December 2024 Quarterly Report
23 January 2025
ASX Release Production lifts again in Q2, FY25
Perth, Western Australia, 23 January 2025 Westgold Westgold is an agile ASX200 Resources Limited (ASX | TSX: WGX - Westgold or the Australian gold company.
Company) is pleased to report results for the period ending With six operating mines and 31 December 2024 (Q2 FY25).
combined processing capacity of ~7Mtpa across two of Western
HIGHLIGHTS
Australia’s most prolific gold regions – we have a clear vision and strategy to OPERATIONS sustainably produce +500,000ozpa
Safety Performance Total Recordable Injury Frequency Rate from FY26/27. (TRIFR) of 6.85 / million hours – an improvement of ~7%
Record gold production in Q2 FY25 of 80,886oz Au @ AISC of A$2,703/oz with increased net mine cashflow of $45M funding the Company’s operational and growth capital requirements
EXPLORATION & RESOURCE DEVELOPMENT Seventeen drill rigs operating across portfolio
Bluebird-South Junction Resource and Reserve grown to 1.4Moz and 573Koz respectively
Starlight Mineral Resource grown by 91%, underpinning expansion plan for Fortnum
Impressive drill results from both the Murchison and Southern Goldfields:
■ 68.00m at 5.48g/t Au in hole 24BLDD171 at South Junction
- 6.60m @ 41.84g/t Au in hole WF440N1-05AE at Beta Hunt Fletcher Zone
■ 5.65m at 360.84 g/t Au in hole NF1120RD28 at Starlight
CORPORATE
Ore purchase agreement signed with New Murchison Gold - set to increase Murchison production in FY26 Financial values are reported in A$ unless otherwise specified
Balance sheet bolstered with additional A$200M corporate facility - providing Westgold access to a total of A$300M in
This announcement is authorised for
corporate facilities without mandatory hedging.
release to the ASX by the Board.
Closing cash, bullion, and liquid investments at 31 December 2024 Investor Relations & Media of $152M Kasun Liyanaarachchi | IR Manager [email protected] Westgold remains 100% unhedged – offering full exposure to +61 458 564 483 escalating gold price
Westgold Resources Limited westgold.com.au Level 6, 200 St Georges Terrace ASX: WGX | TSX: WGX T: +61 8 9462 3400 Perth WA 6000 / PO Box 7068 ABN 60 009 260 306 E: [email protected] Cloisters Square WA 6850
Westgold Managing Director and CEO Wayne Bramwell commented:
“Q2, FY25 was the first full quarter of Westgold stewardship of the Southern Goldfields assets. Outputs continue to lift with a record group gold production of 80,886oz - increasing net mine cash flows to $45M and funding the Company’s operational and growth capital requirements. Westgold also drew down $50M from the corporate facility during the period to balance the working capital requirements of our much larger business.
The FY25 strategy is to systematically reconfigure the larger portfolio to generate higher levels of free cashflow with capital investment in critical mine infrastructure at Beta Hunt and Bluebird-South Junction, and resource development drilling key to achieving this.
In the Southern Goldfields we have rapidly demonstrated the ability to lift mine outputs. We are investing for the next decade of operations at Beta Hunt with the key enablers to higher mine productivity including a clean mine water supply, upgrades to underground pumping, power, ventilation and facilities for our workforce. All of these projects are underway and on completion will set this mine up to consistently deliver >2Mtpa run rates during 2025.
In the Murchison, we are steadily expanding the Bluebird-South Junction mine to lift outputs to 1-1.5Mtpa run rates in 2025, ultimately sustaining the Bluebird mill from a single source. A change in ground support methodology to support the expansion and transition to a larger transverse open stoping mining method slowed the progress of this ramp up in Q2, and with those changes now implemented, Bluebird-South Junction mine output is increasing again.
Seventeen drill rigs are operational today. At South Junction, intersections such as 68.00m at 5.48g/t Au and 45.00m at 4.18g/t Au highlight the quality and thickness of the mineral endowment. At the Fletcher Zone, five rigs are operational, with highly encouraging results including 6.6m at 41.84g/t and 24.6m at 6.9g/t Au building our confidence in a third mining front.
