West Wits Mining on Thursday said that the DFS reported a mine life of some 17 years for the Qala Shallows project, delivering a total of 663 000 oz over that period.

The Qala Shallows project is expected to generate revenues of $1.16-billion and free cash flows of $240-million, with peak funding requirements estimated at $50-million. The DFS has estimated a post-tax net present value of $106-million and an internal rate of return of 30%.

“The completion of the DFS is a key achievement in West Wit’s journey of transforming from an exploration operation to a robust, midtier gold production company,” said MD Jac van Heerden.

“Historically, the Witwatersrand basin produced more than 35% of total global gold production and here we stand today, with positive DFS results, at the dawn of a gold revival in the same area. We are greatly encouraged with the result of this report, as we now strive to unlock significant value for our investors and shareholders, with this first of five stages of development.

“Additionally, we are also looking forward to progressively stimulating the local economy as we start to engage skills, local contractors and service providers from the area.”

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/y after 30 months and reaching a full steady state production rate of 53 000 oz/y after year four. The Qala Shallows project will continue a projected production at steady state of 53 000 oz/y for approximately 10 years.

Once the Qala Shallows is depleted, production will continue at Qala Deeps, using most of the existing infrastructure.

“Its exciting that we have just completed the DFS on the Qala Shallows project, but we have all these other projects in the pipeline that will come online after. As we put the Qala Shallows into operation, we will directly move over to the Bird Reef East,” Van Heerden told delegates at Paydirt’s Africa Downunder conference in Perth.

“There is a lot more to come than just this feasibilty study.”

West Wits on Thursday said that development of the Qala Shallows project is planned to start in September 2021, with the project representing only Stage 1 of 5 project stages to be developed by West Wits Mining comprising the Witwatersrand Basin project. Qala Shallows represents an estimated 40% of the total planned production of the total potential of the Witwatersrand Basin project.