Earnings call transcript: Westgold Resources’ Q3 FY25 revenue reaches $363 million

Westgold Resources Ltd reported its financial results for the third quarter of fiscal year 2025, highlighting a revenue of $363 million and gold production of 80,107 ounces. The company is benefiting from favorable gold prices, with a realized gold price of $4,630 per ounce. The stock price of Westgold Resources saw a modest increase of 1.16%, closing at $3.02. According to InvestingPro analysis, the company’s market capitalization stands at $1.84 billion, with impressive year-over-year revenue growth of 38.88%. The stock is currently trading near its Fair Value, suggesting balanced market pricing.

Key Takeaways

• Westgold Resources reported Q3 FY25 revenue of $363 million.
• The company produced 80,107 ounces of gold, capitalizing on strong gold prices.
• Westgold’s stock rose by 1.16% following the earnings announcement.
• The company maintained its FY25 guidance and expects increased production in Q4.
• Strategic divestments and operational consolidations are strengthening the company’s position.

Company Performance

Westgold Resources demonstrated solid performance in Q3 FY25, with a focus on optimizing its operations and capitalizing on the strong gold market. The company’s strategic divestment of the high-cost Lakewood Mill for $85 million has contributed to its robust liquidity position. Westgold’s unhedged status allows it to fully benefit from the current gold price environment, enhancing its competitive edge in the market.

Financial Highlights

• Revenue: $363 million
• Gold Production: 80,107 ounces
• Realized Gold Price: $4,630 per ounce
• All-in Sustaining Cost (AISC): $28.29 per ounce
• Cash, Bullion, and Liquids Position: $232 million
• Net Mine Cash Flow: $87 million

Outlook & Guidance

Westgold Resources has maintained its FY25 guidance and anticipates a substantial increase in production for Q4 FY25. The company is focusing on the expansion of Bluebird South Junction and nearing completion of infrastructure projects at Beta Hunt. Westgold is also exploring new resource potential at Fletcher Zone and expects to bring soft oxide ore from the Murchison Gold agreement in FY26.

Executive Commentary

Wayne Bramwell, CEO, emphasized the benefits of being a fully unhedged gold producer in the current market, stating, "It’s a great time to be a fully unhedged gold producer in Australia." Tommy Heng, CFO, added, "We are completely free of any gold price hedging, so the company continues to offer shareholders full exposure to the current record gold prices."

Risks and Challenges

• Operational challenges at Murchison operations could affect production.
• The company’s reliance on gold price fluctuations poses a risk if prices decline.
• Potential delays in infrastructure projects could impact future growth.
• Market volatility and economic uncertainties may affect investor sentiment.
• Achieving targeted synergies and cost reductions remains a challenge.

Westgold Resources’ strategic moves and strong financial performance position the company well in the current gold market, with a focus on growth and efficiency in the coming quarters. Analysts maintain a bullish outlook on the stock, with InvestingPro data showing a strong consensus recommendation of 1.25 (where 1 is Strong Buy). The company has demonstrated impressive momentum with a one-year total return of 34.89%, and analysts expect continued growth in both sales and net income for the current year.

Full transcript - Westgold Resources Ltd (WGX) Q3 2025:

Shane, Conference Call Moderator, Westgold Resources: Morning morning, everybody, and welcome to the Westgold Resources third quarter quarterly conference call. Your speakers for today are Wayne Bramwell, managing director and CEO, Aaron Rankin, COO, and Tommy Heng, CFO. I’ll turn you over now to Wayne Bramwell, managing director.

Wayne Bramwell, Managing Director and CEO, Westgold Resources: Thank you, Shane, and to everyone who’s joined today’s call. Let’s jump straight in. Slide four. In q three, Westgold produced 80,107 ounces of gold in line with production from q two at an all in sustaining cost of $28.29 dollars per ounce. We generated 363,000,000 in revenue at a realized price of $4,630 per ounce.

