All good points, though some of them were part of the reality of mining, particularly when using legacy assets like the failure of Paddy Flats, which caused a serious miss on guidance. WGX I believe have been working incredibly hard to ensure a mistake like this does not, cannot occur again. If their huge infill drilling programs prove that mineralisation is no longer economic, Wayne has shown he is willing to take hard decisions to close mines.
The reduction of the guidance was disappointing, but... what should Wayne have done... not changed guidance? Hopefully in 7 months time, your negative viewpoint is proven overly pessimistic. Guidance of FY25 is locked in, now they have to meet it.
WGX is IMHO the most leveraged play on the ASX for mid tier producers, though RRL is a close second (but I see WGX having the potential to increase production by 20-45% whilst RRL is shrinking its production profile).
You make a great point about the Murchison, it has struggled, but as above, if Paddy had not failed, the extra 20-40k ounces p.a would have made things look very different. Hence why Great Fingall and Bluebird Complex are so important to resetting the Murchison.
Wayne is doing what an MD should and needs to do, spruiking the growth assets.... to do anything less for me, shows a lack of passion and competency. Being an MD is more than just being a 'boss'.
You totally skip over the fact that WGX bought out the Karora assets, with a large cash payment, plus a huge amount of fees/taxes. Just the reality of doing a big deal. Would be really good to hear your thoughts on Beta Hunt, as you sole focus on the Murchison assets, when that is now just half the business.
Mining costs money, the Murchison requires more capex to make sub par mines into long life mines. Or would you advocate they don't spend, and just run the mines and plants into the ground?
Even with the high capex spend, WGX, if it hit's guidance will generate significant FCF, but, to be fair, that is unlikely to kick in until the June Q onwards.
Appreciate the differing opinion, and hopefully WGX continue to transform from a high cost, short mine life producer into, something very different.
WGX Price at posting:
$2.89 Sentiment: Hold Disclosure: Held
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