South Africa is re-entering the underground gold market as soaring bullion prices create new opportunities, Bloomberg reports. Gold has climbed nearly 60 percent this year, hitting repeated record highs and making even high-cost, deep-level mines more commercially attractive.

Against this backdrop, Australia-listed West Wits Mining Ltd. has launched its Qala Shallows project on the outskirts of Johannesburg. Ore has been brought to the surface since October, and a 30,000-ton stockpile is being assembled ahead of full production.

The 90 million US dollars operation is expected to produce around 70,000 ounces annually at first, a modest output compared with South Africa’s historical production. Once the world’s leading gold producer, the country’s output has declined more than 70 percent over the past two decades as aging, high-cost mines struggle to compete globally, Bloomberg notes.

West Wits aims to expand production across its concession to reach 200,000 ounces a year. The company says the project “demonstrates that South Africa can still build safe, modern underground operations that generate long-term value for the economy and local communities.”

Analysts view Qala Shallows as a signal that South Africa’s gold sector could attract new investment and modernise operations, leveraging current market momentum to offset decades of decline.