Great post BB.
As you say, there is no need to rush providing guidance for FY25, albeit, I would be all for WGX providing at a minimum 3 year LOM plan like RMS does (and... SLR did once.. a few years ago). Especially when they now have 2 large mines going into development/early production with 8+ mine lives. I can understand that Paddy's and to a lesser extent, Bluebird have shorter lives, and that is ok, I mean, most already understand that to be case. The caveat being, with more drilling, Bluebird at least looks to have a much longer life.
Def trying to be very conservative, which is the right move, as WGX will have to keep working hard to rebuilt the reputation the past MD left it with.
I also agree, WGX is working hard to ensure their script is more valuable, which... it should be when compared to it's peers. Their peers have a natural advantage, particularly RMS, due to what I view as inflated market caps versus WGX. Hence why WGX had no real chance again RMS when bidding for MGV. Unless they were willing to screw over existing shareholders (which they did not). I am sure WB and the board are working every lever they have to continue streamline the business. They have not stated it, but... I continue to get the impression that they want a run rate to 500k p.a (though never stated anywhere). There are not a lot of internal avenues to do this, though, I think with further exploration and the inclusion of oxide feed, 400k p.a is likely achievable in 3-5 years.
Agree about GMD, but... RF is able to walk on water and so is GMD. I think they have a credible plan for 200k p.a, but only because SBM were clearly unable to run an U/G mine properly. GMDs assets before acquiring Gwalia were average at best. DCNs main open pits they plan to use for a future reopening are not going to be very profitable, yet... the market has decided, what RF wants he gets.
Hey
@plough, potentially, though if you take a closer look at, for example MEK, they have been telegraphing for months that they are going to toll treat some of their oxide open pits. There are only 2 real options, WGX and... CYL. That's it. Wiluna is a death trap and MEK want to eventually run their own small mill, so... toll treatment it is. This is of course pure speculation on my part, but... the pieces of the puzzle fit for me.
WGX have not once mentioned revisiting any of the 25+ open pits across the Murchison, but... with POG at $3k AUD, I wait patiently for them to change their mind. SLR recently brought an open pit back into production, because, the economics now stack up.
Fair enough about going after high grade U/G, but... there are fewer and fewer of those, with, bulk U/G mining the way of the future (for many reasons, not just grade itself).
I wonder if the market is taking it's time to digest the Big Bell announcement, because it does front load the non-sustaining capex, with approx $50 for Big Bell in FY25, and another $30m for Great Fingall (total $80m), versus the $60m for FY24. It's an increase of $20m which whilst not insignificant, is to enable a 16 year mine plan to get rolling.
All of this is fully funded by the cash they have plus coming cashflow. i.e. If WGX only aim to producer 270k for FY25, at a similar AISC to FY24 of $1800-2000, at spot prices, WGX is still going to generate upwards of $270-320m. Take off the non-sustaining capex (and normal growth capex, $70m in FY24) and exploration, and it could still generate upwards of $100m roughly. Meaning by the end of FY24, WGX might have close to $300m, with another $90-150m in the year after, so, $400m+, before dividends or any other actions.
I actually would be fine if WGX don't acquire anything. As above all else, profitability is what is going to cement a higher share price. A 350k p.a producer with a long mine life is nothing to sneeze at. But... I can also understand that economies of scale are a priority.
If things could be done again, WGX would have kept drilling its portfolio of assets years ago, and the fruits of that would be being seen now, but alas, they are starting from almost scratch outside of the current 6 U/G mines. This could and hopefully does prove to be another way for WGX to generate better returns and production growth.
(20min delay)
