Westgold Resources Limited [ASX: WGX, Westgold or the Company] is one of Australia’s top five gold companies and is ranked in the ASX200. The Company is the dominant explorer, developer, and gold mining operator in the Murchison and Southern Goldfields regions of WA with tenure of more than 3,200 square kilometres. The Company owns and operates its six underground mines and its modern underground mining fleet that provides greater cost control and operating flexibility. The Company’s five processing plants have an installed processing capacity of 7 million tonnes per annum.
65 percent lift in Resource Estimate at Bluebird mine complex
The flagship Bluebird-South Junction underground mining complex within Westgold’s Murchison operations in Western Australia will undergo further extensional exploration and resource definition following continuing outstanding intersections being returned from current drilling activity.
Drilling results in the September quarter have confirmed a 65 percent upgrade in the Measured and Indicated Resource Estimate to 814,000 ounces of gold at this complex as at 30 September 2024. This compares to 493,000 Resource ounces just 3 months earlier at June 2024 and 342,000 Resource ounces a year earlier at June 2023.
Currently, the 814,000 ounces of Measured and Indicated Resource Estimate at the Bluebird-South Junction mine site will undergo detailed evaluation to accurately assess the economic cost of recovery of gold from the Resource Estimate before it can be classified as Ore Reserve.
Ore Reserves are components of the Measured and Indicated Resource Estimate that can be economically extracted as gold to generate positive cash flow. Further mining studies to be carried out at the Bluebird mining complex in the months ahead will determine by how much the currently confirmed Ore Reserve of 277,000 ounces of gold can be increased.
Westgold management are confident that the reported Ore Reserve will be substantially higher than 277,000 ounces as the planned resource development drilling program and associated mining studies are advanced during the second half of the 2025 financial year.
Investors will maintain a detailed focus on Bluebird as it is the key growth driver in Westgold’s Murchison operations. In FY24 the Bluebird-South Junction mine delivered 168,485 ounces of gold. This production volume represented 74 percent of total Group gold production volume of 227, 237 ounces.
What’s next?
The Bluebird-South Junction Ore Reserve update to be released in the months ahead is a key share price catalyst and will be keenly anticipated by Westgold shareholders. This is because advancing projects from Resource Estimate to Ore Reserves is what creates shareholder value.
Ore Reserves are the portion of gold Resource Estimates that can be economically extracted based on ore grade and location. The four drill rigs focusing on infill programs into 2025 at Bluebird-South Junction will support the detailed mining study currently underway. The drill results will provide data to optimise mine infrastructure positioning to lift mine output and productivity.
Ongoing interim updates and the definitive Ore Reserve update for the Bluebird-South Junction operation in the second half of FY25 as well as the gold price will be key share price determinants in the near-term. Westgold has no derivative contracts outstanding and so is a 100 percent unhedged Australian gold producer, fully leveraged to the resurgent gold price.
Westgold is dual listed on the ASX and the Toronto Stock Exchange, making it globally investible. It has a robust balance sheet and a complementary combination of mining and processing assets across two of Australia’s most prolific gold fields, and with a rising production profile, shareholders can expect consistent share price appreciation in the medium-term.
