD resource, but only includes ounces to a 1,500m depth from surface and does not include deep underground material previously considered in the DRD estimation. The chosen headline cut-off grade of 2 g/t is based on historic figures and should ensure that the bulk of the resources can be reasonably expected to be exploited.
Global MRE for the Witwatersrand Basin Project at 2.0g/T Cut-Off
West Wits is not aware of any new information or data that materially affects the MRE information and confirms that all material assumptions and technical parameters underpinning the estimates above continue to apply and have not materially changed. The Global MRE set at a 2.0 g/t Au cut-off, reported in accordance with the JORC Code of 2012. Number differences may occur due to rounding errors. (ASX Announcement 23 July 2021.)
Additionally, the ore bodies are still open in multiple directions with additional reef packages of the prolific Witwatersrand Basin system yet to be explored by West Wits in the project area.
History of Leases
The Witwatersrand Basin Project (WBP) comprises two historic mining centres on the northern edge of the Witwatersrand Basin in the Central Rand Goldfield immediately southwest of the city of Johannesburg. Mining has been taking place within the WBP area since the discovery of the goldfields in 1886. The Central Rand Goldfields contain some of the world’s largest gold deposits and has produced over 247 million ounces of gold. This is more than 35% of total global gold production.
During that time up to seven different gold-bearing conglomerate horizons were mined from the surface down to a depth of 3,100 metres and total production for the combined Durban Roodepoort Deep and Rand Leases area was over 30 million ounces of gold at a grade in excess of 5 g/t (ASX: West Wits Mining Limited Prospectus 15/11/2007).
Historical JORC Mineral Resource Estimate
This historical estimate was compiled by the previous owners – Durban Roodepoort Deep Limited (DRD) – of the WBP leases which were listed on the Australian Stock Exchange between May-1999 and July 2006. The MRE is from DRD’s Annual Report (2000), which also reported the closure of the mining operations. The historical estimates used categories of mineralisation as defined by the JORC Code 1997, which are substantially the same as the current JORC Code.
|Category||Tonnes (millions)||Grade g/t||Ounces AU|
|Measured & Indicated||56.5||4.43||8,050,000|