en.Wedoany.com Reported - West Wits Mining (ASX:WWI) has completed financial settlement of a $53 million senior loan facility for its Qala Shallows gold project in South Africa, with an initial tranche of approximately $20.5 million received from Absa Bank and Nedbank Corporate and Investment Banking (Nedbank CIB).
The company stated that this milestone significantly de-risks the development of Qala Shallows, following a 12-month financing optimization process. According to the Definitive Feasibility Study (DFS) released last year, the loan is expected to fully fund the project until it reaches steady-state production of approximately 70,000 ounces of gold per year, with a mine life of 12 years. The study projected a post-tax Net Present Value (NPV) of $500 million and an Internal Rate of Return (IRR) of 81% at a gold price of $2,850 per ounce, with a payback period estimated at eight months from the end of the peak funding period.
The initial drawdown will be directed to the company's South African subsidiary to accelerate surface and underground development work. Key near-term activities include continuing EPCM surface infrastructure works, including the construction of pollution control dams and haul roads, both scheduled for the third quarter. The company also plans to install potable water infrastructure and aims to connect to the municipal grid later this year. Additionally, funds will support underground expansion activities, including cleaning and scaling operations in the recently opened Level 2 underground. These efforts are expected to open up new ore mining areas and increase feed volumes to the Sibanye-Stillwater Ezulwini processing plant. Delivery of new plant and equipment is scheduled for the third quarter, including an underground rock bolter, an additional 30-tonne underground haul truck, and two diesel generators to provide backup power after grid connection later this year.
Qala Shallows is the first phase of production planned for the company's broader Witwatersrand Basin project. The Witwatersrand Basin is a prolific geological region that has historically produced over 1.5 billion ounces of gold. West Wits Mining aims to achieve a future production rate of approximately 200,000 ounces per year across its entire mining rights area, with the company having identified total resources of 7.24 million ounces of gold at a grade of 4.0 g/t. The mine is South Africa's first new underground mine in 15 years, having poured its first gold bar at Ezulwini in March, with current gold prices remaining near highs of approximately $4,000 per ounce.
