West Wits Mining (ASX:WWI): Interview with Chairman Michael Quinert

February 14, 2022

video, West Wits Mining, WWI

Summary

West Wits Mining

We spoke with West Wits Mining‘s Chairman Michael Quinert about the prospects of the Witwatersrand Basin Project in South Africa and the near term revenue coming from the Early Mining Initiative. Project financing for the Qala Shallows operation is expected soon.

Full transcription below.

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Transcription

Stuart: Hello and welcome to Stocks Down Under. My name is Stuart Roberts, and I’m one of the cofounders of our publication. And joining me once again from the great state of Victoria, and I’m seeing you’re in Sorento right now. Michael Quinert, chairman of West Wits Mining, ASX:WWI. Good morning, Michael.

Michael: Morning, Stuart. How are you? Good to be with you.

Stuart: It’s Wednesday, the 9th of February, 2022. Now’s a good time to be chairman of West Wits Mining. You’ve come through the feasibility work on Qala Shallows. And very soon we’re gonna be processing the first ore in about 20 years from the area that DID dropped, and you and your colleagues have picked up in the meantime.

Michael: Yeah. It’s a very exciting time, Stuart. We’ve got probably 50 to 70 people on the site at the moment. That’s increasing every week as we ramp up the development and the mining program. We should be in production, we will be in production in the next few weeks before the end of February. And it’s very exciting. I’ve also got my first trip approved to go there. I’m going there in two weeks, I’ll be able to actually see it for the first time in two years, and get back to saying that it’s real.

Stuart: Yeah. Now, we’ve touched on this before, the Witwatersrand Basin Project that West Wits Mining is being built on. At the moment, you’ve got a resource of 4.2 million ounces after a recent upgrade. And that’s after giving away part of the resource, given what’s on top of where that resource is. But buried in the ASX literature from years ago is a JORC-compliant estimate of about 12 million ounces. So we’re starting with four, but there’s a heck of a lot where this project can go to if the price is right.

Michael: That’s true, Stuart. I think it’s pretty much a unique sort of feature of this project is that there’s not many projects where you actually have, you’re rehabilitating, effectively, an historical JORC resource, which I think 20 years ago was 12.8 million ounces, relatively compliant with JORC at that time. So, what we’re doing is looking at a prudent and measured way to bring things back on at the right time and with the right capex. But we have that optionality with metrics changing, or gold price changing, or getting more adventurous. I mean, our programs have been designed to be robust and prudent. But if we swing the bat here, there’s a lot of gold there still to get out. So, I think that gives us a sort of an upside feature and optionality in this project that you don’t see very often.

Stuart: Certainly. And what’s also very interesting is the early mining initiative, which I alluded to a second ago, which is about to get going, you didn’t even model that into the feasibility work for Qala Shallows. But what that gives us is maybe 9 or 10 months to, you know, give the team a good shake down, in terms of working together. And then, obviously, by that stage, we’re hoping to have the project financing for Qala Shallows proper. So, this story keeps getting better from multiple angles.

Michael: Yeah, we’re excited about the early mining initiative. It arose out of a safety inspection visit we did last year, sorry, November, 2020, actually, to check the workings. And the guys, you know, obviously identified there’s a lot of remnant material sitting around in ore stopes that have been half-empty, ready to process. This mine closed in a rush 20 years ago, and basically closed over a two-week period, we’re told anecdotally, and therefore there was a lot of, if you like, stock in tray sitting on the ground ready to process. And so, really, the early mining initiative that we’re starting this month is about recovery of that ore that was really…had already been extracted, ready to mine.

So, that should take, you know, it could take 8 to 12 months to clean up while we’re also preparing for the formal mine plan under the feasibility study to commence. So there will be an overlap where we’re doing both. And you’re right that none of this early mining initiative is counted or within the production profiles we’ve released. It’s all a bonus. But more importantly, I think, as you touched on, it really provides, I think, a dress rehearsal for the company to show its mining, it shows our constituents, our stakeholders in the community, it shows our contractors, it shows our peers in the area, the majors still operating in the area, that we are ready for business and operating. And I think that’s a big psychological boost for the company and for its external image.

Stuart: Certainly. And talking with you and your team, what’s impressed me is, as you say, that mine closed in a hurry, in a matter of weeks, and yet the infrastructure and the quality of the shafts has actually surprised some of your engineers with how little work needs to go in to rehabilitate this mine, as far as Qala Shallows is concerned.

Michael: Yeah, exactly. I mean, the quality of the South African engineers stood the test of time. And these workings have been found to be, by geotechnical people, in really good shape. I mean, most of what we’ve been doing the last three or four months is cleaning out areas, you know, where mud and slush has collected through rainfall and so forth. And also, we’ve been broadening the [inaudible 00:05:12] that we’re using and putting steel-framed structures in it to strengthen it, just to get…for the modern equipment, trackless vehicles, we need a bit more room. So that’s what most of the work has been about, not actually changing what was there, but broadening it and enhancing it.

