West Wits Mining (WWI) Real Gold, Real Progress, and Leverage That the Market Hasn’t Caught Yet, page-2

PART 2 – Hidden Strengths in the Structure: Ownership, Currency, and Margins

While the Qala site build and DFS leverage are front and centre, there are two critical structural wins happening quietly in the background — and they’re both shareholder-friendly.

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1. Strategic Buyback – WWI Increases Ownership to 74%

As part of the June 2025 $14M placement, WWI is spending ~A$7.5M (US$5M) to buy back a 10% minority stake in its South African subsidiary from BEE partner Lilitha Resources.

Increases direct ownership of the Witwatersrand Basin Project (WBP) from 66.6% → 74%

Funded up front (no future cash flow drain)

Simplifies capital structure

Enhances share of future revenue and NPV

Improves alignment with investors

This is a smart move that quietly boosts long-term economics and removes a legacy equity obligation.

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2. Rand Weakness = FX Margin Shield

WWI’s costs are mostly in Rand. Gold is sold in USD. That creates a natural margin hedge — especially now.

Original DFS assumed ZAR17.50/USD

Current FX is closer to ZAR18.50–19.00/USD

This FX shift reduces USD-denominated operating costs

Even if inflation lifts local Rand costs, the weaker exchange rate buffers or cancels it out in USD terms.

Result: AISC might rise slightly in ZAR, but stay stable — or even fall — in USD.

At $3,300 gold, that means more margin, not less.

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BONUS: Local Cost Curve Advantage

South Africa’s mining input cost inflation has been significantly lower than countries like Australia or Canada:

Labour costs are rising more slowly

Materials are less exposed to global shipping and fuel volatility

Toll-treating model avoids heavy capex inflation altogether

This gives WWI operating cost stability in a volatile world.

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Conclusion:

While Qala’s scale and leverage are grabbing attention, the ownership clean-up and Rand FX dynamics are quietly tightening the story — boosting margin, control, and long-term value.