Paydirt Article, page-2

Australia's Paydirt - August 2016
West Wits formulates first mining plan
West Wits Mining Ltd believes an upcoming small mining programme could provide a model for future exploitation of resources across its Soweto Cluster project in South Africa. West Wits announced in June it reached agreement with the South African Department of Mineral Resources to undertake a short mining campaign on the Sol Plaatjies project within the Soweto Cluster prospecting right. The campaign will see West Wits mine 1,500m of exposed Kimberley Reef outcrop to a depth of 30m before sending the mined ore to a nearby processing facility. West Wits executive chairman Michael Quinert told Paydirt the company expected to start mining by the middle of this month. “In anticipation of starting, the contractors have on their own initiative and with their own funds already started significant preparatory works at the site including pre-stripping,” Quinert said. Under the agreement, the contractor will pay West Wits for each tonne of ore removed after recovery of mining, processing and general costs. “As such, the more they take, the more they pay. The first stage plan from the main contractor provides for the removal of around 130,000t over 12 months and indications are that at least another 50,000 further tonnes are available in the second stage.” The payable rate per tonne is based on the equivalent of 0.6 g/t gold. “This would equate to around $US25/t taken at $US1,300/oz gold,” Quinert said. “Our consultants are currently analysing, in conjunction with the contractors, proposals for expanding the project even further as the data is indicating wider sections of the reef are worth taking. As such there is scope for a significant expansion of the Sol Plaatjies project over that outlined above.” Following mining of the reef, the company will progressively rehabilitate the area to allow the landowner to start development of an affordable housing project which will incorporate open parkland over the mined-out areas. If the project proves successful, West Wits thinks the same model could be applied to other defined resource areas within the Soweto Cluster project. The area, on the edge of Soweto township, Johannesburg, is wracked with environmental legacy issues from more than a century of gold mining and the community is also experiencing tension from the arrival of illegal miners, or zama zamas, who are keen to get their own hands on the remnant ore. Sol Plaatjes has been chosen for the first trial project because of the extensive presence of zama zamas and Quinert has previously heralded the Government and community support the company’s plans have garnered. “There is a big illegal mining presence in the area and the DMR has identified it as a problem and it is a good target for us so it suits everyone to start there,” Quinert told Paydirt earlier this year. He said by focusing on the most easily winnable, near-surface resources, West Wits could develop a low capex operation. “The first targets we are looking for are those where mineralisation is outcropping at surface, many of which are running at 4 g/t gold. They provide an obvious opportunity for simple, clean slot mining where you can take a 15-20m Illegal mining is rife on West Wits’ Soweto Cluster project but the company believes its impending short mining campaign can deliver environmental and social benefits to the Soweto community Michael Quinert AUSTRALIA’S PAYDIRT AUGUST 2016 PAGE 95 shelf out to expose the reef, mine it and then rehabilitate by backfill. “You could contract out most of the work and there are plants all around us through which we could toll-treat. That means we are not spending the capital and we can generate cash flow, allowing us to avoid going back to the market but still keep going until we develop a full mine plan for the entire lease.” Quinert said the signing of the agreement with the landowner and the DMR in June demonstrated “the growing spirit of co-operation” between the various parties. “The company is confident Sol Plaatjies will provide a pilot project model for several similar opportunities across the Soweto Cluster area where Witwatersrand reef are still in situ,” he said. West Wits has undertaken trenching and sampling across Sol Plaatjies and other targets across its Soweto Cluster lease which was among the most prolific gold-producing areas of the Witwatersrand Basin in the 1980s. Quinert said the results of the exploration work would be collated ahead of the finalisation of the project plan-of-works. Cash flow from Sol Plaatjies will allow West Wits to pursue its greater development goals with geological consultants Shango Solutions having already undertaken a detailed review of the entire tenement package, including extensive historical maps and data. “Targets have been prioritised for discreet exploration work to fill in the gaps and accelerate the resource generation process,” Quinert said. “Sol Plaatjies is the catalyst for the realisation of our broader plans at Soweto. The progression of these plans should provide a steady flow of updates over the course of the next 12 months.” West Wits has several similar historical mining areas on the Soweto Cluster project and will likely move onto multiple targets once Sol Plaatjies has proven the model. “We will probably look for the flexibility of five or six targets,” Quinert said. “If we can keep that many faces open, using manual mining at shallow depths feeding one central mill, then you are de-risking by diversifying the resource. “These leases could turn into a 100,000 ozpa producer over 10 years,” Quinert said. “But for that to happen West Wits will have to gear up which would require significant re-skilling and restructuring of the company.” The remnant resources across the Witwatersrand have proven enticing to a number of junior miners over the last two decades but many have failed to find an economic path to development. West Wits’ strategy is to focus on shallow remnant resources which will require little capital for development. In June, the company released updated resources for the Marquis and Radiant projects, adding 114,000oz gold to the global resource at Soweto which now stands at 12.3mt @ 3.36 g/t for 1.33 moz gold, including 884,800oz in measured and indicated categories. “The continued growth of the resource base on the Soweto project validates the company’s strategy of detailed investigation of historic and previous resource estimates and their opportunities to be developed in the current environment,” Quinert said. “This is an exciting time for West Wits as we progress towards the completion of mining studies on several of our priority projects.” Exploration has been recently focused on the 11 Shaft target on the Rand leases. The Bird Reef package was previously mined in this area via open pits on both sides and from underground on the 7 Level. Drilling in April revealed extensive unmined reef on the ground with 13 of 14 holes drilled returning reef intersections, Quinert saying the results vindicated West Wits’ strategy. – Dominic Piper