A great outcome and a huge driver of ounces in the short to medium term. This is the sort of step change that WGX needs to cement itself as a much bigger, more profitable producer (costs lowering, ounces rising).
I also want to highlight that WB spoke yesterday about the company (and the coming reserves/MRE update in the next 2 weeks, I think it will be a ripper).
WB went through the whole business and the first thing that jumped out at me... was the sheer processing capacity of WGX now. Even if they only process at the reserve grade of 2.5g/t, 6.9mtpa at a 90% recovery, hits.... literally spot on at 500k p.a. Even just a 0.1g/t increase over the entire company increases the ounces by 20,000 ounces.
Really found it interesting that North America don't use contractors very much.... but therein lies a further opportunity for Westgold, because if it were to acquire a company that is 100% using contractors, that is 20-40% of margins to be saved by swapping to owner operator.... (cough cough PNR).
WGX also made great pains to say that he is most excited about Beta Hunt (Fletcher zone) and.... Higginsville early opportunities. This in itself is sort of crazy, as I view all of the assets on this list as very prospective. What other company on the ASX has so many known/proven opportunities to expand their business, let alone what the exploration might discover (mid tier producers that is)? I will throw in that Wayne admitted that Beta is currently mining at 1.7mtpa with the first goal to hit 2mpta in the near term, he then clearly states... 2.5mtpa is the next milestone!
I guess it's easy to see why he is excited about Beta... just the fact that they have only really converted 20% of the resource to reserves gives them a huge runway for growth, let alone the fact that they are already finding more gold (at better grades and thickness than the past, sort of like South Junction/Bluebird UG). Plus... what if the 3km of untested sees continued mineralization. 5m+ ounce potential...
Exciting to hear him state that South Junction/Bluebird is on track to have a 7 year mine life. This is a huge win, when not so long ago the Bluebird mill was looking very lonely. "we can't drill a bad hole in this system"..... what a problem to have He also clearly say that 1.2mtpa is just the start, more of a basis for further growth (that is a hugely exciting statement).
Love the bit about having a small head office... it's all about the operations (nice to hear they sold at spot of $3711 on Tuesday).
Sounds like the Nickel is a sleeping bonus (some further options over the long term to best monetize it). Question on a buy back - potentially, but need to build up the cash pile and only when they don't need the capital to grow the business. Synergies - suppliers - far larger discounts.... everything. They will make sure to start reporting these synergies (likely to start kick in early 2025). Technical teams (centralized and talking to each other). Did lightly touch on costs... AISC likely to start fall 'later in the year', my guess March quarter onwards. Dividends... hopefully increasing.
The discussion also focused on future catalysts for WGX: * Updated MRE and reserves soon * Lots of drill results from South Junction & Beta * 20 drill rigs operating across all the assets (I guess the 15 rigs they have are not enough!) 2 surface (at South Junction I believe), 18 underground. - the split being 17 in the Murchison, 3 in the south, which just shows.... how much opportunity Karora left for the merged entity to tap into. - with 2 rigs heading to Beta and another rig to Higginsville.
Well done to Wayne and I feel very comfortable being so heavily invested in WGX.
WGX Price at posting:
$2.79 Sentiment: Hold Disclosure: Held
He also clearly say that 1.2mtpa is just the start, more of a basis for further growth (that is a hugely exciting statement).
(20min delay)