West Wits Mining: cash-flow to begin from Sol Plaatje gold project

ASX-listed West Wits Mining re-started operations at its Sol Plaatje project located within the Soweto Cluster Gold Project in June 2017.

According to West Wits Mining initial activities, including site establishment and induction, were completed and by the second week of July waste removal activities were in full swing.

Under the toll treatment arrangement with Sibanye Gold invoicing has been completed for the first batch of ore (5 600 tons) and a further circa 1 000 tons has now been processed at Ezulwini as part of batch 2.

After costs and assay reconciliations batch 1 is expected to generate over R3.55 million.

The bulk of this money will be paid by Sibanye at the end of August with a further payment following final reconciliations 14 days later.

As production is now in full swing ongoing deliveries of ore are proceeding and invoicing and payments are expected to generally occur on a 14 day rolling cycle.

This first payment will largely be applied to funding ongoing working capital needs but by late September it is expected that surplus cash will be available for distribution on an ongoing basis.

The minimum monthly ore tonnage planned for the Sol Plaatje project is 10 000 tons per month with a target maximum of 15 000 tons.

The production results above show that the Sol Plaatje project is now exceeding the minimum production target.

At the planned minimum production rate of 10 000 tons and based on current recovered grades, gold prices, exchange rates and contracted costs the Sol Plaatje project will generate surpluses of between A$260 000 to $290 000 per month of which 60% (for pits one and two) is for West Wits Mining’s account i.e. $155 000 to $175 000 per month.

On moving production to pits 3, 4 and 5 West Wits Mining interest moves to 50%. If higher than minimum tons are achieved then returns rise commensurately in line with the current set of assumptions.

The current mine plan for the Sol Plaatje project indicates production capacity for a further 210 000 to 220 000 tonnes of high grade ore over a period of 15 to 18 months.

This estimate includes a further approximately 90 000 tons from pits 1 and 2 (currently operating) and 70 000 from pit 3 at grades averaging in excess of 2 g/t with a further approximately 60 000 tons from pits 4 and 5 which is expected to deliver higher grades.

West Wits Mining consultants are currently examining options for processing of the low grade stockpile material and none of the above estimates includes any return from that ore source.

“West Wits Mining is very pleased with the progress made at the Sol Plaatje project. These results are the product of the hard work and professionalism of the team now running the Sol Plaatje project including Shango Solutions (geological), Bara Consulting (engineering), Deswik (survey) and ALS (mining) which team is led by Rob Schroder (for West Wits Mining) assisted by Eddie Milne (for our partner Elandiwave),” says West Wits Mining chairman, Michael Quinert.

“From West Wits Mining’s perspective, the appointment of Rob Schroder to oversee the project has been a significant factor in achieving these outcomes,’ he continues.

“Schroder represents a safe pair of hands who has had over 25 years’ experience in mining and engineering operations in Africa including over three years as MD of Aquarius Platinum South Africa and seven years as a director of Shaft Sinkers Africa including three years as managing director. We feel very fortunate to have Rob involved in the Sol Plaatje project.

“With the Sol Plaatje project now in full swing and cash-flow to begin shortly West Wits Mining can now turn its attention to further open cut opportunities to enhance its current production as well as re-starting its exploration program in order that we may continue to build the company’s JORC statement from the current 1.374 million ozs,” concludes Quinert.

Feature image credit: Wikimedia

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