This is a great time to be a fully unhedged gold producer in Australia. Westgold generated a record operational cash build of a hundred and 7,000,000 before investing 74,000,000 in growth and exploration. Post merger, it took two quarters to stabilize our much larger business, and it’s great to see us build cash as planned. We ended the quarter with our cash, bullion, and liquids position being 232,000,000, 80 million dollars higher than the prior quarter. Consistent with our strategy to simplify our business and focus on our larger and more efficient mines and mills, we divested the high cost liquid mill for a total consideration of $85,000,000 during the quarter.

This deal comprised $70,000,000 in cash and $15,000,000 in script. Slide five. Before we go further, I want to highlight the great work done by our teams in the safety space. We have consistently delivered a downward trajectory in our total injury frequency rate. This quarter dropping by eight percent to six point two seven injuries per million hours worked.

It’s a credit to every individual and every team across our business that go out there every day and choose safety, a key value across our business. Slide six. Post the Southern Goldfields transaction, we are following the same successful process Westgold undertook in f y twenty three. We have taken two quarters, q one and q two of f y twenty five, to recalibrate the new larger business for greater simplicity, efficiency and cash flow generation. In Q3 FY twenty five, we have delivered a record quarter on quarter cash build and through the execution of our growth strategy, we are set to further expand margins into the future.

Slide seven. The key takeaway from these slides include consistent production quarter on quarter for the group and increasing margins, albeit offset by a temporary quarter on quarter increase in cost. Pleasingly, production continues to increase from the Southern goldfields on the back of higher grades at our Beta Hunt and 2 Boys underground mines. On the flip side and disappointingly, the Murchison continues to underperform, driven predominantly by lower output at our Fortnum project. Aaron can speak to some of the detail later on here.

Being unhedged, we are taking full value of the gold price at the moment. As a result, we benefited from a strong $1,800 per ounce all in sustaining cost margin. As we move into q four, we expect to see significant improvements in our outputs, both production and cost, due to the completion of infrastructure projects in the Southern Goldfields and increased outputs from the Murchison. Slide eight, FY 20 five guidance maintained. I’m pleased to reaffirm today that Westgold maintains its FY twenty five guidance and that we envisage a substantial increase in production in q four FY twenty five, predicated on the ramp up of our two growth engines, Beta Hunt and Bluebird South Junction.

And with that, I’ll pass the mic back to Aaron to discuss the operations.

Aaron Rankin, Chief Operating Officer (COO), Westgold Resources: Thank you, Wayne, and welcome to all on the call today. Slide 10. As a high level summary of our operations, we produced 1,000,000 tonne of ore from our mines, slightly lower than the prior quarter. This was offset by higher grade driven predominantly by Beta Hunt, Fender, and Tuboys. We processed 1,300,000 tons of ore in the quarter in line with our prior quarter with stockpiles being used to supplement mined ore feed.

Grade has been consistent at the group level as a result of the blending of stockpiles. This resulted in consistent production quarter on quarter at a group level. But as we saw back in slide seven, the production split between the Murchison and Southern Goldfields has been changing, and that’s what I’ll discuss in the following few slides. Slide 11. In the Murchison, we saw quarter on quarter reduction mainly as a result of lower production from Fortnum.

Starlight, the underground feed for Fortnum, has been a strong performer, especially in the last few quarters, but had several issues in this quarter with illness in the workforce in February, lower haulage fleet availability with an aging fleet, and a focus on setting up access to the high grade Galaxy loads, leading to a higher rate of low grade stockpiles in the blend. Initial access to Galaxy is complete and haulage fleet replacements have commenced in April. Starlight production is expected to improve in q four. Lower production from Big Bell as we establish remnant mining areas was offset by increased production out of Fender. The Fender ore was split between Tuckabiana and Bluebird Mills.

Bluebird Mine produced more ore with increasing access to South Junction during the quarter, but at a lower grade. So contained gold ounces mined was consistent quarter on quarter. I’ll go into more detail about Bluebird and Big Bell in the next slide. All in sustaining costs were higher than the previous quarter as a result of increased stockpile consumption, increased sustaining capital expenditure, and from added haulage costs of stockpiles being processed predominantly at Bluebird. These elevated costs are temporary and will reduce with ramp up at Blue Bird South Junction, remnant rehab reduction to normal levels at Big Bell, ramp up to higher grade tonnes from Great Fingle and Starlight, and the reduction in processing stockpiles.

