West Wits’ Qala Shallows secures $50M funding—first new underground gold mine in 15 years in South Africa, with strong DFS, 70,000 oz/year & 17‑year revenue forecast.
South Africa is gearing up to launch its first new underground gold mine in 15 years, marking a significant development for a nation once renowned as the world leader in gold production.
Qala Shallows gold project
The Qala Shallows project, being developed by West Wits Mining Ltd., is located on Johannesburg’s western outskirts—an area deeply rooted in history following the gold rush of the 1880s. Scheduled to begin operations next year, the mine will produce around 70,000 ounces of gold annually—modest by global standards, but a welcome revival for South Africa’s declining gold industry.
Investing roughly $90 million, West Wits estimates the mine will generate about $2.7 billion in revenue across its 17-year operational lifespan. Operating costs are projected at under $1,300 per ounce, yielding an attractive margin in current bullion markets. The underground mine will reach a depth of approximately 850 meters (2,788 feet)—a “shallower” depth compared to South Africa’s notorious mega-deep mines stretching beyond 3 kilometers, offering considerable advantages in logistics, safety, and energy usage.
IDC Absa loan gold mine
For funding, West Wits secured about $50 million in loans from the state-owned Industrial Development Corporation (IDC) and Absa Group Ltd., with processing of mined ore to occur at Sibanye-Stillwater’s existing facility—circumventing the need to build costly on-site processing infrastructure.
A recent Updated Definitive Feasibility Study (DFS) reveals thriving economics: 383,934 ounces of Gold Reserves within 4.6 million tonnes of ore (grading 2.6 g/t). Production is extended to 12 years at steady state, up from 9 years previously; the total output is now expected to reach nearly 944,000 ounces of gold over an estimated 16.8-year life-of-mine.
Mining feasibility study South Africa
The updated DFS estimates:
- A post-tax Net Present Value (NPV) of $500 million—a 97% leap from previous forecasts.
- An Internal Rate of Return (IRR) soaring to 81%.
- Free cash flow forecasts expanding from $522 million to $983 million, marking an 88% increase.
- Peak funding capped at $44 million, with an 8-month payback window following development.
Mobilization is already underway—early-stage activity includes refurbishing access points, deploying critical surface infrastructure, and initiating ore stockpiling at the site, all ahead of first production, anticipated in early to mid-2026.
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