Latest from Warwick GrigorWest Wits is moving forward on the...

Latest from Warwick Grigor

West Wits is moving forward on the uranium front

Last week we mentioned WWI’s uranium orebodies in
passing, but this week we can point to the ASX release
stating that exploration drilling on the uranium has
commenced.

Results from 2008, confirmed consistent uranium
mineralisation over 3.3 km within a 7 km strike potential.
The drilling program just commenced is the first phase of a
program that aims to elevate the Exploration Target to an
Inferred Mineral Resources. That Target is 10-22 Mt at
300-550 ppm U3O8, for 12-16 Mlb.

Three phases of diamond drilling will be conducted to depths of 120m into
the area of known mineralisation in the first instance, then
to 400m depth. A Scoping Study would follow thereafter.
The Company can’t say much more until the drilling has
been completed, especially with respect to economics, but
we can say it is a very useful and topical position to have.

The orebodies are within the already granted mining rights
so apart from any additional regulations that may apply to
radioactive materials, most of the regulatory hurdles have
been satisfied.

Being stand-alone orebodies, any mining
would be ancillary to the gold mining operations, though
there will be some efficiency with shared infrastructure.

That leaves open the opportunity for WWI to joint venture
or sell the uranium assets to a third party uranium
specialist, if that makes sense, or it could exploit the
orebodies itself. So far there has been no reflection of the
potential value in the share price, but we expect that to
change.

DFS upgrades NPV by US$20m

WWI has also reported an upgrade to the numbers for the
Qala Shallows Phase 1 development that gives a steady state AISC of US$962/oz, down from US$1,028/oz.

This is noteworthy in that it includes a doubling of the diesel costs.

The NPV increased from US$151m to US$180m. It is
important to note that this relates to the early stage
development, not the entire Witswatersrand Basin Project.
Nevertheless, it still encompasses gold production of
668,000 oz at an annualised rate of 55,000 oz p.a. The
total resource available to WWI is 74% of 4.28 Moz.