We continued to invest in these growth projects at Bluebird South Junction, Great Fingle, and Starlight mines during the quarter. The Murchison notionally generated 21,000,000 in cash flow to the business after growth expenditure. Slide 12. This slide highlights the key opportunity for future growth, excess milling capacity at Bluebird and ramp up of mining output. We have invested to better understand the ground and have a clear plan.

The ramp up is slower than we had expected, but the accesses are being built and the ramp up plans are sound once the accesses are in. Filling the excess capacity with high grade from Bluebird and other feed sources is key. Big Bell’s reduced quarter was driven by lower cave accesses becoming restricted, but will be offset once we open up remnant work areas, which will be the primary feed source from q four. At Starlight, accesses to the galaxy loads are in, mobile fleet is landing, and we expect to see this displace the lower grade blend quarter on quarter. Slide 13.

Moving to the Southern gold fields where we are making inroads. We had increased grade coming from Beta Hunt and Two Boys. Cost and productivity initiatives are taking effect with all in sustaining costs going down. The Lakewood mill performed as expected prior to its shutdown and clean out at the end of the month was successful. With our high cost production at Lakewood ceasing from q four, we expect further cost reduction for the Southern gold fields.

Pleasingly, we generated a notional 66,000,000 in net mine cash flow after growth and exploration spend from the Southern gold fields. Whilst we are making progress, mining rates at Beta Hunt continue to be impacted by infrastructure in the mine. Slide 14. The three key infrastructure projects at Beta Hunt are progressing and due for completion by the end of the quarter. These projects are key to unlocking productivity at Beta Hunt, and we’re ready to go.

Slide 15. Westgold’s overarching strategy for growth is to simplify our business with larger mines and larger mills. The single mill in the South allows us to fully utilize and optimize Higginsville, reducing operating costs and derisking monthly production with adequate ROM stocks. We are working on debottlenecking Higginsville through low capital process changes and the blending of soft oxide open pit material, which we have commenced mining at Lake Cowan. We’ve also recently released a scoping study for the expansion of Higginsville to 2,600,000 tonnes per annum.

This expansion will unlock value in the region. Slide 16. I’ll quickly talk to Great Fingle on the next slide before handing over to Wayne so he can talk about ResDev. The decline development at Great Fingle continued to make progress during the quarter and has now descended below the level of the uppermost planned Virgin Stopes. Life of mine infrastructure work continued as planned with primary ventilation installation being completed during the quarter.

Dewatering of historical mine workings is continuing and remains a critical path for first ore in Virgin Stopes at Great Fingle. The previously highlighted Greatfingle Flats early underground mining opportunity at the base of the Greatfingle Open Pit has also progressed with first ore expected in q four. On this image, I’d also like to highlight some of the great drill results we’ve encountered with intercepts like 5.7 meters at 8.25 grams per tonne, highlighting the awesome potential of this operation. With that, I’ll hand over to Wayne to talk more generally about our drilling.

Wayne Bramwell, Managing Director and CEO, Westgold Resources: Slide 18. Thanks, Aaron. I’m going to be brief here and just highlight some key points. We have released a comprehensive exploration report today, and I encourage you all to look through this for further detail on our exploration and resource development activities during the quarter. I won’t read out the drill hits here, but as you can see, the drilling at nightfall is outside the mine plan.

We are really excited about the future of Starlight and the opportunities to expand this project. Slide 19. The Fletcher Zone within Beta Hunt is a key focus and continues to deliver width and grade in our drilling. We are nearing completion of the resource definition program and are on track to produce a maiden resource for Fletcher during this quarter. I’ll now hand back over to Tommy to go through the financials.

Tommy Heng, Chief Financial Officer (CFO), Westgold Resources: Thank you, Wayne. Slide 21. This quarter, we sold 78,000 ounces of gold at a strong realized price of $4,630 an ounce for a total revenue of $363,000,000. Westgold is completely free of any gold price hedging, so the company continues to offer shareholders full exposure to the current record gold prices. Our cost have increased quarter on quarter, albeit temporarily due to increased stockpile consumption, sustaining capital and increased haulage, particularly for the bluebird mill.

