Ann: July Corporate Update, page-6

Hey Bull,
it's an interesting article - Davids and Goliaths: Is this the year the gold sector’s mid-tier wins?

I am not really convinced that Zep said 'up', my guess, he said 'us'. As in, grouping the two companies together for the purpose of discussing their recent share price rises. Though of course, anything is possible in regards to consolidation.

What I found far more interesting, was what WB shared in regards to the current mine lives of the main U/G producing assets.
Big Bell 7-10 years
Bluebird - 3 years
Starlight (been mined for 7 years with just 1.5 years of original mine life) 2.5-3 years currently
Paddy's Flat 18-24 months

Hence why logically, WB and the WGX team are focusing so much more on exploration. I would almost argue, that with more free cashflow coming from the unhedged gold, they could justify spending even more on drilling ($20m in FY23). Yes, they have 9 rigs running currently, but... as I understand it, almost all of them are focused on the 4 current U/G mines (which is of course, important, but... there are many other targets WGX have).

I also appreciated the clarification on the reduction in diesel usage. From 8.5ml a month, down to less than 2.5ml, is almost a 75% reduction. That is huge.
Though I think this will change somewhat as new mines are brought online, as the stockpiles obviously use less diesel.
Let me clear, if we just use some basic maths, WGX spent $160m on diesel, but plan to spend around $46m instead. An incredible change (but... to be clear, the other energy being used to power things, does costs $$, it's not free).



The recent presentation regarding dividends keeps me pondering about what is said, versus.... what will actually happen.
WGX looked at upgrading the Tuckabianna mill, but.. shelved it without a really clear reason. WGX two other mills are basically not discussed in terms of large expansions, so... the only way WGX can really grow, is via the acquisition of a company/asset with a working plant. I don't really like repeating myself, but WGX keeps saying their skill set is U/G mining, which clearly is the base as they only mine U/G right now. In the Murchison region, other than defunct projects to the north, and Kirkalocka to the south (but... that is mostly open pit), the logical bolt on is GCY with it's Never Never U/G discovery.
Why WGX did not throw $40m at GCY when it was recapitalising is beyond me, but... what's done is done.
WGX has sold out of AME and clearly is pivoting away from the Sandstone region. I don't discount them looking at PNR and its Norseman project, but... I really think WGX needs to genuinely consolidate its current assets, another 6 months of ever growing cash generation will boost WGX share price more than any acquisition (or at least a large purchase).

Fortnum is IMHO underutilized, it just needs more U/G ore, and it could easily produce 100k p.a. But... it seems to get very little attention. I really do feel there must be stranded assets nearby.

My main concern right now, is... just what is the longer term plan for WGX, say 5 years from now. Hopefully WB and the board can really start articulating that to the market.