Our strategic asset review commenced with the Fortnum scoping study defining a pathway to a higher margin, expanded 1.5Mtpa facility with a 10-year integrated mine plan. At Meekatharra we finalised an ore purchase agreement with a Murchison explorer that unlocks value for all shareholders and will provide a new softer feed source to our Bluebird mill in FY26.
Strong treasury management is key to delivering our strategy and providing returns to our shareholders. During the quarter Westgold expanded our corporate facility to $300M without mandatory hedging to support mine and process plant expansion plans as this investment will reduce operating cost and enhance future cashflows.
Building a simpler, yet larger scale and more profitable business requires investment and time.
Six months on post-merger, Westgold now has the portfolio that can deliver increased levels of free cash flow. Our capital investments are focussed on higher mine productivity and lowering our all in sustaining costs with the Group’s Q4, FY25 exit run rate the measure of our success.”
Executive Summary
Cash Position at 31 December 2024
Q2, FY25 was the first full quarter of Westgold stewardship of the Southern Goldfield assets.
Westgold closed the quarter with cash, bullion and liquid investments of $152M (see Figure 1). This result was driven by record group gold production of 80,886oz, increasing net mine cash flows of $45M and funding the Company’s operational and growth capital requirements.
Westgold also draw down $50M from the corporate facility during the period to balance the working capital requirements of now, a much larger business.
(10)
(3)
(10)
(29)
50 12 (13) 152 (29)
(16)
136 17
(9) (6)
11 55
Operating Capital Expenditure Working Capital
Figure 1: Cash, Bullion, and Liquid Investments Movement (A$M) – Q2 FY25
Notes
- Merger costs of $13M relating to Karora Resources Inc’s North American advisor costs finalised in Q2.
- Dividend payment relates to payment of FY24 Final Dividend (declared 1.25 cent per share fully franked).
- Working capital movement of $29M reflects the timing of creditor payments.
- The draw down of $50M from the corporate facility provides prudent overall treasury management of a larger business.
Group Production Highlights – Q2 FY25
Westgold achieved its highest quarterly gold production in Q2 FY25, producing 80,886 ounces and generating
$45M in net mine cashflow.
This included 46,461 ounces from the Murchison and 34,425 ounces from the Southern Goldfields. Notwithstanding the quarter-on-quarter improvement in ounces produced, the ramp up at the Bluebird-South Junction and Beta Hunt underground mines was slower than planned.
All-In Sustaining Cost (AISC) for the quarter was $2,703/oz (Q1 FY25 $2,422/oz). The elevated AISC $/oz in Q2 FY25 was due to lower than anticipated production from Bluebird-South Junction and Beta Hunt combined with the impact of absorbing a full quarter of Southern Goldfields operating costs.
Capital growth projects continued to advance across the Group in line with the current strategy to ramp up production in H2 FY25.
80,886
77,369
59,238 52,795 Gold production (oz) 52,100
Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25
4,066
3,723 Achieved gold price ($/oz) 3,493 3,137 3,041
2,703
2,422 AISC ($/oz)
2,041 2,492 219 2,245
133 130 AISC ($M)
Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25
Figure 2: Westgold Quarterly Production (oz), Achieved Gold Price and AISC ($/oz)
120 3,000
2,796 2,791
2,643 2,800 2,619 110 2,561 2,542 2,490 2,600 2,370 2,342 100 2,309 2,400 2,209 2,198 90 2,200 1,983 2,230 2,000
75 75
1,800 70 69 1,842
-200 50 -400 40 -600 38 38 35 35 -800 -1,000 0 -1,200 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 23 23 23 24 24 24 24 24 24 24 24 24 24 24 24
AISC (A$M) AISC/oz(A$/oz)
Figure 3: Westgold Monthly AISC
The Company sold 86,879oz of gold for the quarter achieving a record price of $4,066/oz, generating $353M in revenue. With Westgold free of any fixed forward sales contracts, the Company continues to offer shareholders full exposure to record spot gold prices.
Westgold’s operations generated $110M of mine operating cashflows with the achieved gold price $1,363/oz over AISC. AISC for Q2 FY25 of $219M (Q1 FY25 of $187M) including $32M in additional costs from the Southern Goldfields being under Westgold’s control for the first full quarter.