But importantly, these cost escalations we see are, as said before, temporary. The growth in production we expect in Q4 should also reduce our costs per ounce as we reduce the need for haulage and more effectively consume our processing capacity with higher grade ore. Our strong margins, which was assisted by our full exposure to the gold price, allowed us to generate a notional net mine cash flow of 87,000,000 and add to our closing cash bullion and liquid position by 80,000,000 such that we closed at GBP $232,000,000 for the end of the quarter. With the remaining GBP $250,000,000 of undrawn capacity in our corporate facility, Westcott ended the quarter with GBP $482,000,000 of available liquidity, a strong position from which to grow. Slide 22.

This picture tells the story of where our cash position at the end of the quarter sits. The key takeaway in this, our operations delivered $107,000,000 cash build before growth and expiration and we closed the quarter with $232,000,000 in cash, bullion and liquid investments growing our quarterly closing position by 80,000,000. We also received 25,000,000 of cash as part of the total 70,000,000 cash consideration for the sale of liquid. We expect a further 20,000,000 before thirtieth June twenty twenty five and the 25,000,000 balance by thirtieth November twenty twenty five. I note that we’ve also paid down 30,000,000 in working capital this quarter, a function of consolidating and integrating this now larger business.

We invested 63,000,000 in growth capital predominantly in development at Blue Bird South Junction and Great Fingal and also upgrading of power, ventilation and paste infrastructure across the portfolio. We also invested $3,000,000 into New and Gold via participation in their equity raise. We are pleased to note that this quarter, all condition precedent to the all purchase agreement in place with New Merchants and Gold have now been met or waived, which is great news for both sets of shareholders. Lastly, on this slide, I mentioned that whilst we received million dollars in Black Cat Syndicate script as part of the liquid divestment, we have not included this in our liquid investments as there is a twelve month escrow period in place. With that, we closed the quarter with 232,000,000 in cash, bullion and liquid investments.

Slide 23. This graph highlights our monthly cost performance. The red bars shows the total all in sustaining costs with the increase in February and March, a result of increased stockpile processing. In the earlier months of calendar year 2024, you can see that the effect of our efforts in the Merchant Operations to optimize our cost base and prioritize profitability, taking total AISC from the high $40,000,000 to the mid $30,000,000 mark. We intend to do this again with the Southern operations and we are confident we can achieve this.

We have the following near term catalyst for reducing our Group All in Sustaining Cost per ounce, expansion of Blue Bird South Junction and Beta Hunt, which will displace stockpile and reduce haulage whilst increasing mill grade. Improve processing costs in the Southern Gold Fields by dispensing of high cost milling at liquid. Improve outputs at Starlight and application of synergies, are already starting to take effect in the Southern Gold Fields, which I’ll talk to in the next slide. There’s a lot to look forward to as we execute our plan. Slide 24, we’ve already realized CHF 32,000,000 of our 49,000,000 of targeted pretax annualized synergies since the transaction.

These are listed in the table on the slide. Importantly, we are not done yet. We have identified further opportunities in the areas of accommodation services, flights and supply chain commodities that have scope to be realized in Q4 FY twenty twenty five. Moreover, we have GBP 100,000,000 in active tenders at the moment, which we expect to deliver savings into FY ’20 ’6. Watch this space.

And with that, I’ll hand back to Wayne for closing.

Wayne Bramwell, Managing Director and CEO, Westgold Resources: Slide ’26. Thank you, Tommy. The plan ahead. The plan ahead is simple. In the Murchison, it’s about the delivery of the Bluebird South Junction expansion.

