What does it take to reignite confidence and secure investment in South Africa’s historic Witwatersrand gold-bearing reef? For West Wits Mining, the journey of mobilising the Qala Shallows project reveals a compelling story marked by vision, innovative financing, dedicated collaboration and strategic execution behind the scenes. Alchemy Law was privileged to act as legal advisors on this undertaking.
A beacon for South African gold mining
Nestled in the iconic Witwatersrand Basin, Qala Shallows is set to be South Africa’s first new underground gold mine in nearly 15 years, with a planned production of approximately 944,000 ounces of gold over a life-of-mine spanning almost 17 years. Producing about 70,000 ounces annually at steady state, the mine leverages its urban-fringe location to use existing infrastructure and a nearby processing plant, significantly lowering capital costs and operational risks.
Scheduled for its first gold pour in early 2026, Qala Shallows symbolises more than just output — it signals a purposeful revival of South Africa’s gold mining sector, a cornerstone of the national economy that has weathered many challenges in recent decades. And, almost more importantly, the project is on track to deliver what it promised, with its most recent announcement confirming the first underground ore production successfully delivered to stockpile on 15 October 2025.
A complex path to funding
In the current economic and regulatory climate, investing in mining projects demands more than resources — it requires creativity, rigour, and conviction. Securing finance for a project of this nature is notoriously complex, with a critical need to balance risk and opportunity in uncertain and volatile markets.
For West Wits, a game-changing moment came with the successful securing of a senior syndicated debt facility of R875 million (around US$50 million at the time) from South Africa’s Industrial Development Corporation (IDC) and Absa Bank. This financial milestone was achieved through a blend of strategic diligence, bespoke legal advice, and extensive stakeholder engagement.
“Securing this senior funding in partnership with IDC and Absa marked a pivotal moment for us,” reflects Rudi Deysel, West Wits CEO. “It underlines confidence in the sustainable economic potential of Qala Shallows and the revival of South Africa’s gold mining sector.”
The loan is a product of painstaking scrutiny across technical, legal, geological, and commercial domains, structured uniquely on ore reserves with higher contingency allowances. Covering about 55% of the total project cost, the facility finances the development, infrastructure rollout, construction, commissioning, and early operations.
Repayment terms were carefully negotiated to begin 24 months after the first drawdown, extending over 36 months, with interest pegged to the Johannesburg Interbank Average Rate (JIBAR). A particularly innovative feature includes mandatory put options covering 100% of the facility, shielding the project against gold price downturns while retaining full exposure to upward price movements.
Wildu du Plessis, senior partner at Alchemy Law, who advised on the legal structuring, emphasises, “The bespoke legal framework we crafted was crucial to structuring a funding model based on ore reserves with contingency, balancing risk mitigation and upside potential. This was essential in reassuring lenders and investors in what is a traditionally high-risk sector.”
Blending debt with equity to build confidence
Crucially, the remaining 45% of project financing, approximately US$23 million, was secured through top-up equity contributions and early operational revenues, thus broadening the share register with resource-focused institutions. This judicious debt-equity mix signals strong institutional belief not only in the project’s viability but also its capacity to generate socio-economic growth in the Witwatersrand economic hub.
Further reinforcing strategic control, West Wits increased its ownership stake to 74% through a share buyback, solidifying its grip over a substantial five-million-ounce gold resource and enhancing its ability to steer the project forward. This was followed by a successful oversubscribed equity raise of A$17.5 million (around US$11 million).
Moreover, a recent approval for a US$12.5 million additional loan facility from Nebari Natural Resources Credit Fund II offers further support for advancing development in stage one and ensuring delivery of production goals, with prospects for scaling up to US$22.5 million. This boosted financial agility promises to firmly establish West Wits as a significant regional gold producer.
Strategic partnerships and operational readiness
The project team wisely sought operational efficiencies by leveraging existing processing infrastructure, securing a toll-treatment agreement with Sibanye-Stillwater’s Ezulwini plant. This reduces capital expenditures and compresses the timeline to first gold pour.
In parallel, West Wits locked in key supplier contracts: project management services from Bara Consulting and Solrock Mining, equipment supply from RHAM and HPE Hydropower, and explosives from AECI. Early civil works, including decline refurbishment, electrical system design, and underground surveys, were completed, letting technical and operational momentum build behind the scenes.
Also in the background, all operational permits were attained, ensuring the project met legal and environmental compliance standards for breaking ground. This included mining rights, water licences, power and environmental approvals, and the use of explosives. The approval of these permits was foundational to moving forward with construction and mining activities in the highly regulated South African mining sector. It also ensured rapid ramp-up once funding landed.
Innovating for sustainability and efficiency
Operationally, Qala Shallows employs conventional narrow-reef stoping, familiar and proven in the Witwatersrand basin, mitigating novelty risk. However, innovation is baked into the project’s core: underground equipment will harness hydropower instead of traditional compressed-air systems, significantly reducing energy consumption, heat generation, and dust emissions. Future phases aim to adopt battery-powered vehicles and make more use of solar power, thereby supporting a lower carbon emissions footprint.
Water usage is minimised with zero effluent discharge into local tributaries, recognising the importance of this critical resource in water-scarce regions. These innovations, among others, position Qala Shallows as a model for “green” gold mining by balancing economic outputs with environmental stewardship.
To boot, the incorporation of lender-mandated put options as financial safeguards demonstrates how sophisticated financial “technologies” complement physical technologies underground.
Socio-economic impact and future vision
Beyond mineral ounces, Qala Shallows is positioned to catalyse substantial socio-economic benefits. At peak development, the mine is expected to create 1,000 direct jobs and stimulating thousands more indirectly through local business and supplier engagement.
Local procurement strategies prioritise businesses in Soweto and surrounding wards, fostering inclusive growth in historically disadvantaged communities. Social Labour Plan initiatives focus on skills development, enterprise growth, and municipal-aligned projects, including transforming former mining lands, and particularly mine dumps, into safer, productive zones.
Looking forward, the project is a blueprint for modern South African mining: capital-efficient, modular, community-integrated, and environmentally conscious.
“If all goes to plan, Qala Shallows will demonstrate a new model for gold mining in South Africa: smaller, shallower footprints, quicker returns, and stronger community links. It’s a catalyst for renewed confidence in the sector’s ability to deliver more ounces, more jobs, and attract new investment,” concludes Rudi.
From heritage to future
Behind the scenes, the mobilisation of West Wits Mining’s Qala Shallows project stands as a testament to visionary leadership, innovative financing, and operational excellence. Through customised legal frameworks, robust institutional partnerships, and sustainability commitments, this endeavour charts a new course for South Africa’s gold mining future, honouring its heritage while pioneering a responsible, prosperous path ahead.
From a legal advisory perspective, Wildu comments: “West Wits’ strategy and the complexity of the funding model and legal ramifications were challenging and interesting, and we were honoured to be involved and advise West Wits on what we are sure will ultimately be economically beneficial outcomes for a wide range of stakeholders. And, I guess it’s fair to add right now that with the dollar in turmoil, gold demand is surging as a ‘safe-haven’ asset, further enhancing confidence in this new project.”
“Alchemy Law was a real strategic partner for us,” says Rudi, “from quick sanity check calls at various times to giving key legal guidance, the Alchemy team was always available and pivotal in our journey with our new gold mining venture. Their holistic and proactive approach to project strategy, coupled with practical solutions, has positioned the Qala Shallows project to deliver new ounces and strong economic returns — making a meaningful contribution to South Africa’s economy and revitalising its gold mining sector.”