Ann: Business Update - Westgold Operations, page-13

I've looked at a number of mining companies lining up to report their updates about the coronavirus. Interestingly, the responses from the market varied, or were even polarised. If I recall correctly, Westgold was among a few along with Perseus Mining and Resolute Mining that actually saw their stock price rise modestly after making the announcement. Many fell sharply, double digit % declines even though they have not put any mines on care and maintenance.

I agree that the Westgold update seemed more like a PR announcement to tick the boxes. Investors either liked it by buying the stock up, or institutional investors ramped up the price while selling to the smaller holders. Time will tell which it is.

That being said, Westgold is the only Australian based gold mining company with Australian only mine properties producing over 250koz pa still trading below $1 billion. They did have a long period of trading below $1.50 while they invested $300m into the ground but that is behind us. With Big Bell producing, have to see how much economies of scale it brings.

Currently, with an EV of around $750m (I'm adding into this the gold prepayment loan), while producing around 270koz for this year at AISC $1300-1400/oz, that is definitely cheaper than its peers. And with Big Bell getting under way, next financial year it should exceed 300koz.

I guess the management needs to build its shareholder trust due to its rather convoluted reporting. Reading this company's quarterly reports sometimes makes me need to read two or three times the same paragraph. It doesn't quite speak to me. Am I the only one?