Cornerstone Witwatersrand
Basin Project (WBP)
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Witwatersrand Basin Project, South Africa
Quick overview
The WBP is set to transform West Wits into a long-term gold producer, with average steady state annual ROM production of 65,000oz for 25-years, over a 27-year LOM for 1.6Moz of gold.
Qala Shallows Mine is Phase 1 of the WBP. The Qala Shallows Definitive Feasibility Study supports an underground mining operation with a robust rate of 3.2MT at 2.81g/t recovered grade for 290,000oz Au recovered Gold over a 17-year Life-of-Mine.
Maiden 290,000oz Ore Reserve
Approx. 70% in Measured & Indicated Categories
3 distinct Reef horizons: Kimberley Reef; Bird Reef; Main Reef
Prospecting Right approval expected – will re-introduce a substantial portion of previous Mineral Resource
Background
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.
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.
The CAPEX profile to recommence mining is expected to be low due to the existing historical infrastructure and planned toll treatment.
Scoping Study and Production Target
The updated Scoping Study results announced in March 2022 firmly established the WBP’s potential to progress into a long-term gold mine. The results outlined an average steady-state annual production of +65,000oz with a 27-year Life-of-Mine. The results also indicated that WBP has the potential to build up to a peak production rate of 90,000 oz per annum. The Scoping Report outlined a production target which averages 76,500oz per annum from Years 5 – 16, with 92,000oz achieved in Year 6.
Phase 1
Qala Shallows
Phase 2 Project 200
Main Reef Package; Bird Reef East; Qala Deep
Bird Reef Central is subject to an updated Uranium Exploration Target providing the potential opportunity to become a standalone gold and uranium project.
Phase 1 Qala Shallows Definitive Feasibility Study
DFS covers a 60% subsection of the Scoping Study
Substantial Ore Reserve: Declared ore reserve of 3.2MT at 2.81g/t for 290 000ozAu
Significant Life-of-Mine: 16-year LOM for 668,000oz
Solid Production: Average Steady-State Production at 55 000oz per annum for 10 years
Project Financials:
AISC US$1,093 with steady-state AISC of US$962/oz
Pre-tax NPV7.5 of US$180M
Pre-tax IRR of 38% at a Gold Price of US$1750/oz
Peak Funding US$63M with 5-year payback period from commencement
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 was extracted in Feb 2022, 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 early works at Qala Shallows in September 2021. Information gathered on underground inspections confirmed that there was sufficient ROM remnant material left over from the old mining operations to kick-start the initiative. Early works were implemented over a six-month period from October 2021 to March 2022. with first production achieved in February 2022. The early works successfully delivered surface infrastructure and refurbishment of historical underground workings.
Key Initiatives at Qala Shallows for rapid production ramp-up
Phase 1 is well-advanced with the completion of the Qala Shallows DFS and early works which aims to achieve early cash flow from an estimated production of 5,000 – 8,500t ore per month. This will provide an excellent production springboard as West Wits ramps up Qala Shallows production and advance Phases 2 and 3 feasibilities.
Completed infrastructure includes:
- Change Houses and Lamp Room
- Office Complex
- Temporary Workshop
- Recently Rehabilitated Box Cut
- Run of Mine Stockpile
- Generators and Utilities
- Ventilation Shaft
In October 2022, West Wits secured a cost-effective toll treat agreement with Sibanye-Stillwater’s subsidiary. The Company continues to sustain a state of Operational Readiness at the Qala Shallows mine, maintaining established mine infrastructure and legal appointments which will enable the recommencement of mining operations upon West Wits securing project finance. The Company anticipates the primary funding options to be significantly advanced by the end of Q1 2023, which would enable West Wits to mobilise mining equipment and the contractor’s workforce in Q2 2023.
Phase 2 Project 200
Based on the WBP’s encouraging Scoping Study results, West Wits decided to embark on a two phased study to determine and assess the relevant engineering and other hurdles which would need to be resolved to achieve a further substantial increase of production with an aspirational target of 200,000oz per annum. The trade-off analysis was successful in testing the critical elements required to increase the scale of the WBP. Bara Consulting recommended that there is sufficient scope to justify the commissioning of a new Scoping Study scheduled for 2023 to assess the potential increase of production at the WBP and to determine the additional infrastructure Capex, which include a process facility, tailings storage facility and shafts and access points.
Uranium Exploration
During 2008, West Wits completed and reported results of a first pass Uranium Exploration Program at the WBP. West Wits is now recommencing investigations into the prospectivity of the uranium-bearing reefs within the Bird Reef Central area. The aim is to convert a JORC 2012 compliant exploration target of 12-16mlbs into a resource.
In October 2022, West Wits announced the results of the first phase of the Company’s Uranium Drilling Program with the objective to confirm historical information on the Uranium Exploration Target.
The three diamond-hole assay results are:
1.59m @ 835ppm U and 1.46g/t Au from 85.11m (PH1B – Middle Reef), including
0.96m @ 1,321ppm U and 2.30g/t Au from 85.74m
1.20m @ 108ppm U and 5.45g/t Au from 104.61m (PH1B – White Reef), including
0.49m @ 226ppm U and 12.15g/t Au from 105.32m
1.26m @ 221ppm U and 0.38g/t Au from 77m (PH1C – Middle Reef), including
0.5m @ 456pm U and 0.80g/t Au from 77.76m
The Company is highly encouraged by the grades and widths of the intercept results which confirm consistent uranium mineralisation over approximately 3.3km of the identified strike along the WBP’s Bird Reef Central area, which includes the Monarch Reef, Middle Monarch Reef and White Reef zones. A further two phases of drilling are planned and once phase 2 is completed, West Wits anticipates it will be in a position to convert the Exploration Target to a JORC compliant Inferred Mineral Resource. Phase 3 drilling is planned to test the continuous nature of the Uranium bearing reef to depths beyond 400m below surface.
Resource Statement
Current Global Mineral Resource Estimate for the WBP
The current global MRE for the WBP was released to the ASX in December 2021. West Wits has 4.28 million ounces at 4.58 g/t JORC Mineral Resource Estimate (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’ MRE 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.
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.
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