en.Wedoany.com Reported - South African gold mining company West Wits Mining has secured a binding term sheet for a R875 million senior loan facility, jointly provided by Absa Bank and Nedbank Corporate and Investment Banking (CIB), to support the ramp-up and development of the Qala Shallows underground gold project, located 15 kilometres west of Johannesburg. The new financing arrangement replaces the previous arrangement reached last June with South Africa's state-owned Industrial Development Corporation (IDC) and Absa Bank, and is described as offering greater flexibility and providing broader banking support for the company's growth strategy.
Qala Shallows, located in the historic Witwatersrand Basin, is the first new underground gold mine built in South Africa in 15 years, designed to produce 70,000 ounces of gold annually over a 17-year mine life. "Qala" means "beginning" in Zulu, and the company has already planned to expand production to 200,000 ounces per year. The mine is approximately 800 metres deep (Shallows is named for its shallow depth), offering a lower cost advantage. The drawdown period extends to 30 June 2028, with a final maturity date of 30 June 2031. The hybrid hedging takes the form of a put option programme covering half of the gold sales during the construction period, ensuring the project retains exposure to rising gold prices.
According to the updated 2025 Definitive Feasibility Study (DFS), the mine has a pre-tax net present value of US$719 million (at a 7.5% discount rate) and an internal rate of return of 93%. Peak funding requirement is US$44 million over 2.6 years, down from the US$54 million over 3 years estimated in the 2023 DFS. The estimated all-in sustaining cost at average steady-state production is US$1,181 per ounce. Compliant mineral reserves are estimated at 4.6 million tonnes grading 2.60 g/t, containing 383,934 ounces of gold. Total mineral resources for the K9A reef are 8.1 million tonnes grading 4.8 g/t, containing 1.2 million ounces of gold; for the K9B reef, 10.5 million tonnes grading 4.5 g/t, containing 1.5 million ounces of gold.
The mine employs conventional room and pillar mining methods, with stopes accessed via strike drives developed horizontally along the K9B reef. A decline system is being developed from the existing Qala Shallows adit excavation point. The new decline replaces the narrow entrance historically known as the "Donkey Adit," now enabling trackless vehicle access to a modern working environment equipped with ventilation, power, and water supply, with rock bolting and shotcrete support preparing for mechanised mining.
West Wits CEO Rudi Deysel stated that the execution of the term sheet marks a significant step in advancing the Qala Shallows project, and he also thanked the IDC for its constructive engagement with the company. Company Chairman Michael Quinert noted, when the first gold was poured at Sibanye-Stillwater's Ezulwini gold processing plant on 17 March, that many gold development opportunities remain in South Africa. Mzila Mthenjane, CEO of Minerals Council South Africa, emphasised at the mine's official opening that the Qala Shallows gold mine is a milestone not only for West Wits Mining, but also for South Africa's mining industry, its economy, and local communities, adding that gold is woven into the fabric of South Africa's life story. Absa Bank and Nedbank CIB stated in a media release that the arrangement reflects their continued commitment to impactful, long-term investment in South Africa's resources sector.
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