As illustrated in Figure 3 the monthly AISC since post-merger (August 2024) has been relatively consistent.
Capital expenditure during Q2 FY25 of $56M (Q1 FY25 $58M) includes $29M investment in growth projects (Bluebird-South Junction and the Great Fingall development), $27M upgrading processing facilities, infrastructure and equipment across the sites.
Investment in exploration and resource development of $9M (Q1 FY25 $14M) for the quarter was focussed on Bluebird-South Junction and Starlight in the Murchison, and the Fletcher Zone, Larkin Zone and Two Boys underground in the Southern Goldfields.
The net mine cash inflow for Q2 FY25 was $45M (refer Table 1 under Group Performance Metrics).
Environmental, Social and Governance (ESG)
People
People are a key enabler of operational productivity. Westgold is committed to investing in building organisation capability and lowering workforce turnover. Westgold’s continued focus on diversity and inclusion has been recognised at the AMEC Awards 2024, with Westgold celebrated as finalists for the Diversity and Inclusion Award. Respect in the Workplace training was rolled out to the business and a Respect Hotline was established as another avenue for the workforce to raise workplace concerns.
At the end of the quarter, Westgold employed 2,100 employees and contractors.
Safety and Sustainability
Westgold has maintained a strong focus on safety, resulting in continued positive trends across key performance indicators this quarter. The Total Recordable Injury Frequency Rate (TRIFR) decreased to 6.85 injuries per million hours worked, representing a 7.09% improvement quarter-on-quarter. The business recorded zero (0) Lost Time Injuries, resulting in a 3.52% decrease in the Lost Time Injury Frequency Rate (LTIFR) to 0.98. The High Potential Incident Rate (HiPR) increased from 5.18 to 6.09.
During this quarter, zero (0) Significant Environmental Incidents were recorded.
Figure 4: The TRIFR Decreased in Q2 FY25
Group Performance Metrics
Westgold’s quarterly physical and financial outputs for Q2 FY25 are summarised below.
The Group operates across the Murchison and Southern Goldfields regions of Western Australia with the Murchison Operations incorporating four underground mines (Bluebird-South Junction, Starlight, Big Bell, and Fender) and three processing hubs (Fortnum, Tuckabianna and Bluebird).
Westgold’s merger with Karora Resources Inc completed on 1 August 2024. These assets are grouped and reported as Westgold’s Southern Goldfields operations – incorporating the Beta Hunt and Two Boys underground mines and two processing hubs (Higginsville and Lakewood).
Table 1: Westgold Q2 FY25 Performance
| Southern | ||||
|---|---|---|---|---|
| Physical Summary | Units | Murchison | Group | |
| Goldfields | ||||
| ROM - UG Ore Mined | t | 664,568 | 450,555 | 1,115,123 |
| UG Grade Mined | g/t | 2.3 | 2.3 | 2.3 |
| ROM - OP Ore Mined | t | - | - | - |
| OP Grade Mined | g/t | - | - | - |
| Ore Processed | t | 749,182 | 592,823 | 1,342,005 |
| Head Grade | g/t | 2.1 | 2.0 | 2.1 |
| Recovery | % | 90 | 92 | 91 |
| Gold Produced | oz | 46,461 | 34,425 | 80,886 |
| Gold Sold | oz | 50,263 | 36,616 | 86,879 |
| Achieved Gold Price | A$/oz | 4,066 | 4,066 | 4,066 |
| Cost Summary | ||||
| Mining | A$’M | 72 | 52 | 124 |
| Processing | A$’M | 32 | 24 | 56 |
| Admin | A$’M | 6 | 5 | 11 |
| Stockpile Movements | A$’M | (6) | 3 | (3) |
| Royalties | A$’M | 5 | 12 | 17 |
| Cash Cost (produced oz) | A$’M | 109 | 96 | 205 |
| Corporate Costs | A$’M | 3 | 1 | 4 |
| Sustaining Capital | A$’M | 7 | 3 | 10 |
| All-in Sustaining Costs | A$’M | 119 | 100 | 219 |
| All-in Sustaining Costs | A$/oz | 2,556 | 2,903 | 2,703 |
| Southern | ||||
|---|---|---|---|---|
| Physical Summary | Units | Murchison | Group | |
| Goldfields | ||||
| Notional Cashflow Summary | ||||
| Notional Revenue (produced oz) | A$’M | 189 | 140 | 329 |
| All-in Sustaining Costs | A$’M | (119) | (100) | (219) |
| Mine Operating Cashflow | A$’M | 70 | 40 | 110 |
| Growth Capital | A$’M | (26) | (3) | (29) |
| Plant and Equipment | A$’M | (15) | (12) | (27) |
| Exploration Spend | A$’M | (5) | (4) | (9) |
| Net Mine Cashflow | A$’M | 24 | 21 | 45 |
| Net Mine Cashflow | A$/oz | 509 | 605 | 554 |
Q2 FY25 Group Performance Overview
Westgold processed 1,342,005t (Q1 FY25 – 1,289,561t) of ore in total at an average grade of 2.1g/t Au (Q1 FY25
- 2.1g/t Au), producing 80,886oz of gold (Q1 FY25 – 77,369oz). Group AISC in Q2 FY25 was $219M (Q1 FY25 -
$187M).
