JOHANNESBURG (miningweekly.com) – A binding term sheet for a senior loan facility of up to a R875-million has been secured by West Wits Mining, which is reviving gold mining on the very doorstep of the City of Gold.

The new loan facility, to be provided by South Africa’s Absa and Nedbank Corporate and Investment Banking (CIB), replaces the funding arrangement with South Africa’s State-owned Industrial Development Corporation (IDC) and Absa, which was announced in June last year.

The new arrangement is described as having enhanced flexibility and broader banking support for West Wits’ growth strategy while also funding the production ramp-up and development of Qala Shallows, the underground gold mine project located in the historic Witwatersrand basin, 15 km west of Johannesburg.

With its access to a broader range of banking products and services, the new facility is expected to better support West Wits’ development timeline and strategic growth objectives.

Drawdown is until 30 June 2028 and final maturity on 30 June 2031. Hybrid hedging is taking the form of half of the gold sales during the construction period being executed through a put option programme to ensure the project maintains exposure to gold price upside.

Qala is the first new underground gold mine to be built in South Africa in 15 years and is designed to produce 70 000 oz/y of gold over a 17-year lifespan. But Qala means ‘beginning’ in Zulu, which points to this being just the start, and steps are already being taken to expand production to 200 000 oz/y. Moreover, Shallows reflects Qala’s relative 800-m shallowness, which has lower cost connotations.

In a joint statement, Absa and Nedbank CIB described the Qala Shallows gold project as a development that would drive local job creation, economic growth, and sustainable mining in the Witwatersrand basin, the largest and most prolific gold deposit in human history.

Discovered in 1886, the ancient basin spanning 300 km by 160 km has yielded more than 1.5-billion ounces of gold in the past 140 years.

“This facility reflects our continued commitment to enabling impactful, long-term investments in South Africa’s resources industry,” the banks stated in the media release to Mining Weekly.

“The execution of this binding term sheet represents another important step forward for West Wits as we continue to advance the Qala Shallows project,” West Wits CEO Rudi Deysel stated.

While expressing pleasure to be working with Absa and Nedbank CIB, Deysel also acknowledged the IDC for its constructive engagement with the company, which is chaired by Michael Quinert, who pointed out on March 17, when the first gold pour from his new virgin rock Qala Shallows gold mine took place at Sibanye-Stillwater’s Ezulwini gold processing plant, that many more “great” opportunities exist in South Africa for gold mine development.

A pretax net present value, at a 7.5% discount rate, of $719-million and an internal rate of return of 93% is reported in the updated 2025 definitive feasibility study (DFS).

Peak funding is estimated at $44-million over a 2.6-year period, a reduction from $54-million over three years in the 2023 DFS.

Average steady-state production is at an estimated all-in sustaining cost of $1 181/oz.

Kimberley reefs K9A and K9B are the reefs that will be processed during the life of the project.

The compliant mineral reserves are estimated at 4.6-million tonnes grading at 2.60 g/t for 383 934 oz of gold.

The total mineral resources for the K9A reef are estimated at 8.1-million tonnes grading at 4.8 g/t gold for 1.2-million ounces of gold, and 10.5-million tonnes at 4.5 g/t gold for 1.5-million ounces of gold for the K9B reef.

Use of conventional breast mining is in a configuration considered optimal for the Qala Shallows deposit.

The stopes will be accessed by strike drives developed on the K9B reef horizon and the K9A and K9B stopes will be accessed from this infrastructure.

The strike drives will connect to the decline system developed from the existing Qala Shallows adit boxcut, located centrally in the mining area as well as in the footwall of the K9B reef.

The new decline will access the centre of the strike from what was known in the old days as the donkey adit because of the carts taken through it into the mine.

Not that long ago, going underground through the adit meant a crawl-through by the West Wits crew, but the broad new decline has changed all that to the extent that trackless vehicles can now enter into a modernised environment that has ventilation, power and water.

The good ground conditions have modern, systematic support that includes anchors and shotcreting to prepare for mechanised mining.

The new Qala Shallows gold mine is not only a milestone for West Wits Mining but also for South Africa’s mining industry, the South African economy, and the communities that will share in the opportunities created here, Minerals Council South Africa CEO Mzila Mthenjane highlighted at the official opening of the mine.

“Gold is woven into the fabric of South Africa’s life story. From the discovery of gold on the Witwatersrand in 1886, which transformed Johannesburg into the City of Gold, to today’s modern operations, mining has been central to our nation’s development,” added Mthenjane, whose council continues to play a role in ensuring that the legacy of mining remains a driver of economic growth and shared prosperity.