Initiation of Coverage of West Wits Limited (ASX: WWI)

June 1, 2022

We have initiated coverage of South African gold company, West Wits Limited (ASX: WWI). Since being granted Mining Rights in July 2021, West Wits has commenced operations on the Qala Shallows underground development, which forms part of its overall Witwatersrand Basin Project, located within the highly productive Central Rand of the Witwatersrand Goldfields. The Mining Rights cover parts of the historically mined Rand and Durban Roodeport Deep leases, which between them produced some 41 Moz of gold from the late 1800s until 2001, and for which the company now has a Mineral Resource Estimate (MRE) of 4.28 Moz at 4.58 g/t Au.

The Qala Shallows, with an underground inventory of 722 Koz of gold at 3.06 g/t Au, forms a low peak funding (US$50 million), medium life operation, planned to produce 663 koz over 17 years at a competitive, for underground operations, AISC of US$1,144/oz. This comprises the first stage of the planned four stage broader WBP, with planned production of 1.48 Moz over 27 years (including construction), at an estimated AISC of US$1,198/oz, and for which a positive updated Scoping Study has recently been released, with a pre-tax NPV7.5 of US$227 million and IRR of 33% and an after tax NPV7.5 of US$160 million and IRR of 29%.

As part of development of the Stage 1 Qala Shallows, West Wits has undertaken an “Early
Mining Initiative”, (as well as accelerating the production ramp up) in which easily accessible
remnant mineralisation has been extracted, and stockpiled for future treatment. This was
undertaken as a “proof of concept” initiative to demonstrate the viability of the planned
larger scale operation, and provide some cash flow to put towards development following
rehabilitation of the existing box cut and decline.