Gold rush – Westgold races to the top

Westgold is working to be a top-five Australian gold producer as it targets production of more than 400,000ozpa.

Since merging with Karora Resources in August 2024, Westgold is laser-focused on its expanded business and increased gold production.

Westgold is posting a confident start to the New Year, hitting its stride in Q2 FY25 where it produced 80,886oz oz of gold, up from 77,369oz in Q1 FY25. The company looks to continue this momentum, with total production for the first half at 158,255oz oz and production expected to further increase in H2 FY25, consistent with guidance.

With six operating mines and combined processing capacity of about 7mtpa across two of Western Australia’s most prolific gold regions — Westgold says it has a clear vision and strategy to sustainably produce more than 500,000ozpa from FY26/27.

Westgold managing director and chief executive Wayne Bramwell says 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,” he said.

“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.”

Expanded business

Q2 FY25 was the first full quarter of Westgold stewardship of the Southern Goldfields assets. Mr Bramwell says 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.

“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,” he said.

Westgold is developing the Great Fingall and the Fletcher Zone of the Beta Hunt mine, both of which it inherited from the Karora merger.

These operations are proving to be worth their weight, as the Fletcher Zone of the Beta Hunt mine has an interpreted mineralised zone totalling 1.6-2.1moz of gold. Ramp up at both the Bluebird and Beta-Hunt underground mines continues.

At Bluebird-South Junction, efforts were focused on increasing grade and consistency of mine production, while a modified ground support regime was implemented. At Beta Hunt mine infrastructure upgrades critical to increasing mine outputs (including water, power reticulation and ventilation circuits) are being implemented and are due for completion at the end of Q3 FY25.

Development at the Great Fingall mine near Cue remains on track, with first ore anticipated in Q4 FY25.

Mr Bramwell says seventeen drill rigs are operational today.

“At South Junction, intersections such as 68.00m at 5.48g/t of gold and 45.00m at 4.18g/t of gold highlight the quality and thickness of the mineral endowment,” he said.

“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 of gold building our confidence in a third mining front.

Mr Bramwell says the company continues to optimise its expanded, post-merger business.

“Production increased whilst we continued to heavily invest in the long-term capacity of our mines in the Murchison and Southern Goldfields,” he said.

“Investment to support increased and sustainable production from our principal mines was the key focus of our activities over H1, with multiple growth projects advancing in parallel across the expanded group.

“Bluebird-South Junction and Beta Hunt are our key drivers of growth in H2, FY25 with operational changes being implemented to see outputs lift and become more consistent into H2, FY25.

“In addition, the Great Fingall Mine is scheduled to begin production in late Q4, FY25.

“To drive our long-term cost base down, plant expansion studies at Higginsville, Bluebird and Fortnum are advancing with initial capital estimates to be reported shortly.

“To extend mine lives, our underground drilling fleet is fully deployed across the group and surface drill contractors are active at Peak Hill and Higginsville.

“All these elements are beginning to coalesce with the stage now set for Westgold to

demonstrate the enhanced capability of our expanded asset base during H2, FY25.”

Meekatharra

Westgold is leveraging other connections as well, with the December execution of a gold ore purchase agreement between its subsidiary Big Bell Gold Operations and Zeus Mining, owned by New Murchison Gold (ASX: NMG).

Westgold agreed to purchase 30,000-50,000t of gold ore per month from NMG’s planned open pit operation at Crown Prince. NMG is targeting the commencement of open pit mining in mid-2025.

Crown Prince, which is located 33km by road from Westgold’s 1.6-1.8mtpa Bluebird processing plant, has a current JORC indicated and inferred mineral resource of 2.21mt at 3.9g/t gold for 279koz gold.

Westgold managing director and chief executive Wayne Bramwell says the company is delighted to have achieved a mutually beneficial outcome for both the New Murchison Gold and Westgold shareholders.

“This type of commercial arrangement is capital efficient for both companies as it leverages the existing processing infrastructure Westgold has at Meekatharra,” he said.

“The introduction of softer oxide ore from Crown Prince in FY26 effectively increases throughput at the Westgold’s Bluebird plant — growing production and reducing our cost per ounce.

