De-risking a new chapter in South African gold mining

West Wits operational team entering the Qala Shallows portal. Strong on-site leadership and disciplined execution underpin the company’s commitment to safe, structured mine development. Image supplied by West Wits Mining .

Commissioned by specialist mining financier Nebari – a key funding stakeholder in Qala Shallows – the due diligence assessed the technical, operational and execution risks associated with the project. According to Joseph Mainama, director, partner and principal mining engineer at SRK Consulting (South Africa), this provided an evidence-based view on any material issues that could compromise funding, development or long-term operability.

Joseph Mainama, director, partner and principal mining engineer at SRK Consulting (South Africa). Image supplied by SRK Consulting (South Africa)

“The client wanted comfort that there were no risks that could pose a significant threat to the project going ahead sustainably,” said Mainama, who led the assignment for SRK Consulting. “Equally important were questions of execution readiness: were the building blocks in place, were the schedules realistic, and were the key milestones achievable in a way that supported the funding and repayment profile?”

Distinctive features

The Qala Shallows mine, part of West Wits Mining’s broader Witwatersrand Basin project, features distinctive technical aspects compared to other gold operations in the country, he pointed out. As a shallow, mechanised underground mine, it contrasts starkly with the traditional deep-level, labour-intensive operations that dominate the Witwatersrand.

Access to the underground workings is via decline access from the existing Qala boxcut, with extraction focused on multiple reef horizons, including the K9A and K9B reefs. The selected mining method is a mechanised variant of conventional breast mining, using trackless equipment for development, loading and haulage.

“From a technical risk perspective, the relatively shallow depth of the operation significantly alters the design envelope,” Mainama explains. “Ventilation requirements are modest by South African gold mining standards, pumping duties are materially lower and overall infrastructure intensity is reduced.” The cooling of intake ventilation is not necessary due to the shallow depth of the operation.

However, this same shallow geometry introduces other design considerations, particularly in relation to surface interaction and subsidence management, which formed part of SRK Consulting’s technical review.

The project’s definitive feasibility study forecast gold production of some 944,000 ounces over a 17-year life of mine, with annual steady-state production of around 70,000 ounces for the first 12 years. The operation is expected to contribute more than $1,15bn to the national economy over the mine’s lifespan, creating more than 1,000 direct jobs.

Aerial overview of the Qala Shallows Mine site within the historic Durban Deep area. The layout illustrates key surface infrastructure, operational facilities and the footprint of the project. Image supplied by West Wits Mining.

Toll treatment

Another defining element of the project configuration is its use of toll treatment at an existing processing plant, rather than constructing a dedicated plant and tailings storage facility. According to Kenneth Mahuma, design engineer at SRK Consulting (South Africa), this materially reduces upfront capital and execution complexity; at the same time, it creates technical and contractual interfaces that needed to be robustly structured over the life of the operation.

Kenneth Mahuma, design engineer at SRK Consulting (South Africa). Image supplied by SRK Consulting (South Africa)

“From an engineering and project delivery perspective, toll treatment by a third party changes the risk profile quite significantly,” said Mahuma. “This option removes considerable construction and commissioning risk, but there needs to be certainty about the material handling, logistics and processing interfaces. These must be properly defined to ensure that capacity is secured for the life of the mine.”

The due diligence study was conducted as a systems-level interaction, to deliver a fully integrated, multidisciplinary outcome, said Mainama.

Full spectrum of disciplines

“We covered the full technical spectrum, including geology and resource and reserve compliance, mining method and mine design, geotechnical considerations, ventilation and engineering infrastructure,” he explained. “We also examined environmental, social and governance (ESG) risks, hydrology and geohydrology, capital and operating cost estimates, metallurgy and toll treatment arrangements, as well as project execution planning and organisational capability.”

He highlighted that the due diligence exercise was not only to identify potential risks, but to make recommendations to assist the management team to implement effective risk mitigation. SRK Consulting also undertook scenario and sensitivity analyses to test the project’s robustness against deviations from base-case assumptions.

“We looked at scenarios such as reduced production rates,” said Mainama. “Such scenarios give the client a quantitative feel for how sensitive the project is to key value drivers and whether it can still sustain the funding structure under less favourable conditions.”

Reporting codes

A further critical layer of the review related to mineral resource and reserve estimation – particularly the compliance with the JORC Code, given West Wits Mining’s listing in Australia.

“Non-compliance with reporting codes is a potential funding showstopper,” noted Mainama. “So part of our mandate was to confirm that the resource and reserve statements, as well as the underlying technical work, were appropriately aligned with the relevant codes and standards.”

Importantly, the due diligence process itself was structured as an interactive, iterative technical engagement rather than a purely document-based review, he continued. SRK Consulting’s specialists conducted a detailed data-room review, followed by site inspections and technical workshops involving West Wits Mining’s management and engineering team, as well as Nebari representatives. “This allowed issues to be interrogated in real time, ensuring that technical findings were immediately understood in the context of funding risk and execution priorities,” said Mainama.