All hands are on deck, and the whole workforce is leaning into bringing on on South Junction in a timely manner. This unlocks a whole raft of benefits such as less reliance on low grade haulage and increased feed grade to our bluebird mill. In the Southern Goldfields, it’s about delivering the infrastructure upgrades, Beta Hunt, and defining the Fletcher Zone. We’ve managed to simplify and balance the mine and mill equation in the Southern Goldfields this quarter, so now it’s about realising the margin improvement that we know we can achieve through more beta hunt being processed at Higginsville. With

Aaron Rankin, Chief Operating Officer (COO), Westgold Resources: that,

Wayne Bramwell, Managing Director and CEO, Westgold Resources: I will close today’s presentation and open the call to questions. Thank you.

Shane, Conference Call Moderator, Westgold Resources: Thank you, everyone. If you would like to ask a question, if you could enter it into the question box through the webinar software. It’s the little square with the question mark. And we’ll just pause for a second now to take the questions. First question comes from Larry and it is, Is the mining method at Bluebird appropriate for the ground conditions?

Aaron Rankin, Chief Operating Officer (COO), Westgold Resources: Thank you, Larry. This is Aaron. I’ll take that question. So look, we’ve done a lot of work on understanding the ground conditions surrounding the Blue Bird South Junction ore body recently. Essentially, in short, the ore body ground conditions are absolutely appropriate for the mining method we’ve selected.

The poorer ground conditions we’re experiencing are in the footwall of the ore body. The ore body itself is actually quite competent and good and will support the large stope shapes. The footwall design infrastructure. We’ve got the engineering solutions and we’re undertaking the new designs at the moment.

Shane, Conference Call Moderator, Westgold Resources: Next question is from Paul. Hi, team. Can you please talk us through the ground conditions that oh, we’ve just had that with Blue Bird. Sorry. I’ll just move to the next question.

Next question is from David. What is the life of mine of Tuboynes and the new Lake Cowan opportunity?

Andrew McDougall, Exploration/Technical Team Member, Westgold Resources: Hi. It’s Andrew McDougall speaking. Yeah. The Tuboynes has had some really positive resource definition drilling results to the east in the past months. We expect to finish that program through the course of this quarter.

Two boys, we’re now planning to operate all through next year and there’s a period of harvest beyond that. What excites us is it gets us close to older workings, 400 meters beyond that current drill position for future potential. So pretty exciting times at at Chewy’s. The life of mine pits at Cowan are expected to mine for five to six months and processing will continue through next year.

Shane, Conference Call Moderator, Westgold Resources: Thank you. And just a reminder, everybody, if you would like to ask a question, just enter it into the chat box. Next question is respect to the fleet at Starlight. What is the plan for the old fleet at Starlight?

Aaron Rankin, Chief Operating Officer (COO), Westgold Resources: This is Aaron again. I’ll take that one. Essentially, the whole fleet is what we’re replacing at the moment and, four new trucks going into that mine this quarter. Essentially, the current mine life that’s, come out of the drilling has allowed us to invest in in new equipment, which will give us lower cost, better productivity, which is in line with the work we’ve been doing in our broader fleet strategy overall to have, less newer equipment that’s more productive.

Shane, Conference Call Moderator, Westgold Resources: Question from Paul on, r and r for Beta Hunt, and he would like to know, when they’ll get an updated reserves and resources of Beta Hunt and how do you think grades will change under your ownership?

Andrew McDougall, Exploration/Technical Team Member, Westgold Resources: Yeah, thank you. It’s Andrew speaking again. We’re pretty excited about the drill results we’ve received from the Fletcher program. Overall, the resource has about a 35% conversion, so we’ll get into ResDef of the greater resource. At the moment, that looks like it’ll be quite an extensive outcome for Fletcher, but we haven’t yet declared anything publicly that will be announced in August when the reserves and resources statement.

Shane, Conference Call Moderator, Westgold Resources: Next question from Andrew. Hi, team. Could you please provide a bit of flavor around the NMG agreement and the potential effective efficiency of the mill and recovery rates?

Wayne Bramwell, Managing Director and CEO, Westgold Resources: I’ll take that one. Thank you for that question, Andrew. Look, the new Murchison agreement is a win win for both groups of shareholders. What it does, it provides the secret source we’re missing at Mecatharra at the moment, which is soft oxide ore. We’re expecting to see that ore from Crown Prince coming in in the first half of FY twenty six.

