Westgold Resources is confident its production output will increase in the second half of the financial year, following a strong market reaction to its first half production figures.
Westgold Resources is confident its production output will increase in the second half of the financial year, following a strong market reaction to its first half production figures.
Westgold shares were sold down 14 per cent on January 9, when the post-merger goldminer told the market it had produced 158,255 ounces of gold in the half year to December 31.
The results came off a period of consolidation as the company took stock its enlarged portfolio following its deal for Karora Resources in August.
But they were shy of the run rate required for company’s production guidance of between 400,000 and 420,000 ounces, set in the lead-up to the merger.
In its quarterly report today, Westgold revealed its cash costs in the second quarter had come in at $2,703 per ounce against a target of between $2,000/oz and $2,300/oz.
But Westgold, which is fully leveraged to record Australian dollar gold prices, is confident its outputs will increase in the second half of the year.
It did not revise its full-year guidance.
“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,” managing director Wayne Bramwell said.
Westgold is investing significantly at Beta Hunt – acquired in its move for Karora – with a view to ramping it up to deliver a throughput rate of more than two million tonnes per annum this year.
At Bluebird-South Junction in the Murchison, the target rate is between 1 million and 1.5 million tonnes per annum, with the Great Fingall mine expected to contribute before the end of the financial year.
“Building a simpler, yet larger scale and more profitable business requires investment and time,” Mr Bramwell said.
“Six months on post-merger, Westgold now has the portfolio that can deliver increased levels of free cashflow.
“Our capital investments are focused on higher mine productivity and lowering our all-in sustaining costs with group’s Q4, 2025 exit run rate the measure of our success.”
Growth was funded from cashflow of $45 million, with $50 million drawn down from a corporate facility to balance working capital requirements.
Westgold is also active on the exploration front, with 17 rigs operational as it looks to expand its resource footprint.
The company has set an aspirational production target above 500,000oz from the 2027 financial year.
Westgold shares were up 0.9 per cent to $2.75 at 1pm.
