West Wits Mining Limited (WWI) Earnings Call Transcript & Summary

That's exactly what it is. So it's actually the maximum capital required or funding requirement at that point. So from that point onwards, we start to become cash flow positive and then you actually start paying back on that. And our payback was always 8 months after that. And like I mentioned, commercial production at these gold prices as if it stays where it, we're actually going to be that time when we actually start paying back, which means that maximum capital requirement will actually come down. So once again, if we do what we need to do and we follow the program as we are doing currently, then we actually got upside on the results of this project as well.

Fantastic, Rudi. Now, moving towards the surface infrastructure and power at the project over the quarter. So the surface infrastructure went from 45% to 61% completed just this quarter. Can you tell us what has been built and what will grid power in early 2027 mean for the operation?

Yes. So the big focus was to really -- and once again, this -- the whole project was scheduled and designed with this different procurement packages so that we can manage our cash flow and make sure that we've got good cost controls in place. Now the big focus was actually to get first, the environmental requirements in place, which is the pollution control dam and all the ROM pad, for instance, as well, just to make sure that we don't have any leaching into the environment or effluent runoffs and that. So that is going very well. The ROM pad is really close to a point of completion, which we target by the end of this year. In the same period, that's the pollution control dam as well. And then the big focus then is to get our grid power and our water supply in place, and that's a big focus. We intend to get the grid power in place by the first quarter of next year, which is also not far away from now. Now the big thing for that is that, that will really bring down that all-in sustaining cost. Our exposure currently to diesel is about 8% of our cost. And as I mentioned previously, that's very low in comparison to other operations because we use hydropower. But that will then really reduce from -- pretty much from 8% to 3% in that all-in sustaining cost. And that's one of the big things that we need to get in place. And then yes, our water supply, that's straightforward. The surface infrastructure is really running to schedule, below budget. That's not my main concern, what we keep -- that keeps me up at night. The mining is much more important. But everything is running very well, as we mentioned and as you could follow. And once again, the proof that we passed that second drawdown is exactly the proof that there's somebody that's looking after what we are doing, auditing us, doing our due diligence on our results. And it's -- the banks are happy. So everything is on track.

Fantastic, Rudi. So of course, we remain on track to complete all the critical surface infrastructure in Q3 of 2027. That's the target. But moving forward from Qala Shallows, Rudi, many shareholders were really looking forward to Project 200 scoping study results. Where has that landed? And what happens next?

Okay. Yes. So we've completed the Project 200 scoping study. In consultation with the ASX, we -- there was some issues regarding the information that we got if we could actually bring it out to public. So for that reason, we didn't publish it. But the reality is that the project came out extremely positive. We've increased our life of mine to 35 years at a production rate of 200,000 ounces, which is exactly what we wanted to do. So the issue around why we couldn't really release it was the detail on that was really regarding the inferred -- the ratio between the inferred versus the indicated and measured. Now, our big focus now is there's still a lot of work that we can do in terms of the resource models, in terms of bringing a bit more of that measured and indicated early upfront in the Project 200, which will then satisfy the requirements of the ASX. And then obviously, we always knew that there will be some optimization that we can do in terms of the scheduling. Now all of that work is currently happening. And the one thing about the scoping study, that the scoping study is really there to advise the company on the way forward in terms of additional drilling to up that. So we need to understand this is not a financial forecast. The scoping study is really a study to take us to the next level, which will then be a pre-feasibility study or if we've got enough information, we will then start with the DFS, which will then ultimately lead into actual production. So first signs very good that the scoping study is great. It's a great business case. The fact that there's a lot of optimization opportunities in that much better. measure that we can bring into the schedule to improve on that. There's a lot of that inferred, that indicated, measured that we can bring into the schedule to improve on that. We are working on that. So we will bring that information out as quick as possible. We want to bring it out as quick as possible because it's a great story. So yes, that's happening as we speak.

Yes, that's fantastic, Rudi. Ultimately, a very, very positive outcome. It's just unfortunate that we couldn't release it because of that inferred indicated category issue, which we're working to resolve. Now Rudi, beyond Qala Shallows, so Bird Reef Central, can you update us on that uranium gold project and what's happening there?

Yes. So we are planning to -- well, it's already November. As we mentioned, we are going to mobilize now early November. It's actually in the next couple of weeks. The team is working hard to get the rigs on the ground. To start with the drilling program that we set out. It's just a bit of below 6,000 meters of drilling that we plan, 17 holes that we plan. So previously, we've done 4 holes. But the ultimate idea is that, there's about 4 kilometers of strike distance that we would like to define. Currently, in our resource itself, the actual contribution from the Bird Reef Central in terms of gold is not a lot. I think it's about 120,000 ounces that's in there from the 7.2 million that we've got. So we do believe that there's a lot of additional gold that we can add to the resource itself. And then the big thing for us with that whole package, we do have the Monarch that includes the uranium, which is currently an exploration target, which we would like to really just convert it into a compliant resource. So all of that work going to -- it's going to start in November this month, early November. So we expect to by end of November, the first drilling to start happening. And then as the results come out, we will make that available. I think another exciting thing for us is when we look at this project from a gold point of view, we used a really, really conservative gold prices. So I'm actually quite excited to start looking at this at current gold prices and where we are going in terms of future, which means this can actually exactly also create a fantastic opportunity with exposure to 2 different commodities at a higher gold price. This is really also a greenfields project within these old mined-out areas, which it's shallow mining, low all-in sustaining costs. So I think there's a lot of opportunities that we can get out of this little project. So very excited about it.

