WGX (ASX) Ann: Bluebird-South Junction Increases to 6.4Mt at 3.1 gpt Au

Originally posted by speculator101: ↑

Hey Iron,
firstly, I will just touch on the announcement a little further, as I did not get time to give it the attention it deserved earlier.
They are at pains to explain that there is potentially a step change (scale) in the production profile at Bluebird (currently 550kt p.a), will be at least closer to 750kt p.a as a stretch goal, though... perhaps even higher if the green highlighted area is mineralized too (exploration occurring this quarter onwards).

Also, just for context, in FY23, WGX was able to increase the MRE by 300k in TOTAL, with reserves not being fully replaced, I think FY24 will be vastly different, I mean, they just added 475k in just the Bluebird U/G, which should see a strong reserves conversion too.

I don't quite agree about South Junction being 3 years away from production, closer to 12-18 months max. They could push FID within the next 6 months IMHO with a new decline in operation with 3-6 months.

Regarding Paddy Flat being shut, yes, it caught them somewhat unprepared, albeit it was lower tonnage than Bluebird, but had been higher grades.
In regards to how they plan to fill the Bluebird Mill, I have been quite critical of the lack of clarity around how they might maximise the throughput at that plant, which is only running at 1.4mtpa (can go higher), yet... after some pondering and really thinking carefully about what WGX have available to them currently, as explained in the update today, the Bluebird mill has multiple ore sources, with Bluebird providing 550tkpa, followed by Big Bell and stockpiles.

Here is the reserves statement from last year. Basically, they are producing 1mtpa from Big Bell, 330kt from Fender (still ramping up), 550kt from Bluebird and then the rest is stockpiles. Basically, they are filling the Tuckabianna plant (they have a huge amount of stockpiles there that are profitable at record gold prices), then send whatever amount they need from Big Bell and Fender by truck north (and stockpiles too, even though I doubt they are very profitable).

Plus they have the stockpiles at Bluebird Plant itself. Suffice to say, they can fill both mills. Though especially Tuckabianna, with an almost unlimited amount of stockpiled ore.

I can see now why WGX has not needed to acquire any of its smaller neighbors, because they may as well use the stockpiles. Especially when they have multiple U/G mines they can bring online again.

Then you have Great Fingall which will produce around 300ktpa, which can also be sent north.

Basically, for example for Bluebird Currently)
550kt from Bluebird U/G
330kt from Fender
300kt from Big Bell
220kt from stockpiles (approx 2 years of Bluebird stockpiles at a guessimate).

Tuckabianna (currently)
700kt from Big Bell
650kt from stockpiles (approx 6-7 years)

Once Great Fingall ramps up (300kt), then you simply send it all to the Bluebird plant, removing the need for any use of the stockpiles.

I do still think that WGX should be reassessing the open pit potential nearby the Bluebird plant, if nothing else but for redundancy from the U/G mines, but they know best on this.

Could well get an update that throws mud on my face, but that is my read on things currently.

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Hey Spec thanks for the very detailed reply. I knew you would be thinking about the complex numerous parts that make up WGX. Looking forward to the quarterly, the physicals and hopefully a good story from WB about options for the next six to twelve months. I'm pretty sure this period of under performance will be burning WB (especially if he has one eye on the golden horse next door) and drive him to continue drilling WGXs under explored holdings.
I remember an article I read years ago from a gold expert saying one big mistake gold producers make is processing low grade ore as the POG rises makes it viable, rather than take advantage of high prices and process their highest grade to maximize output and cash in. I'm not saying that's what WGX is doing but hopefully the drill bit will give us plenty of options of higher grade mines going forward and reduce the need for filling the mills with so much low grade stockpiles and the risk of wassa's mine to mill.
I certainly hope WGX can fast-track any development to access bluebird surrounds, it seems very promising. Time will tell if its closer to your guess or mine, definitely hoping its yours. It would be nice to have the original assets of WGX humming before looking at the merger assets.