Between 2021 and 2023, West Wits quietly stitched together a monster 5.025-million-ounce gold resource across its South African footprint. However when it came time to pick a starter mine, one deposit leapt off the page and Qala Shallows emerged as the obvious front-runner, hosting 10.7 million tonnes grading 2.98 grams per tonne for just over a million ounces of gold, including a solid 383,000 ounces locked away as bankable reserves.
The project already comes with much of the hard work done, including an adit, a decline and an existing shaft, giving West Wits a rare head start in a sector where greenfield builds can chew up years and plenty of cash. As development accelerates, ore output is expected to ramp from about 15,000 to 20,000 tonnes a month by March before charging ahead to around 65,000 tonnes a month by year three.
The project’s true mic-drop moment came in July, when West Wits delivered a definitive feasibility study that turned heads across the market. The numbers were eye-watering, pushing out a net present value of US$500 (A$750) million and an internal rate of return of 81 per cent.
The production outlook stacks up just as well. Qala Shallows is forecast to deliver around 70,000 ounces of gold every year for 12 straight years, generating a hefty US$983 million (A$1.5 billion) in post-tax free cash flow.
Those numbers are based on a conservative gold price assumption of just US$2850 per ounce. With the yellow metal now touching all-time highs of US$4690 (A$7012) overnight, it’s anyone’s guess what those figures look like now.
Perhaps the most impressive stat of all, however, sits on the cost side of the ledger. All-in sustaining costs are expected to come in at just US$1289 an ounce, firmly planting Qala Shallows in the low-cost producer camp.
With funding in the bag and operations gathering pace, the focus now is on execution. If West Wits can hit its commissioning and production targets on schedule and within budget, it could be a pivotal moment in South African gold mining, where a historic basin that built an industry gets a fresh lease on life and West Wits transitions from explorer-developer to producer with real scale.
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