PERTH (miningweekly.com) – Junior West Wits Mining has flagged cost savings at its Qala Shallows gold project, which forms part of the larger Witwatersrand Basin gold project, in South Africa, after gaining approval for 7.5 MVA of grid power for the project.

The ASX-listed company on Friday reported that the use of power from South Africa’s Joburg City Power would lead to significant cost savings, with power expected to be around 75% less expensive compared to using diesel power generators.

“The 7.5 MVA bulk power supply approval for the Qala Shallows project is a significant milestone. Joburg City Power’s supply is estimated to be approximately 75% cheaper than using diesel power generators. Diesel power generators will remain an integral part of Qala Shallows’ power supply system, ensuring uninterrupted production during loadshedding periods and other outages,” said West Wits CEO and MD Jac van Heerden.

“However, access to grid power for the majority of operations will significantly reduce the projected electricity costs during the build-up phase and thereby further de-risk the project at a critical phase. In addition, West Wits has engaged with renewable energy suppliers to further reduce the reliance on diesel and mitigate the impact of higher electricity costs; this will ultimately enable the operation to achieve power security at the lowest power cost possible.”

A previously revised definitive feasibility study (DFS) for Qala Shallows estimated that at peak, the project would have a steady-state production of 55 000 oz/y over a ten-year period, with the mine to average 43 000 oz/y over its 15.7-year mine life.

The revised DFS estimates peak funding of $63-million over a three-year period, and estimates an all-in sustaining cost (AISC) of $1 093/oz, with a steady-state AISC of $962/oz. However, West Wits on Friday said that the revised DFS assumed total reliance on diesel power generation during the initial 15-month build-up period, pending approval and connection to the grid. With the approval of a 7.5 MVA power supply this timeline will now be reduced by six months or more.