And what does it bring? It brings grade and soft material which can we can blend with our harder underground ore from Bluebird South Junction. We expect the throughput in the mill to go up. But what that ore source effectively does means instead of bringing low grade to make a thorough to process, we’ve got an approximate ore source with a grade of circa three grams per tonne, which will be substituted for the low grade stocks we’re currently milling. So overall, increased throughput, certainly increase in head grade.

Shane, Conference Call Moderator, Westgold Resources: Thank you. And the next question is from David. It’s a question on Blue Bird. He’s noted that there’s been 109 kilotons in the March with a target of approximately 300 kilotons per quarter. How quickly do you think that can ramp up?

Aaron Rankin, Chief Operating Officer (COO), Westgold Resources: Yes, thank you for the question. I’ll take that one. Look, so essentially, the ore body can sustain the 100,000 tonne run rate without a problem. The real question is around getting our infrastructure set up and the accesses into the ore body to allow us to produce at that rate. So we’re undertaking some updated design work as was invested in drilling and modeling of the geotechnical conditions in the footwall.

So I don’t have a definitive answer on that as of today, other than other than to say that absolutely that run rate is able to be supported by the ore body.

Shane, Conference Call Moderator, Westgold Resources: Just a follow-up question on Bloomberg sorry, not Bloomberg, Blue Bird from Paul. And what sort of ratio should we assume from Blue Bird South Junction in the June as part of your guidance?

Aaron Rankin, Chief Operating Officer (COO), Westgold Resources: Yes, look, I’ll take that one again. So essentially, we continuing to increase production out of Bluebird South Junction. We are getting into South Junction proper stopes from this month, which will lift that percentage month on month, which will continue up to the 100,000 run rate.

Shane, Conference Call Moderator, Westgold Resources: The question from Larry, which is on the rising main upgrade. I I assume that’s a bluebird. So he just wants to ask when when that’s expected to be completed.

Andrew McDougall, Exploration/Technical Team Member, Westgold Resources: Yes. So the rising mine for Beta Hunt. No. The rising main isn’t required for the increase in production rate. There are a number of projects that will facilitate that increase that we’ll continue to work on through this quarter, including the ventilation upgrade and the water upgrade and obviously equipment.

We think that’s going to be completed in the coming months on schedule, and then we’ll see the the increase through the course of this quarter.

Shane, Conference Call Moderator, Westgold Resources: Your next question comes from David. First ore is expected from Greatfinger this quarter. What is the normalized quarterly throughput at Greatfinger or rather the potential? And how quickly can you get there?

Aaron Rankin, Chief Operating Officer (COO), Westgold Resources: Yes, thank you. I’ll take that question. So the Great Fingle mine plan, inclusive of Golden Crown ore body getting up and running, should get us to around the 40,000 tonne a month mark. That will be happening later FY ’26 into FY ’27 as we open up both ore bodies.

Shane, Conference Call Moderator, Westgold Resources: A question from Nick, and this might be difficult as this sort of forecast here, but what can we expect when you achieve forecast production run marks of 100 kilo ounces per quarter in terms of cash flow from operations?

Tommy Heng, Chief Financial Officer (CFO), Westgold Resources: Thank you, Nick. I’ll take that question. Obviously, the guidance is for the next upcoming financial year is in the workings. But as you see from our performance this quarter and our operating margin, one can only make the assessment. So stay tuned for what will be coming in the coming months for our new FY twenty six guidance.

Shane, Conference Call Moderator, Westgold Resources: Apologies, everyone, for the background noise. It’s on the terrace. We’ll just pause there to allow some more questions.

Wayne Bramwell, Managing Director and CEO, Westgold Resources: I’ll hand you back now to Wayne for some final comments. Thanks very much, Shane. Look, thanks for everyone patching in today for this quarterly call. It’s been a busy time and there’s a lot of work happening in the backgrounds at Westgold. Anyway, it’s a great time to be unhedged.

Team’s focused on delivering Q4 and we’ll look forward to a different set of numbers at the end of Q4.

Shane, Conference Call Moderator, Westgold Resources: Thank you everybody. That concludes today’s webinar.

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