The $32M increase reflects the enlarged Westgold post-merger accounting for three months’ worth of production at the Southern Goldfields in comparison to two months in Q1 FY25.
MURCHISON
The Murchison operations produced 46,461oz of gold (Q1 FY25 – 52,889oz), largely as a result of lower production from the Bluebird-South Junction mine and reduced access to low grade stockpiles.
Total AISC of $119M was in line with the prior quarter (Q1 AISC - $121M). Total AISC continues to trend down against historical average quarterly AISC, demonstrating the effectiveness of Westgold’s cost optimisation and focus on profitability. Mining costs in the Murchison operations were $1,549/oz (Q1 FY25 $1,074/oz) coinciding with additional costs to re-establish access to remnant mining areas at Big Bell being offset by lower sustaining capital requirements. In addition, a revision to ground support requirements in the South Junction area of the Bluebird-South Junction mine, slowed production from South Junction and resulted in increased ground support costs for this quarter.
Total Capital expenditure of $41M, included Growth Capital ($26M) and Plant and Equipment ($15M) across the Murchison operations. Growth Capital related to the Great Fingall development and expansions to the Bluebird-South Junction and Starlight mines.
Plant and Equipment capital includes investment related to processing facilities ($6M), Bluebird-South Junction primary ventilation fans ($3M) and Bluebird paste plant ($2M) during the quarter.
SOUTHERN GOLDFIELDS
Q2 represents the first full quarter of operation under Westgold’s ownership. The Southern Goldfields production continued to increase, delivering 34,425oz of gold (Q1 FY25 – 24,480oz).
The additional month’s operation resulted in increased total AISC in the Southern Operations quarter on quarter (Q2 AISC - $100M vs Q1 ASIC - $65M). On a per ounce basis, AISC was higher at $2,903/oz (Q1 AISC – $2,696/oz) as a result of production being impacted due to a bearing failure on a primary ventilation fan and a burst rising main (impacting pumping) at Beta Hunt.
Produced ounces were under budget due to lower grades seen in development tonnage and smaller content of coarse gold from the A Zone lode at Beta Hunt. Grade reconciliation was an issue with the inherited resource model now being populated with a backlog of drill data left from the previous operators and new drill data from the latest Westgold drilling.
Total Capital Expenditure of $15M, included Growth Capital ($3M) and Plant and Equipment ($12M) across the Southern Goldfields operations relating to Beta Hunt mine, processing facilities and underground equipment.