Fantastic, Rudi. And I think it's just -- it's very exciting to have that sort of dual commodity exposure while we continue to work on the development and the ramp-up at Qala Shallows, having Bird Reef and that uranium gold upside and consistent news flow coming out for shareholders to see the progress and advancement of that project as well is going to be very exciting news flow coming out in the next few months as well.

Right. That's exactly the exciting part.

So Rudi, now there was a question that's just come through from the chat group, and I know this is going to be an easy one for you. But for those who are new to the story, they want to know where is that 200,000 ounce of gold going to be produced once Qala Shallows hits that ramp-up stage? And do they need to sign -- and do we -- sorry, not they, does the company need to sign an ore purchase agreement?

No. So at scoping study, we look at different scenarios in terms of business cases. Now there's a lot of spare capacity around us. And that's how we could have actually started Qala Shallows with very low capital input. There's a lot of capacity. So the option is either toll treat still at different plants around us with that spare capacity, which will require some agreement with them. Currently, our agreement that we've got with Ezulwini is really straightforward. It's a cost-plus agreement. We pay for the processing cost with the margin and then ultimately, we get the spot price at that given time, mid-month and end of month, very straightforward. So it's actually a toll treatment agreement type of setup. But there's other scenarios where we are also looking at building our own plant. It will justify 200,000 ounces will justify something like this. So that's also built into this. We also have the scenario where we might have a JV with somebody else to actually set up a plant. So all these scenarios are actually have been looked at. It's in our model. And obviously, we keep it in that model as that commercial discussions go forward. We are constantly busy with that type of discussions, and we do have that relationship with producers around us. And so at this stage, we're not sure what route we can do because this will be driven either by commercial or environmental permitting aspects. We're also very close involved in discussions with the stakeholders in terms of legislation and permitting on that side. What can we do with a new plant? So those options are still open, and there's a few scenarios that we can follow to have the best business case out of Project 200.

Yes. Thanks, Rudi. I think what's really critical for shareholders to understand is that it's a really low CapEx scenario for West Wits at the moment, given we have that ore processing agreement with Sibanye-Stillwater near the project. And then having that optionality is key as the project ramps up and we can -- and the company starts to produce lots and lots of ounces. So Rudi, we have another question online from shareholder, who is asking more on the structure side of the company, so corporate structure. And they're asking whether West Wits would consider buying back a further portion of its BEE partners' equity stake in the future. And will it be possible while remaining compliant with South Africa's BEE requirements?

Yes. So one thing that I just want to make clear, we are already compliant. And once empowered, always empowered. So that was made clear previously as well. So if we buy back, we are still compliant. And there's always that discussions there and intentions there. We would like to do that because we do believe this is a brilliant project. And for us, there's a lot of upside and value in actually increase our shareholding in this. So that's -- the discussions are ongoing. And yes, we will release any information regarding that going forward.

Perfect. Thanks, Rudi. Now I guess just to finish, we didn't have any more questions coming through. So just to finish, how is the team tracking as the site grows? And what should shareholders be watching over sort of the next 6 to 12 months?

Yes. So the project is really tracking excellent. We've -- the banks confirmed it. They've approved the drawdown. So they've -- that they work on -- they track, if we are doing what we promised we are going to do, and that's going excellent. What to look out in the next few 12 months, we are really getting now our growth projects in place. They are funding for that. So the Bird Reef Central is kicking off. Project 200, that work is also happening as it speak. And the moment that we can actually release and we've got the alignment with the ASX, we will release that information as well. The big thing for me is that we follow that milestones and get that milestones in terms of Qala Shallows. Big things to look out is that first stopes in February, third quarter next year, the surface infrastructure is complete. Fourth quarter, we hit that commercial production in terms of the project itself. And then that ounce profile increase from next year, the 10 to 15, 40 to 45-50 in 2028 and then '29, we hit that steady state. So the big focus is on that. All of this needs to happen with the biggest safety in mind. We are striving to zero harm. So there's a lot of work happening on that. So that is also a big focus point for us that in the next year that nobody gets hit, everybody go home safely and that we really have good safety while we deliver all these milestones.

Absolutely, Rudi. And of course, you and the Chair -- Executive Chair, Michael Quinert, will be doing a bit of travel in the back end of this year in the next month.

Yes, that's correct. So from the 13th up to the 27th, we will firstly go to Europe to Switzerland. There is a good following in terms of Europe, Germany and Switzerland in terms of our project. And then we will go to the London 121 as well to present there, speak to shareholders on that side and once again to institutional shareholders, which is really important in the phase where we are currently in the development of the mine. Yes, so that's coming up now. And while the mine is in construction and the team is doing their part of the project.

Fantastic, Rudi. Well, the project, again, just to summarize, is fully funded. The schedule is set. We're ahead of schedule and sticking to budget and the momentum is obviously building by entering those stopes and getting those development meters up as well. So now it's really just about delivery, which the team -- yourself and the team continue to do. So thank you, everyone. That brings the end of today's session. So Rudi, thank you so much for your time and for such open answers. I think we've received a lot of really great feedback about the transparency of communication from the company. So please, we are always available to answer your questions. Just get in touch with us. We do have investor hubs, so you're welcome to reach us through there or please e-mail me, it's ir@westwitsmining.com. Also, there will be a recording of this webinar. So if you would like to go back and listen to some questions, please do or share with any other shareholders or investors. But thank you, Rudi. Thank you for your time. Thank you for being up so early this morning.

No problem. Appreciate it. Thanks, Jess. Thanks, everybody.