Mining report

1. T
HE “RAND” OR “REEF”,
as the Witwatersrand is
sometimes known, is famous
for being the source of 40%
of all the gold ever mined – more
than 1.5 billion ounces – and has the
honour of having the South African
currency named after it.
But while most gold explorers
will only ever get to dream about
tapping into the treasures of the
Witwatersrand, one Australian
company is currently assessing
20 kilometres of leases on the
West Rand goldfields that have
produced more than 61 million ounces
of gold and 37 million pounds of
uranium over the past 120 years.
West Wits Mining listed on the
Australian Securities Exchange in
December 2007 as a joint venture
between ASX-listed Mintails Limited
and JSE-listed DRD Gold. The
company was formed to acquire a
suite of historical leases on the West
Rand goldfields of the Witwatersrand
Basin to explore and evaluate for gold
and uranium.
West Wits has certainly enjoyed
the fruits of its first 18 months of
labour, based on a simple strategy
that focuses on possible open
cut mineralisation to kick start
production; a concentration on
completely unmined reefs – intact reef
from surface and open at depth; and
unexploited parallel reefs adjacent to
existing underground workings.
“Essentially our initial business
exploration strategy has been to
look for possible low-hanging fruit
conducive to open cut operations to
provide the company with early cash
flow before beginning to assess the
more significant resource potential
from our underground targets,” West
Wits Mining managing director Grant
Ferguson told RESOURCESTOCKS.
“When we listed we started an
aggressive exploration program of
27 kilometres of reverse circulation
and diamond drilling and identified
14 targets.
“Believe it or not, there are
sections of unmined reefs in
Witwatersrand which have not been
mined for a number of reasons.
The commodity price at the time,
a reluctance to mine uranium and
mine closures because of economic
pressure have all been contributing
factors.”
About 10km of the Bird Reef
remained untouched because the
company mining the region at the
time was not interested in uranium,
despite the fact that the other 10km of
the reef on their western half of leases
had historically produced 37Mlb of
uranium.
Another key factor that has
enhanced the value of the prospects
has been the wealth of historical data.
West Wits’ exploration model
is based on months of research
and historical data which has
indicated that parallel reefs do exist.
This research involved data from
approximately 19,000 maps.
“We’ve repeatedly been told
there’s nothing left on the leases,
everything’s taken, but when we
receive intercepts of 5 metres at
6.49 grams of gold to the tonne at
21 metres depth, 5.5 metres at 4.27
grams to the tonne at 7.5 metres depth
and 2 metres at 7.85 grams of gold
to the tonne at 16 metres depth, it
confirmed that there are parallel reefs
and there are high grades,” Ferguson
added.
“We don’t know the exact reasons
why they have been left, most likely
they weren’t economic at the time, but
I’m talking about zero to 85 metres.
“Our exploration model is
concentrating on surface to 600
metres, we’re not interested in the
very deep material at present as we
have a water table at 600 metres and
a lot of targets to still thoroughly
investigate.”
The mines on the West Wits leases
have a long history dating back to
the late 1800s and early 1900s, when
traditional mining in the area started
at surface and worked its way down.
Some of the mines were originally
shut down in the 1960s before being
opened again briefly in the 1980s to
1990s.
When purchasing the leases, the
company was confident there was
still potential for sufficient resources
remaining and results to date have
certainly confirmed that this belief
was correct.
company profile
40
Words by RON BERRYMAN
WEST WITS MINING
“Believe it or not, there are sections of unmined reefs
in Witwatersrand which have not been mined for a
number of reasons.”
GRANT FERGUSON
MANAGING DIRECTOR
WEST WITS MINING
FAMOUS GOLDFIELD
HAS PLENTY TO OFFER
An address on South Africa’s fabulous Witwatersrand goldfields is the kind of start any aspiring young
gold explorer would be thankful for.
SEPTEMBER/OCTOBER 2009 RESOURCESTOCKS

2. 41
The company’s confidence was
also supported by the performance
of neighbouring mines. Central Rand
Gold, adjacent to West Wits’ leases,
has identified more than 35Moz of
gold over approximately 40km of
Witwatersrand reef and is currently
finalising its initial ore reserve
estimation.
