Westgold Resources’ Earnings Call Highlights Growth and Challenges

Westgold Resources Ltd ((AU:WGX)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call for Westgold Resources Ltd presented a generally positive sentiment, highlighting the company’s strong cash flow generation and increased cash position. Safety improvements were also noted, although these positives were tempered by increased costs and underperformance in certain regions. The company’s commitment to maintaining its FY 2025 guidance and expectations for improved future performance added to the optimistic outlook.

Record Operational Cash Build

Westgold Resources reported a record operational cash build of $107 million, showcasing the company’s strong financial performance. This achievement was made before investing $74 million in growth and exploration, indicating a strategic focus on future expansion and development.

Substantial Increase in Cash Position

The company ended the quarter with a cash bullion and liquids position of $232 million, marking an impressive $80 million increase from the previous quarter. This substantial cash position reflects Westgold’s effective financial management and operational efficiency.

Divestment of High-Cost Lakewood Mill

In a strategic move to streamline operations, Westgold divested its high-cost Lakewood Mill for a total consideration of $85 million. This divestment included $70 million in cash and $15 million in script, allowing the company to focus on more efficient operations.

Safety Improvements

Westgold reported an 8% reduction in its total injury frequency rate, which dropped to 6.27 injuries per million hours worked. This improvement in safety metrics underscores the company’s commitment to maintaining a safe working environment.

Strong Revenue Generation

The company achieved $363 million in revenue at a realized price of $4,630 per ounce, demonstrating robust revenue generation capabilities. This performance highlights Westgold’s ability to capitalize on favorable market conditions.

Positive Net Mine Cash Flow

The Southern Goldfields region contributed significantly to the company’s financial health, generating a notional $66 million in net mine cash flow after accounting for growth and exploration expenditures.

Maintained FY 2025 Guidance

Westgold maintained its FY 2025 guidance, with expectations of increased production in the fourth quarter. This guidance reflects confidence in the company’s operational strategies and future performance.

Increased Costs

The company experienced increased all-in sustaining costs, attributed to higher stockpile consumption, sustaining capital expenditure, and haulage costs, particularly affecting the Bluebird Mill.

Underperformance in Murchison

The Murchison region underperformed due to lower output at the Fortnum project, compounded by workforce illness and reduced haulage fleet availability. This underperformance highlights challenges in operational execution in specific areas.

Slow Ramp-up at Bluebird-South Junction

The ramp-up at Bluebird-South Junction was slower than anticipated due to delays in infrastructure setup. This issue underscores the challenges faced in project execution and timeline management.

Forward-Looking Guidance

Looking ahead, Westgold Resources reaffirmed its fiscal 2025 guidance, anticipating significant production increases and cost reductions in the fourth quarter. These expectations are driven by the completion of infrastructure projects and increased outputs from key mines, positioning the company for continued growth.

In summary, Westgold Resources Ltd’s earnings call reflected a positive sentiment, driven by strong cash flow, increased cash reserves, and safety improvements. Despite challenges such as increased costs and regional underperformance, the company’s strategic divestments and maintained guidance signal confidence in its future prospects.