Westgold boosts cash and liquid assets by $21M in 2nd quarter to $238M at 31 Dec 2023

About Westgold Resources

Westgold Resources Limited [ASX: WGX, Westgold or the Company] is the dominant explorer, developer, and gold mining operator in the Murchison region with over 1,300 km2 of tenure across the Murchison and Bryah Basin. Westgold operates four underground mines, several open pits and three processing plants with an installed processing capacity of ≈4 Mtpa. The Western Australian gold producer was admitted to the official list of ASX in December 2016.

Higher gold price boosts cash holding

Despite a six percent drop in production volume for the December quarter to 59,238 ounces compared to the September quarter volume of 63,104 ounces, Westgold’s cash holding increased by nearly ten percent during this three-month period. Cash and liquid assets at 31 December 2023 stood at $238 million. The increase highlights the benefit of Westgold’s unhedged production at a time of rising gold prices. Being debt-free, Westgold is not required to implement a mandatory hedging program, which is typically a requirement of lenders to gold producers.

The Company achieved an average gold price of A$3041 per ounce in the December quarter, and at an average all-in sustaining cost (AISC) of around A$2000 per ounce, it is easy to see why this well-managed gold producer continues to build its cash position.  Gold prices achieved in the December 2023 quarter were five percent higher than the A$2,888 received in the September 2023 quarter.

Workplace Fatality Prosecution Notice

On 29 December Westgold received a Prosecution Notice from the WA Department of Energy, Mines Industry Regulation and Safety in relation to a fatality at the Big Bell Mine Site on 15 December 2020.  The Notice alleges contraventions of the Mines Safety and Inspection Act. Westgold have stated that the Company’s safety culture has been transformed as part of its operational turnaround and that it remains in close contact with the family of their former employee.

Looking ahead

Westgold’s four underground mines and three processing plants and as owner/operator of its extensive fleet and fully exposed to the spot gold price, low operating costs and continuing high gold prices at or above A$3000 per ounce, strong ongoing cash generation looks set to continue into the foreseeable future. Importantly, the Company has recently confirmed that it is on track to deliver FY24 production guidance of 245,000 to 265,000 ounces.

Westgold’s FY2024 dividend policy is to pay a minimum of one cent per share dividend each financial year up to a maximum of 30 percent of free cash flow, subject to maintaining a minimum net cash balance of $100 million after payment of any dividend. This policy implies that shareholders may soon see dividends begin to be paid.

The Company plans to release more comprehensive operational and financial information for the December quarter on Wednesday 31 January 2024.