Table 2: Q2 FY25 Group Mining Physicals
| Ore Mined | Mined Grade | Contained ounces | |
|---|---|---|---|
| (‘000 t) | (g/t) | (Oz) | |
| Murchison | |||
| Bluebird | 88 | 3.42 | 9,649 |
| Fender | 76 | 2.26 | 5,531 |
| Big Bell | 333 | 1.81 | 19,338 |
| Starlight | 168 | 2.67 | 14,374 |
| Southern Goldfields | |||
| Beta Hunt | 407 | 2.26 | 29,555 |
| Two Boys | 44 | 2.22 | 3,125 |
| GROUP | 1,115 | 2.28 | 81,571 |
Table 3: Q2 FY25 Group Processing Physicals
| Ore Milled | Head Grade | Recovery | Gold Production | |
|---|---|---|---|---|
| (‘000 t) | (g/t) | (%) | (Oz) | |
| Murchison | ||||
| Bluebird | 89 | 3.38 | 93 | 8,982 |
| Fender | 64 | 2.13 | 85 | 3,757 |
| Open Pit & Low Grade1 | 66 | 1.22 | 85 | 2,194 |
| Bluebird Hub | 219 | 2.36 | 89 | 14,933 |
| Big Bell | 301 | 1.86 | 87 | 15,609 |
| Open Pit & Low Grade | 21 | 0.69 | 86 | 402 |
| Tuckabianna Hub | 322 | 1.78 | 87 | 16,011 |
| Starlight | 167 | 2.82 | 95 | 14,364 |
| Open Pit & Low Grade | 41 | 0.94 | 95 | 1,153 |
| Fortnum Hub | 208 | 2.46 | 95 | 15,517 |
| Southern Goldfields | ||||
| Beta Hunt | 247 | 2.31 | 92 | 16,896 |
| Lakewood Hub | 247 | 2.31 | 92 | 16,896 |
| Beta Hunt | 167 | 2.26 | 92 | 11,107 |
| Two Boys | 52 | 2.28 | 92 | 3,470 |
| Pioneer OP | 2 | 2.21 | 92 | 155 |
| Open Pit & Low Grade | 125 | 0.78 | 92 | 2,797 |
| Higginsville Hub | 346 | 1.72 | 92 | 17,529 |
| GROUP TOTAL | 1,342 | 2.06 | 91 | 80,886 |
1 Includes low grade ore mined at Big Bell and trucked to Bluebird
Operations Summary
Murchison
Figure 5: Murchison Location Map
- Bluebird-South Junction Underground Mine (Meekatharra)
The production ramp-up at Bluebird-South Junction ended Q1 in line with planned throughput rates and poised to commence substantial stoping operations at South Junction. In October updated geotechnical modelling highlighted the need to enhance ground support for both existing and new development drives in South Junction to support the expansion and transition to a larger transverse open stoping mining method.
While this required additional resources and temporarily slowed production ramp-up during Q2 FY25, the enhanced ground support management plan – which is not dissimilar to ground support used in other Westgold mines – is not expected to materially impact steady state mining rates or anticipated mining costs going forward.
By December, full access was restored to the South Junction mining fronts and production momentum regained. The planned 1.2Mtpa run rate is now expected to be achieved in late Q4.
In conjunction with the expansion in mining rates, project works remain on track for underground HV electrical upgrades, primary ventilation upgrades and paste fill infrastructure. The completion of these projects will ensure sustained production growth from South Junction.
- Bluebird Mill (Meekatharra)
Lower than anticipated production at Bluebird-South Junction and lower production at Fender in November (see section below for details) constrained ore supply to the Bluebird mill. As a result, the Bluebird mill operated at reduced capacity during Q2.
However, this situation created a valuable opportunity to address legacy maintenance issues. These items including screening upgrade, tankage repairs and reline, elution circuit upgrade and structural repairs where completed, ensuring enhanced availability and reliability as Bluebird-South Junction progresses toward its ramp-up to 1.2Mtpa.
- Fender Underground Mine (Cue)
Production at Fender had a strong start to the quarter, achieving record production in October. A severe, yet localised rainfall event in November temporarily impacted critical underground dewatering infrastructure. Production returned to steady levels in December, with substantial works completed to enhance surface flood protection.
Looking ahead to Q3, the focus will be advancing the Fender decline to access the next level in the sequence, positioning the mine for sustained steady state production.
- Big Bell Underground Mine (Cue)
Production from the cave increased compared to the previous quarter due to commencement of remnant cave mining, averaging 110kt per month, with a record production month achieved in December. A scoping study was completed early in Q2 on mining remnant areas of the cave, with the study identifying low-cost production that could be mined from remnant drawpoints between the 320 and 585 levels.
Efforts to re-establish access to the remnant drawpoints commenced in the upper levels of the cave with some remnants being mined during the quarter and setting the stage to commence increased levels of bogging activity in Q3.