West Wits Mining initiated by Pitt Street Research with BUY recommendation and A$0.054 – A$0.076 share price target
Some of the most promising ASX-listed miners are based in Africa
The company’s Witwatersrand Basin Gold Project (WBP) in South Africa holds a 4.28-million-ounce JORC mineral resource at 4.58 g/t gold.
West Wits Mining Ltd (ASX:WWI)’s preliminary trade-off studies as part of the Witwatersrand Basin Project (WBP) ‘Project 200’ initiative have confirmed the merits of progressing to a further scoping study.
The company had appointed mining engineer consultant, Bara Consulting, to undertake Project 200 to explore the potential to increase production at the WBP up to 200,000 ounces of gold per annum.
There are not yet reasonable grounds to determine whether such a production rate is achievable, and therefore a further scoping study would be required to determine viability for substantially increasing production from that in the current mine plan.
West Wits managing director and CEO Jac van Heerden said: “We are developing a large resource which offers potential for returning significant value to shareholders.
“Our technical teams, together with independent consultants, have conducted encouraging preliminary work which has advanced Project 200 to a point where we believe there is merit in embarking on a further scoping study process.”
In January 2022, West Wits released a scoping study that outlined a 4-stage mine development plan with 27-year life-of-mine (LoM) for the WBP.
West Wits recently decided to embark on a two phased study to determine and assess the relevant engineering and other hurdles which would need to be resolved to achieve a potentially substantial increase of production with an aspirational target of 200,000 ounces per annum (Project 200).
Bara Consulting was appointed to conduct various technical studies to investigate the potential to further increase production capacity at the WBP.
Bara completed Project 200’s Phase 1 which involved several trade-off studies on the critical constraints of the existing mine plan, including:
Mine design & infrastructure. A rework of the current scoping study’s mine design and scheduling to determine the potential for an improved monthly production rate.
To enable an increased production rate, supplementary infrastructure would be required to access the three gold bearing reefs.
Several potential shaft access points, existing and new, were identified in the Mining Right area.
These will be investigated further for hoist capacity and the ability to sustain the necessary increased production rates.
Potential of a metallurgical plant. A third-party process facility is assumed for the current scoping study’s average production levels of ~55,000,000 per month over the LoM with peak production of 75,000 tonnes per month.
The construction of a new processing facility would be considered as part of the Project 200 strategy to meet the demands of an increased production rate.
Surface space constraints and the desire to keep dust emissions and noise pollution to a minimum, led to the consideration of placing sections of the process plant underground.
The complexity of installing the milling circuit underground was deemed unfavourable and it is recommended that the construction of a metallurgical plant completely on surface be assessed.
Enclosing the plant in a cladded building and selecting an appropriate process route, such as a multi-tiered milling system with underground blast management, would mitigate dust and noise pollution.
Expansion of the company’s existing 16-hectare surface landholding at the Qala Shallows would be the primary area investigated for a new process plant.
The lay-out, sizing and economic feasibility would be evaluated as part of a new Project 200 scoping study.
Tailings deposition strategy. If the construction of a metallurgical plant proves to be viable, the new scoping study stage would proceed to investigate the most suitable tailings deposition processes.
The scoping study will investigate the following tailings deposition options:
The construction of a processing plant and tailings facility is not considered in the company’s existing scoping study and would be subject to government approvals. Initial discussions with the relevant government departments have been positive.
Dewatering. Trade-off studies indicated that dewatering areas under the existing scoping study is not required to increase production rates as flooded areas are excluded from the mine plan.
However, dewatering sections of the Witwatersrand Basin would likely provide a significant value-add and strategic advantage to the overall WBP by exposing additional areas of known mineralisation currently excluded from the company’s mineral resource estimate and scoping study.
The areas of specific focus include the Kimberly Reefs to the west portion of the Mining Right area and sections below 400m at Bird Reef East and Main Reef stages.
The Witwatersrand Basin holds the world's largest known gold reserves and historically has produced in surplus of 1.5 billion ounces, which is over 40,000 metric tons.
The historical production records for this area, recent updates to the West Wits scoping study and newly obtained geological information all point to the potential for increasing the scale of operations at the WBP.
The trade-off analysis under Phase 1 of Project 200 was successful in testing the critical elements required to increase the scale of the WBP.
Bara recommended that there is sufficient scope to justify the commissioning of a new scoping study to assess the potential increase of production at the WBP with the aspiration of achieving 200,000 ounces of gold per annum.
West Wits expects to make a decision regarding the commissioning of Phase 2 in Q4 2022 which if taken would mean results of the new scoping study would be expected to be available ~6 months from commissioning.
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