Stuart: Right. Now, it’s February, 2022 at the moment, if we’re having this discussion a year from now, what we hope basically is for the mine to be fully funded. And then switch into Qala Shallows proper, and ramping up to the production profile there. What’s the capital need? And what strategies are you pursuing to get that?

Michael: Yeah, the capex on the project is about 70 million Aussie dollars, which is fairly low by standards, given the production profile.

Stuart: Yeah. I mean, how do you say chicken field in Afrikaans, is what I say.

Michael: Yeah. Well, you know, I think that’s only the stage one. I mean, that’s the stage one of what we’ve done, the feasibility study on the BFS for Qala Shallows. And that leads to a sustained production over seven, eight years of about 55,000 ounces a year. But it will go up high when we open up the other areas. But that initial capex is a pig funding requirement of about 70 million Aussie, I think it’s 50 million U.S. And we are well advanced in terms of that process.

I mean, we have engaged a very reputable financial consulting firm, Toram Capital [SP] in South Africa, who are experienced in this and have done a lot of deals. They have put together their own models for us. Gone through and done due diligence on our models, and we’re getting ready to sort of go out to the market on that. And they’re pitching for, you know, the best type of tier one finance we can get, because they think that’s very doable. So, we hope that that will be… Well, we’re planning to have that sort of sorted out in the next three or four months.

Stuart: Certainly. And, finally, interesting uranium angle here, which perhaps a lot of investors who know West Wits Mining aren’t necessarily familiar with, talk to us about how this wonderful company could also be a uranium play.

Michael: Yeah, there’s a unique situation that the Bird Reef sequences, one of their Reef packages within the property carries gold, and it’s actually sort of stage five of our scoping study is to extract gold from the Bird Reef package. But there’s two sort of main horizons in the Bird Reef package. And I won’t get too technical, because I’m not a technical guy, but one carries all the gold and one carries uranium. And in fact, historically, there’s been a lot of uranium mined in this area, and I think the historical record show some 37 million pounds of uranium. So, back in the last sort of uranium cycle, 2008, we saw the opportunity, drilled out some areas of the Bird Reef, and released what they called then a conceptual target under the old JORC code.

When uranium, you know, it was obviously last year starting to get attractive again because of the the global warming issues and so forth. And we really looked at those records. And we we went back and redid the target as a new exploration target under the current JORC, and released that I think in October of 12 to 16 million pounds. So, it’s got a…and we’ve really got plans to do some further drilling and extend that, because there’s about 3.5 kilometers of that stripe that hasn’t been taken into account in the original, or in the current exploration target, either.

So, we think there’s a lot of upside on the uranium. And it’s in an area we wanna mine the gold anyway. I mean, I think there’s something only like a couple of meters between this reef horizons. So, it’s come up as a potential real bonus for us in terms of that area. So we will be working on that. And we’ve got our exploration plan close to finalization. So, there’ll be more news coming on that.

Stuart: All right. So, we’ve got multiple angles in which the West Wits Mining shareholders can make out reasonably well. It’s fair to say, Michael, you’re pretty optimistic about the course of 2022.

Michael: Well, it’s easy to be optimistic, I suppose, for the last two years from everyone’s perspective. In terms of like jumping out of a cold shower into hot shower. Yes, it does look good. I mean, it looks like we’ve…you know, obviously, in some ways, COVID didn’t affect us as much as it could have, because we were really in, you know, permitting stage, and finalization studies stage, and development of the conceptual plans during that period, which doesn’t require us to be on the ground and didn’t require us to have a lot of staff. So, now that the restrictions are starting to lift, you know, and we’re getting into our full swing of development and production, the timing has probably being good for us. So, yeah, I’m very excited.

And I’m also very excited about getting back there. We’ve got a lot of people supporting us. In fact, the Australian government have been supportive. They’ve taken an interest through the high commission there. I think we’ve got a schedule to meet them in Pretoria and have morning tea with them and take them on a site visit. So, it’s been really good that people that have been looking to support the project from all angles.

Stuart: Now, reminder to the viewers, we call it Qala because Qala is one of the local language, meaning new beginnings. So, new beginnings for West Wits Mining in 2022.

Michael: Exactly, yeah. So, Qala will be, hopefully, in name, and indeed the right name for this project.

Stuart: All right. Mike Quinert and Jac van Heerden, and the rest of the team at West Wits Mining, well done. And here’s to a great 2022.

Michael: Thanks, Stuart. Thanks for your time.