This article was written in 2019, how long does this transition into a gold producer take?

West Wits Mining prepares for transition to gold producer with Witwatersrand development driven by executive appointment

West Wits Mining Ltd (ASX:WWI) advanced its near-development Witwatersrand Basin Project in financial year 2019, shifting its focus towards underground mine development as it increases its gold resource and continues exploration.

The company delivered an update mineral resource estimate of the Kimberley Reef which added 428,000 ounces of gold to the global resource, growing the Witwatersrand global MRE to 3.65 million ounces with 2.4 million measured and indicated ounces further de-risking the project.

The uplift in resource and subsequent analysis provided management confidence that the geological footprint of the project had potential to support an underground mine program of up to 100,000 ounces a year.

Management hire to drive project towards full scale mining

West Wits chairman Michael Quinert in his annual letter to shareholders said the company had continued its transformation during FY19 into a junior gold producer, targeting more than 80,000 ounces of gold a year.

Quinert noted the mining right application, now in the later stages of the granting process, for the Witwatersrand Basin Project, which hosts a 3.65-million-ounce JORC resource.

Johannesburg-based mining engineer Jac van Heeren was hired as chief executive officer of West Wits’ South African subsidiary to drive project development towards full scale mining.

His appointment provided West Wits the opportunity to review its strategic plan and core activities, resulting in the decommissioning of the Kimberley Central Open Pit Project’s production in July.

Taking project into underground mine development

Quinert added: “A key element of the board’s strategy was to introduce an experienced mining executive to take WBP into underground mine development.

After reviewing several recommendations, the company appointed Jac van Heerden, a mining engineer who holds an MBA and was president of ERG Africa’s Boss Mine in the Democratic Republic of Congo.

“Jac has 20-plus years’ experience in South Africa, the having developed and operated mines locally before running the copper-cobalt mine in the DRC which employed more than 3,800 people.”

Highly prospective Australian projects

Australian projects saw continued development, with the granting of the Mt Cecilia exploration licence in May which concluded a protracted negotiation process with the native title parties.

During this period, the tenement’s surrounding area and the Paterson province to the east became a focal point with the release of notable exploration results at Rio Tinto Ltd’s (ASX:RIO) WINU project and the Havieron project held in joint venture by Greatland Gold (LON:GPP) and Newcrest Mining Ltd (ASX:MCM).

Mt Cecilia’s prospectivity was further highlighted by Rio Tinto’s expansion in the region, including exploration licence applications which border more than 60% of the tenement boundary.
Desktop studies at Mt Cecelia indicate the presence of the Yeneena group, the reported host of mineralisation at Rio’s WINU project, as well as the vanadiferous north-trending mafic dyke sequence mapped by Rumble Resources Ltd (ASX:RTR) at their Braeside project to the south.

Farm-in agreement advances Tambina

A farm-in agreement was signed with First Gold Limited (ASX:FAU) for remaining Australian project Tambina, which is near two FAU tenements providing synergies for Tambina to advance while West Wits focuses on Witwatersrand.

The agreement also provided $240,000 in the form of initial consideration and 20 million West Wits shares, allowing the company to accelerate development activities.

FAU’s existing project footprint and experience in the Pilbara region will allow the ramping up of exploration and development activity.

Dilution of Indonesian interest

West Wits’ board continued assessing options to progress the companies Derewo River Gold Project in Papua with the existing JV partner, including the potential partial divestment of West Wits’ share to facilitate new capital.

The company has since entered into a binding heads of agreement with Far East Venture Group providing a further dilution of West Wits’ interest in the Indonesian group to 10%.