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Westgold records third consecutive quarter of cash build

Updated: May 2

Westgold Resources’ new solar farm at its Bluebird processing hub in Meekatharra. Credit: File

Westgold Resources is continuing to put together a strong balance sheet after producing more than 63,000 gold ounces from its combined operations for the past quarter to add $25 million in free cash to its books.

The company produced a total of 63,104 ounces from its Murchison and Bryah operating centres in Western Australia and achieved an average gold price of $2888 per ounce for the September quarter. The significant boost brings Westgold’s cash, bullion and liquid assets to $217 million – up from $192 million at the end of the past financial year.

It also marks the third consecutive quarter that the gold miner has built on its cash flow.

Management says the positive production period leaves the company on track to deliver its financial year production guidance of between 245,000 and 265,000 gold ounces.

Just last month, Westgold revealed plans to hit the new financial year with a $25 million exploration program on the back of showing it had grown its group mineral resource by 311,000 ounces in the previous period. The company says it finished the period with a total mineral resource of 107 million tonnes at 2.39 grams per tonne gold for 8.3 million ounces and has also confirmed total ore reserves of 23 million tonnes at 2.68g/t gold for 2 million ounces – a 6 per cent increase in ore reserve grade and a 7 per cent hike in its mineral resource grade.

Looking forward, Q2 will mark the first full quarter with cash flows unimpeded by fixed forward contracts. We can fund our exciting suite of internal growth options from operating cashflows and see opportunities such as Great Fingall as heralding a new stage of Westgold’s transformation into a progressive and more profitable Australian gold miner. Westgold Resources managing director Wayne Bramwell

The company’s total mineral resource takes in two distinct geological terrains, with its Murchison operations on the Archean Murchison province and its Bryah operations in the Proterozoic Bryah Basin. The Murchison operations take in the Bluebird and Tuckabianna processing hubs, while ore from the Bryah operations are processed at the Fortnum hub.

Management says systematic drilling delivered respective mineral resource upgrades at both its Big Bell and Great Fingall operations of 55 per cent and 49 per cent. It currently has eight drill rigs running in a bid to expand its mineral resource and add to its impressive ore reserve.

In addressing gold production, Westgold unveiled a 2023-24 guidance of 245,000 to 265,000 gold ounces at an all-in sustaining cost (AISC) of between $1800 and $2000 per ounce after hitting its target at the top end of production and mid-point of AISC in the past financial year. It says continued strong production from the company’s Blue Bird and Big Bell mines near Meekatharra underpinned an improvement in total ore processed at an increased grade.

The first of Westgold’s four hybrid power stations is also officially up-and-running at its Tuckabianna site, 20km east of Cue, replacing its existing diesel-powered facility. The hybrid facility includes a 6MW solar farm fitted with 11,088 photovoltaic panels, a battery energy storage system with 2.4MW capacity and a 9.5MW gas-fuelled power station for a total of 17.9MW.

The company says the planned 82MW, four-plant facility is expected to reduce its annual diesel fuel consumption by 38 million litres and lower annual carbon dioxide equivalent emissions by about 57,000 tonnes. It expects its AISC to reduce by some $60 per ounce due to the lower cost of energy provided by the new hybrid power facilities.

And with today’s gold price in Australia hovering at about $2900 an ounce, the financial metrics for Westgold are looking better by the day.

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