“At the same time, NMG realise value for its shareholders by unlocking a pathway to production for its Crown Prince deposit without the capital impost and execution risk of building a processing plant.

“As such this is a win-win for all shareholders and Westgold looks forward to working with New Murchison Gold in the development of the Crown Prince deposit.”

Westgold expects that most of the Crown Prince ore will be processed in the first two years of the agreement (FY26 and FY27), with potential ongoing terms to be agreed on a rolling, quarter-by-quarter basis following the two-year initial term.

Fortnum

Also in December, Westgold announced the undertaking of an asset review and release of a scoping study for the expansion of the Fortnum gold operation, 120km north of Meekatharra, encompassing the 0.9mtpa Fortnum processing plant and the Fortnum, Horseshoe and Peak Hill mining areas.

The Starlight underground mine is currently the predominant feed source (90% of all processed tonnes with the additional 10% of ore sourced from surface stockpiles) to Westgold’s Fortnum processing hub.

In total, about 525,000oz of gold were produced historically from Starlight at about 3.1g/t to a total depth of 260m by previous open pit and shallow underground operators before mining ceased in 1993.

Westgold has subsequently mined more than 307koz from the Starlight underground.

The scoping study identified a potential 10-year, fully integrated mine plan, including the Starlight, Nathan’s and Yarlarweelor open pits and an expansion of the existing Starlight underground operation.

The study is underpinned by the expanded Starlight mineral resource estimate of 12.9mt at 2.7g/t of gold for 1.13moz, a 91% increase in the previous estimate.

The existing .9mtpa processing plant would be expanded to circa 1.5Mtpa with long-term tailings disposal into the Nathan’s open pit void post mining. Subsequently a newly constructed paddock-style tailings storage facility (TSF) may be required.

Westgold expects average gold production of about 83kozpa. The average gold head grade is expected to be 2.0g/t for total gold production of about 832koz over a 10-year life of mine, according to Westgold.

The first two years of development are underpinned by current Starlight underground mine plan and a significant open pit at Nathan’s. A major Starlight open pit program is slated for year two with development of an expanded underground to occur simultaneously from an adjacent location.
Mr Bramwell says Fortnum is a mature, yet under drilled asset and is one of Westgold’s most profitable and productive operations, with the Starlight mine having produced over 800koz of gold over its life.

“The scoping study contemplates a modest upfront capital investment to deliver a long life, fully integrated open pit and underground project of increased scale, supported by an expansion of our existing processing plant to 1.5mtpa,” he said.

“Given Fortnum is currently operational many of the assumptions utilised in the Scoping Study are considered materially derisked by the Company and having passed this stage gate, our technical team will accelerate open pit drilling across Fortnum and Peak Hill as the next step of project evaluation.”

Bluebird

Westgold has reported a 107% increase in the ore reserve to 7.2mtpa at 2.5g/t for 573koz at its Bluebird – South Junction mine near Meekatharra.

Mr Bramwell says the company has delivered a circa 400% increase in the ore reserve at Bluebird – South Junction over the past year.

“Drilling continues to transform our business and across the Bluebird-South

Junction mining complex we have not yet defined the limits of this ever-expanding system,” he said.

“Project economics and free cash flow is enhanced by a large, productive underground mine feeding a large processing plant. We have all these ingredients at Meekatharra as the Bluebird-South Junction underground mine is the primary ore source feeding the 1.4-1.8mtpa Bluebird processing plant that sits 0.5km from the portal.

“With scale comes the opportunity to reduce costs with mine studies to-date showing that the South Junction deposit lends itself to a lower-cost, bulk extraction mining method that will deliver higher ounces-per-vertical metre — underpinning its potential to be a highly effective mining operation on the doorstep of our Meekatharra process plant.

“Importantly the mineralisation at South Junction remaining open at depth, along strike and down plunge.

“With multiple surface and underground drill rigs operating, Westgold is confident we will continue to extend and infill the Mineral Resource to further increase the life and expand the scale of this key growth driver in the Murchison.

“We look forward to providing updates on this work, as well as the ongoing mining studies at Bluebird – South Junction as we further increase outputs to more than 1.2mtpa during H2 FY25.”