To date, West Wits has identified
a JORC-compliant gold resource of
468,000oz from four near-surface
targets. The company’s aim to move
to a cashflow situation as soon as
possible is now very close to reality,
with feasibility well underway.
“We’re currently discussing
toll treatment agreements with a
number of gold processing operators
in the area as well as pricing, plus
engineering design to assess the
financial viability of the project,”
Ferguson said.
“We hope to wrap this up in
August and present it to the board and
work from there.”
The company is currently
concentrating on the Emerald lease,
where it has established a measured,
indicated and inferred gold resource
of approximately 104,000oz at an
average grade of 1.81gpt down to an
average depth of 85m across a 2km
strike length. The eastern side of the
resource, known as West Lancaster,
contains an additional 38,200oz at
2.12gpt.
With a target date at the end of
2009 to start production, the company
has completed ground surveys to site
the Emerald open pit operation and
infrastructure, while pit optimisations
and environmental studies have also
been started.
While the leases have mining
rights, they need to be amended
to bring them up to date and the
company is hopeful of submitting the
required documentation to the South
African Department of Minerals and
Energy in August, pending the study
outcome.
“The upgrade of the Emerald
mineral resource to a predominantly
JORC-reported measured and
indicated classification continues to
validate the company’s ambition to
have the project in production at the
end of 2009,” Ferguson said.
“The proximity to potential toll
treatment facilities and the shallow
depth of this resource indicates there
are reasonable prospects for eventual
economic extraction.
“We’re looking at contract mining
and toll treatment through a number
of plants in the region as we don’t
believe building our own plant
would be a wise use of money in our
move to reduce capital expenditure
costs.
“Our aim is to achieve our goals
as quickly and as cheaply as possible
by utilising the spare capacity in the
region.”
West Wits has managed its funds
prudently during the economic
downturn, reducing exploration and
spending valuable time to study
results and historical data on the areas
under investigation.
A major factor in the company’s
ongoing development of the leases
has been careful cash management,
which shows in its strong cash
position with $A6.8 million in the
bank.
As an indication of the importance
placed in this project, Ferguson has
moved with his family from Australia
to South Africa to direct operations
and cut down on travel time and
costs.
The company is looking to start
drilling again in the next quarter,
having identified additional targets
in the Main and South reefs on leases
northeast of Emerald.
Cash flow from Emerald
production will be used for surface
drilling. A decision can be made
to look further underground as
the company is keen to access
underground workings and test for
parallel reefs.
Located within 20km of
Johannesburg, the established
infrastructure provides another
enormous benefit for the West Wits
Mining projects.
“This is a very exciting proposition
and one that only comes around once
in a lifetime,” Ferguson added.
“It has a lot of information behind
it, outstanding infrastructure and all
it needed was a fresh set of eyes and
energy to unearth the potential.
“We’ve only scratched the surface
on this project.
“We’ve identified unmined
gold-bearing reefs from surface
and approximately 10 kilometres of
uranium-bearing reef that has never
been mined.”
If history is anything to go by,
West Wits Mining is heading towards
a long and highly profitable stay at
Witwatersrand.
As Grant Ferguson said: “It’s just
a matter of starting from the surface
and working our way down in a
systematic approach, targeting
areas where possible resources
delineated have a higher chance
of convertibility to reserves and
spending wisely.”
WEST WITS MINING
AT A GLANCE
HEAD OFFICE
Suite 1, 1233 High Street
Armadale VIC 3143
Australia
Ph: +61 3 9824 8166
Fax: +61 3 9824 8161
Email: info@westwitsmining.com
Web: www.westwitsmining.com
DIRECTORS
Michael Quinert, Grant Ferguson,
Dick van der Walt, Niel Pretorius
MARKET CAPITALISATION
$A6.3 million (at press time)
MAJOR SHAREHOLDERS
DRD Gold Limited 23.9%
Mintails Limited 21.1%
AMN Nominees Pty Ltd 4.9%
Queensland Marketing
Management 4.1%
SEPTEMBER/OCTOBER 2009 RESOURCESTOCKS
A headframe
on one of the
West Wits leases
on Witwatersrand