With gold investing finding fervour, gold stock market is increasingly coming into focus. Looking towards a fresh rally, one of the gold companies to invest in is
Westgold Resources Limited (ASX: WGX)
Westgold Resources Limited (ASX: WGX) is a top gold producer in Australia, valued at approximately $2.3 billion. The company has a solid financial standing, enabling self-funded growth through a robust balance sheet and unhedged gold production, offering full exposure to gold price fluctuations. It operates across two of Western Australia's richest goldfields, with a portfolio of five processing plants and six underground mines. Westgold’s goal is to bridge its valuation gap by optimizing its operations, improving costs, and increasing production. The company strategy is aimed at delivering free cash flow and shareholder returns, focusing on organic growth and larger, higher-output mining operations.
Westgold, In February 2025, announced the divestment of its Lakewood milling operation to Black Cat Syndicate for $85 million. The deal includes $70 million in cash, with staged payments over 9 months, and $15 million in Black Cat shares. This change allows Westgold to focus on optimizing its core assets and consolidating its processing capacity, particularly at its Higginsville site, where growth plans are already underway. The divestment aligns with Westgold’s strategy of focusing on larger mines with larger mills to enhance operational output and lower costs. For Black Cat, acquiring the Lakewood mill accelerates their processing capacity by 50% and allows them to fast-track production at their Kal East gold project, located nearby.
For the first half of FY25, Westgold produced 158,255 ounces of gold, with total production guidance set between 330,000 and 350,000 ounces for the full year. The company expects production in the second half to rise to between 172,000 and 192,000 ounces. Its All-In Sustaining Costs are projected to remain within the range of $2,400–$2,600 per ounce. Growth capital expenditure for FY25 is estimated at $200 million for the full year. The company investments include the expansion of key mines like Bluebird and Beta Hunt will enhance their annual output rates and further contribute to production growth.
Westgold is focused on infrastructure upgrades at its Beta Hunt and South Junction mines to drive higher productivity. These upgrades include replacing ventilation systems and enhancing mine water pumping capacity to improve operational efficiency. New ventilation fans are being installed to boost airflow by 50%, and the underground power feeder replacement project aims to reduce risks associated with the old power infrastructure. In addition, extensive drilling activities continue, including 365 kilometers of drilling in FY24, which has led to substantial resource additions and increases in reserves.
(Source: Company Reports)
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