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.
Record quarterly production follows Karora Resources merger
Westgold achieved record quarterly gold production in the September quarter of 77,269 ounces. The production results reflect only two months’ production from the newly acquired Southern Goldfields operations (24,480 ounces). These operations were acquired as part the merger with Karora Resources which was completed on 1 August 2024.
Including the pre-merger, July output of 13,988 ounces from the Southern Goldfields mine, the September quarter production result would have been 91,357 ounces. The reported September quarter production volume is made up of 52,889 ounces of 3 months’ production from the Murchison mine but only two months of production from the Southern Goldfields operations (24,480 ounces).
Integration of the Southern Goldfields’ production numbers will see the All-in Sustaining Cost (AISC) improve quarter on quarter throughout FY25. AISC guidance for FY25 is A$2000 – $2,300 per ounce, compared to the September quarter AISC of $2,422 per ounce.
New $200M Facility Agreement
In a sign of confidence in Westgold’s ability to create economic value from its portfolio of gold assets, ING Bank and Societe Generale have increased the existing $100M Facility by $200M to $300M. The increased Facility ensures that the Company’s growth momentum will endure beyond FY25.
Significantly, the terms of the increased Facility do not require Westgold to enter mandatory gold hedging. Being unhedged throughout the period of sustained higher gold prices in recent times has been a key profit driver for the business and a sound strategic decision by the Board.
What’s ahead?
Westgold will continue to develop its enviable pipeline of growth opportunities and expand the Group’s production materially beyond the existing capacity of 400,000 ounces per annum. Shareholders can expect more quarterly production records and cash-build as Westgold expands its portfolio of assets in two of Australia’s most prolific gold-producing regions. The production records come at a time when Westgold’s production is unhedged, and the gold price is at a record high.
The current political uncertainty in the US, the war in the Middle East and interest rate cuts across major economies have lifted the Australian dollar gold price to A$4,250. The record gold price combined with the FY25 AISC guidance estimate of A$2,000 – $3,000 per ounce has set a platform for enhanced Free Cash Flow generation in the years ahead.
