With areas of the historic Durban Roodepoort Deep [DRD] and Rand Leases of the Central Rand Leases within Johannesburg’s Witwatersrand region, known for its rich gold deposits, having been mined for the past hundred years, West Wits Mining still saw gold, leading to the establishment of the Witwatersrand Basin Project [WBP], where the Qala Shallows project is situated.
Chief executive officer RUDI DEYSEL tells BRUCE MONTIEA how the company plans to realise the value of this tenement, strategically designed to leverage its location on a proven gold deposit.
Founded in 2007, West Wits was listed on the Australian Securities Exchange during a period when South African junior gold players were gaining traction in the Australian market.
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The company’s initial portfolio consisted of the Randfontein and Soweto clusters, and in 2012 it sold the Randfontein Cluster and renamed the Soweto Cluster to WBP,” explains Deysel, adding that West Wits was granted the mining right in July 2021, with the initial definitive feasibility study completed in September of the same year, and the inaugural ore reserve statement for Qala Shallows issued.
The team working on Qala Shallows includes chairman Michael Quinert, an Australian lawyer who has extensive experience working in South Africa, especially with Australia-listed companies starting up new mining projects. “His experience is ideal because he understands the whole listing process.”
Deysel on the other hand has more than 25 years as a mining engineer, and says he has experience working in mine start-ups in Africa, especially in the Democratic Republic of the Congo during the copper-cobalt boom, adding that his first exposure to junior mining was in Ghana 10 years ago at the Asanko gold mine, which was then a new mine owned by a junior miner listed in Canada.
The team has been working on Qala Shallows for five years. In addition to the updated feasibility study released in July, there has been significant work done on the mine itself.
“These early works include refurbishing and constructing the old box cut as well as the old decline and developing some of the new declines. We are ready to actually produce ore immediately.
The expectation for the first gold bar is about early next year,” says Deysel.
Mixing the old with the new
The overall Qala Shallows gold mining project is characterised by remining, extending and mining new areas. “We’ve got a bit of a brownfield opportunity, but we have a brand new greenfields project as well.
In addition to the refurbished old decline, which gives us quick access to the ore body, we are developing a brand new decline out of the same box cut, which created a brand new infrastructure underground into an in-situ block of ground that was never touched before.
It’s extending over a strike distance of 4 km and it’s 850 m deep. And we are mining it from 35 m below surface all the way down to 850 m,” elaborates Deysel.
He says this entails the first phase of a much bigger project encompassing five phases, hence named ‘Qala’ which is taken from the isiXhosa and isiZulu word ukuqala, meaning ‘to start’ or ‘to begin’.
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“In the Main Reef and the South Reef there is still some remnant mining that we can do. And then there is also the Bird Reef which also has some opportunities.
Furthermore, if you go on the downdepth side of the Qala Shallows, which concentrate on the Kimberley Reefs, we’ve got the natural extension into the Qala Deeps.
We’ve also got a prospecting right that’s in the process of being approved and one that’s already been approved in terms of our environmental authorisation that extends it even more.”
Deysel says West Wits believes the overall project will ultimately phase into more mines that will produce 200 000 g/t Au, with Qala Shallows only producing 70 000 g/t Au of that, adding that the company also has the western side of its mining right, the Central Bird Reef Complex, which consists of both gold and uranium.
ALSO READ: West Wits secures funding for Qala Shallows, over 1,000 jobs expected
A worthwhile project
Qala Shallows is such a worthwhile project for West Wits because the all-in sustaining costs are very low and the gold price is showing resilience too.
“When we evaluated the project for the first time in 2021, we came out with a definitive feasibility study only for phase one. When we started declaring reserves, we used a gold price of $1 750 g/t Au.
Even at that point the project was already showing great signs, especially as we were doing shallow mining. Eventually the price got to $1 850 g/t Au, and then in 2023 we were able to access underground workings and did some sampling work as well as some detailed design planning, which optimised this plan totally and improved the economics of the business much more.
been significant work done on the mine itself
From $1 850 g/t Au, the gold price jumped to where it is now at around $3 000 g/t Au. “Selling this project is great because it is exceptional as our mining costs basically increased with the consumer price index. So you still have $1 000 g/t Au all-in sustaining costs versus a revenue base of $3 000 g/t Au.
All these costs are based on actual agreements that we already had negotiated with the different suppliers. Additionally, with all these old historical gold mines in the area and plants that are either scaling down or closing down, there’s a lot of additional capacity in terms of processing.
We didn’t need to build a new plant.” Deysel says West Wits went through a very intensive due diligence process with the Industrial Development Corporation [IDC] and ABSA bank.
“They gave us a senior debt facility of $50 million, which we executed and signed off a few weeks ago,” he says, adding that the company also raised AU$14.5 million on the Australian Stock Exchange, enabling it to recommission the project.
“This allowed us to move from the early works programme, where it was mostly a sampling exercise, to a refurbishment exercise where we were able to start the project in the last week of June.”
blast by October
Major works currently include setting up a temporary power network while work to do a detailed design for grid power from a brand-new substation is being carried out, says Deysel, with the team setting up to start mining in the next three months.
“The intention is by October to have our first blast, as the project is fully permitted. We’ve got our mining rights as well as our water use licence. We’ve got every single permit to develop this project that you can think of, including for explosives.”
The inferred resource estimate for the overall project currently stands at 5 Mt g/t Au. However for Qala Shallows it stands at 1 Mt g/t Au, with the reserve declaration at 380 000 g/t Au.
“Typically, in South African underground mining, you basically declare your reserves on your mine plan in the closest, more shallow areas. And as you go deeper, then you will constantly increase your reserve base from your decline or your shaft or where you mine.”
Qala Shallows will be mined using a hybrid mining system, involving the use of mechanised trackless vehicles to develop the infrastructure.
“Everything, including the shaft and the strike drives, is done with mechanical equipment. And then for the stoping we’re going to use normal conventional breast mining like it’s been done in the past hundred years in the Witwatersrand, and even in the Bushveld Igneous Complex, so it’s very much stock standard.
The only difference is that we are not going with compressed air at all. We are using 100% hydropower as it is much cleaner, cheaper, safer and with less noise. With all the requirements of the IDC and ABSA, we strive to be, from an ESG point of view, much better than what’s required of us.”