JOHANNESBURG (miningweekly.com) – Australia-listed West Wits Mining, which is considering a secondary listing on the JSE, has commenced bush clearing and old shaft rehabilitation west of Johannesburg, as part of its far-reaching revival plans for an area where gold mining took place as recently as 20 years ago.
West Wits Mining, which has been granted a mining right, two weeks ago completed a definitive feasibility study on the first of its five targeted gold projects that reflect ongoing potential for gold activity in South Africa’s historic Witwatersrand basin. (Also watch attached Creamer Media video.)
Being reopened is an old section of Rand Leases and DRDGold that was closed at the start of the new millennium and West Wits Mining hopes to produce its first gold ore there early next year.
As reported earlier this month by Mining Weekly, the company’s Witwatersrand Basin project could yield some 1.56-million ounces of gold over a 22-year mine life, with output over 18 years of this period averaging 80 000 oz/y to 90 000 oz/y.
Discussions are under way with nearby gold toll treaters that have licensed tailings facilities and gold refining accounts with Rand Refinery.
“We are going to employ a contractor who will help us to bring in contractor systems and then get mining up and running,” said West Wits Mining MD Jac van Heerden in a Zoom interview. A typical breast mining method is to be deployed.
On a possible secondary listing on the JSE, he added: "It’s definitely on the cards for us."
Mining Weekly: When does West Wits Mining envisage that its Witwatersrand Basin project will commence gold mining?
Van Heerden: It’s been a process getting to this point where we were recently granted our mining right and announced our feasibility study and we’re now in a position of starting up our mine, about 15 km to the west of the Johannesburg CBD. I’m happy to say that we’ve already started with bush clearing. We are busy rehabilitating some of the old shafts. We want to get going as quickly as possible and we hope to pull out the first ore early next year and from then on start building up the project, as described in our feasibility study, ramping up our first stage to about 50 000 oz/y and then ultimately with the potential of going to about 80 000 oz/y to 90 000 oz/y. We started off in 2019 with a scoping study to determine the potential of the whole block and identified in that scoping study about five mining targets. We decided we’ll take the first mining target, which we called the Qala Shallows, and put that into production and then over time we’ll bring in the other four mining targets into production.
Are you planning to mine this yourselves or will you be appointing a mining contractor?
At the moment we’re still a small company. We have a dedicated management team but the objective is that we are going to employ a contractor that will help us to bring in contractor systems and then get mining up and running. We are quite advanced in talks with the mining contractor. There’s nothing that I can announce now but hopefully in the coming weeks we would have concluded our discussions with them, and then we can start placing orders on mining equipment, start employing people and get mining going.
What mining method do you intend deploying?
Luckily, those who mined there in the past have given us a nice blueprint of how to do it. We will pick up from what they have been doing in the past by deploying typical breast mining method. Our decline system will go down, we will then break away with drives, and then we will raise up and establish typical breast mine stoping as is being done all over South Africa.
Who was mining there before you arrived?
It’s an old section of Rand Leases and DRDGold and that section that we are looking to reopen was closed around 2001/2 or thereabouts. Ever since, that area has been dormant and we’re now looking to revive the mining that took place there 20 years ago.
How deep do you expect to go?
We’ve got a couple of nice targets we want to attack to a depth of about 500 m, which is relatively shallow in gold mining terms in South Africa. On the one portion, which we call Qala Deeps, we have the opportunity to go beyond 500 m, to a depth of about 2 000 m. There’s quite a lot of mining potential in that area. We sit with a 3.5-million-ounce resource there at about 4.26 g/t, so there’s still a significant orebody left for us, of which, I would guess, probably about 60% is in the upper 500 m below surface section. So, there’s still a lot of mining for us.
Where will you process the gold ore that you mine?
We have been in discussions with process facilities in the vicinity. We’ve identified that there is spare process capacity in the area. Therefore, we’re not initially looking to put up a plant. We are finalising our discussions. It’s always been a chicken-and-egg situation with some of those in the vicinity not believing that we would get the mining right in place. Now that we have, we’re in a position prove to them that we can start mining. Once we start pulling up ore, we will then further our discussions with them to allocate space to us in their plants.
Will the tailings go on to the tailings dumps of the processors, or will you have your own tailings facilities?
No, the owners of the process facilities that we’re talking to have licensed tailings facilities. We want to avoid putting up a process facility and a tails facility where we mine. If there’s a licensed facility a bit further away, then we’ll tap into that resource.
Will the processed gold be refined at the Rand Refinery?
Yes. The potential toll treaters that we are talking to do have an account with Rand Refinery. The whole idea is that they will toll treat for us and they would then send off the gold to Rand Refinery for refining.
What has the definitive feasibility study revealed about the Qala Shallows?
Qala stands for ‘a new beginning’; that is part of the revival theme. We’re looking to kickstart mining in that area and the ‘shallows’ stands for up to 500 m deep, and then the Qala Deeps is one of the other mining targets that we can progress. We decided to focus our definitive feasibility study (DFS) on the first 500 m and that yielded very strong results for us. We got a pre-tax net present value of about $150-million with an internal rate of return of about 35%. Another key metric for us is the all-in sustaining cost, which came out at about $1 145/oz. This makes it quite competitive for us for the area we’re in, so we were very excited about the results from the DFS, and it’s important for us to understand that is stage one of five stages. We still have a lot more to come. We will put our other mining targets through a DFS process in the coming months and hopefully by the second quarter of next year, we’ll be in a position to announce the results of all the other DFSs.
How do you intend to fund Qala Shallows and what are your funding plans for later projects?
We’ve already started discussing funding options with various people and we’re looking at a mix of raising some money on the ASX. We’re looking at debt funding and there are other instruments available to us, such as the streaming option, which we're also considering. At this point, now that our DFS is out, we’re now in a position to speak to financial institutions and advisers with real numbers. Up until two weeks ago, we were not able to do so. We’re looking at a mix and we’re looking to doing some debt funding in Australia and also here in South Africa, so that everyone gets a bite at the cherry.
What reefs are to be mined and what are their grades?
We’re in the fortunate position of having predominant reefs running through the area. We’ve got the main reef, that is predominantly higher grade, but which has also in the past been mined more than the other reefs. That grade runs at between about 5 g/t to 7 g/t. We’ve got the bird reef. This is of a bit lower grade but also near surface. Then we’ve got the kimberley packages. All three of these reefs have been extensively mined in the past. All the toll-treating operators that we are talking to have got extensive experience in processing these reefs. One of the benefits we’ve got is that even though we’ve done test work for the DFS study, most of the people that we talk to are familiar with the characteristics of these reefs, which will make toll-treating discussions in the future a lot easier.
What are the chances of a secondary listing on the JSE?
We’ve definitely considered that and our view at West Wits is that we want to grow our resource base here in South Africa, and perhaps look across the borders as well and raise our resource base there, and that will definitely put us in a position where we have to consider a listing on the JSE, because we want to identify as an African company. If we list on the JSE, we hope to then attract further investments from Africa and South Africa. So, it’s definitely on the cards for us. I can't give you a date yet, but we have been talking about this as a board and as a management team, quite extensively.
SPECIAL MINERAL RESOURCE
The scoping study estimated that the project would reach a peak production rate of over 95 000 oz/y and could produce some 90 000 oz/y between years six and 11 of operations.
“We have always known that West Wits had control of a special mineral resource in South Africa. This mine yielded robust results historically and, we can confidently say, will again do so well into the future,” Van Heerden stated in Australia earlier this month.