West Wits Mining Ltd is applying for two mining permits, which upon approval could see gold production increase substantially by the fourth-quarter of the calendar year. This positive news flow comes at a time when the Rand is strengthening due to improving conditions in South Africa’s political and economic environment. The team are preparing the application for full mining rights which they plan to submit to the regulator in April.
Chairman of West Wits Mining Ltd, Michael Quinert, commented: “The Board’s main task for the South African business in 2018 remains clearly focussed on fast-tracking the application and approval for full mining rights for the Witwatersrand Basin Project, with submission scheduled for April. Upon regulatory approval, this will likely create significant incremental value for shareholders, as it would enable production to be ramped up materially. Against this backdrop, it is pleasing to note the stronger Rand is reflective of the potential turnaround in South Africa’s economic and political environment. Further, with the continued success of the existing operations, a decision was taken to proceed with two mining permit applications which upon grant would enable WWI to boost monthly production from the Witwatersrand Basin Project significantly by the fourth quarter of the calendar year.”
The group’s consultants have advised that South African mining laws allow West Wits Mining Ltd to apply for two mining permits – these enable small scale open pit operations to be contained within five hectares. The geology team has identified two candidate open pit areas within WBP, focussing on the high-grade Main and South reefs.
Using a new naming convention, the two areas will be known as WBP – Main & South Central Open Pit and Main & South East Open Pit. This is positive for West Wits Mining Ltd as with the depletion of WBP Kimberley Central Open Pit (renamed from Witwatersrand One - to align with the new naming convention) due within 10-12 months, it is important to ensure continuity and preferably, grow ore production and cashflow.
The mining permit applications are scheduled to be lodged in March and granted by September, allowing ore production to materially increase during 4Q18. Management intends to minimise overheads by undertaking these new projects under the existing business model (i.e. 50:50 profit sharing terms) with its existing project partner.Mining right application
According to the company, the Board continues to fast-track preparing the application for the mining right (equivalent to a mining lease in Australia) across the WBP and is aiming to submit the paperwork to the government in April. Upon approval (expected within 12 months) the prospective gold production from WBP can be scaled up significantly, which would clearly be a harbinger to create incremental value for shareholders. This is timely as South Africa’s political and economic fortunes appear to be slowly turning around, judging by the significant strengthening in the Rand against the US-dollar and the swearing in of a successful mining entrepreneur in Cyril Ramaphosa to the Presidency.
With six months production from Kimberley Central Open Pit (previously Witwatersrand One) recorded, the Board has decided to move to a 60-day reporting cycle to mitigate against exogenous processing bottlenecks and currency movements. This new reporting regime will be standardised to include more drilled-down detail and commence from mid-March 2018. Provisional figures for January, however, confirm that high-grade ore production was between 12 000 t to 15 000 t and net cash flow as at the upper end of the AUS$200 000 – AUS$250 000 target range.