Black Cat acquires Lakewood mill for $85m

Westgold Resources (ASX: WGX) is divesting its non-core 1.2mtpa Lakewood processing facility to Black Cat Syndicate (ASX: BC8) in Kalgoorlie, WA.

The transaction is expected to complete on or before March 31, 2025.

As part of the transaction, Westgold will also retain optionality and priority access of up to 200ktpa of processing capacity at Lakewood via a toll-treating agreement (for a period of two years).

Acquisition of the fully permitted and operating Lakewood processing facility allows Black Cat to produce more gold sooner, with expanded throughput capacity of more than 50% (from 0.8mtpa to 1.2mtpa) and brings forward production plans by about 15-months to take advantage of the high gold price environment.

Black Cat managing director Gareth Solly says this is another transformational step in the company’s plan to produce more gold sooner.

“The acquisition of the 1.2mtpa Lakewood processing facility accelerates Kal East by 15 months, eliminating the risks associated with construction,” he said.

“We have a 1.3moz resource base near Lakewood with deposits open along strike and at depth.

This acquisition provides a pathway to harvest the cash from Kal East, complemented by ongoing drilling and growth.

We look forward to running Lakewood which is on the doorstep of Kalgoorlie and has previously been pivotal in the growth of Silver Lake Resources (now Vault Minerals) and Karora Resources.”

Westgold managing director and chief executive Wayne Bramwell says larger mines feeding larger processing plants is the company’s strategy to deliver higher operational outputs and operating margins at lower cost.

“In the Southern Goldfields, the equation that delivers these metrics is an expanded Beta Hunt mine feeding an expanded Higginsville mill,” he said.

“Westgold’s expansion of Beta Hunt is underway with our investment in upgrading critical mine infrastructure to deliver consistent outputs above 2mtpa run rates this calendar year.

“At Higginsville, an expansion study that evaluates a range of milling options from 2.6mtpa to 4mtpa is nearing completion.

“A larger and materially lower operating cost platform, underpinned by expanded Beta Hunt mine production also brings other regional underground and open pit targets into focus.

“The divestment of non-core assets such as Lakewood, realises some of the inherent value from second tier assets in our portfolio. It consolidates our processing capacity in a single location and provides expansion capital for a much larger processing hub at Higginsville.”

Westgold will report the results from the Higginsville expansion study during March 2025.