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Witwatersrand’s Elephant Lurking in White Rivers

The world’s largest privately-owned gold project is set to be unveiled, with a strong Australia-Africa connection. White Rivers Exploration Pty Ltd, a wholly-owned company of the Creasy Group, is one part of the exploration joint venture (EJV) at the Beisa project; the other is South African gold giant Harmony Gold Mining Co. Ltd. The 65/35 JV in favour of White Rivers was formed in September 2014 over ground adjacent to Harmony’s Target mine in South Africa’s Witwatersrand Basin, Free State province. White Rivers executive chairman Neil Warburton told Paydirt a resource estimate was imminent. “We have spent considerable time and money on the EJV and we have recently completed the first stage of the JORC resource and we are now into the second stage. We’re looking at 8-10 moz @ 7-9 g/t gold, with significant amount of uranium credits, which lies close to Harmony’s Target No.1 and Target No. 2 shafts, Warburton said. “Mark Creasy said we have the largest privately owned gold project in the world and he is probably right.” With some of the world’s deepest underground mines, South Africa is a prolific gold producing jurisdiction and White Rivers is out to capture as many profitable ounces as it can.

So far, the company has spent about half of its initial $5 million obligation under the JV agreement and should have a resource and scoping study in hand by mid-January 2016.
At times it has been hard graft collecting datasets and information from before Harmony’s time on the ground, however, White Rivers has managed to build an initial resource model, signed off by SRK Consulting, based on 25 reefs. For the money spent, Warburton said the discovery cost was about 25c/oz. “There is a large amount of information available we just have to locate it, so we have been getting in contact with previous exploration managers, even before Harmony days. There is about 100km of diamond drilling done underground, all the information was in hard copy, which is about 20-40 years old, which is now modelled,” Warburton said.

Potential investors will get a glimpse of what the Beisa project has to offer in January with the release of the scoping study which could be game-changing for White Rivers. At some stage, the company intends to go public with an IPO and a robust scoping study at Beisa could be the trigger. However, like many gold players, market conditions will be assessed thoroughly before White Rivers is opened up to the investment community. “We are reviewing London, ASX, Hong Kong, subject to market conditions early in 2016, of course,” Warburton said. “The ASX is not first choice, I don’t think South African projects are given true value in Australia, whereas in London and Europe investors understand the risk profile a lot better. In Hong Kong there is the Chinese factor we have to consider. We are very excited about the projects and will look to put some more resources out on other projects in 2016.”

There may be a bearishness on South African projects right now, but not from Warburton. The former Barminco chief executive sees opportunities in the country, while others are looking to flee.
He sees the South African gold sector undergoing a similar sea-change to what has transpired in Australian gold circles upon the departure of international heavyweights from the sector. “South Africa is not a destination of choice for many at this point in time, but we are certainly looking at opportunities there all the time. A lot of people have gone back to Australia where projects have been well priced, if not starting to get a little over priced now, but I believe South African projects are discounted at the moment and for a nimble and qualified board there is opportunity,” Warburton said. “It’s a bit like Australia was with the majors wanting to get out – Barrick [Gold Corp], Newmont [Mining Corp] – and Northern Star [Resources Ltd] and Evolution [Mining Ltd] buying the assets and doing well. It is exactly what is happening here and I hope we can have the same sort of success.”

White Rivers’ board is stacked with underground mining experience, perfectly tailored to operating in South African conditions. While some of South Africa’s gold mines are notoriously deep, Warburton said reinterpretations of parts of the Witwatersrand Basin concerning the EJV were revealing some gold to be uplifted to within 300m of surface. “White Rivers is one of the largest tenement holders in the Basin and a lot of our tenements are near or adjacent to infrastructure, so we don’t have to sink any new shafts or anything. And, if orebodies are uplifted, we can use declines,” Warburton said.

Therefore a path to production within 18 months is envisioned and cash flow following soon after. Getting to production is the focus, while other assets in its portfolio are also attracting some attention to White Rivers. In mid-2015, the company welcomed South Africa’s Windfall Energy – a major player in the country’s only current onshore production of petroleum – into its Helibron and Kroonstad gas assets in the Witwatersrand Basin. Windfall’s participation affords the gas assets a fast-tracked path to development, in which it can earn a 51% interest in the production right and first right of refusal to procure any gas produced on normal commercial terms.
– Mark Andrews, Paydirt, December 15 – January 16