WESTGOLD RESOURCES LIMITED. (ASX:WGX) - Ann: Presentation - September Quarterly Overview, 64480037, page-7 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Originally posted by Joelstar: ↑

Hey @speculator101

Thanks for sharing your thoughts mate.
Very interesting take.

I'm interested to know why you think there will be another 10-million-dollar drawdown next quarter?

I was expecting neutral to a small profit for the reasons below:

This is what I'm estimating

Cash Drawdown Sept Q $31,000,000

Dec Q est. 10.5 million reduction on money spent for growth capex and exploration.

Cash Drawdown running total Dec Q $20.5 million

Sept Q AISC 141,000,000
Dec Q AISC approx $1,980 * 65,000 = $128,700,000
Saving est. $12,300,000

Cash Drawdown running total Dec Q $8.2 million

Hedge book price per ounce increase $30
65,000 * $30 $2,000,000
Saving est. $2,000,000

Cash Drawdown running total Dec Q $6.2 million

Sustaining cost reduction with 3 mines mothballed Sept Q (South Emu, Comet, Fender)

Sept Q Sustaining CAPEX 13 million
Dec Q Sustaining CAPEX 8 million
Savings est. 5 million

Cash Drawdown running total Dec Q 1.2 million

Other improvements likely to positively effect Dec Q cashflow

1. Increased monetization of stockpiles with SET and COMET paused (will negatively affect Murchison AISC).

2. Big Bell expected to be trending towards more ounces and increasing grade QoQ

3. Bluebird UG tonnage expected to trend higher QoQ

4. Bluebird Mill throughput expected to continue improving throughout FY23 (as you mentioned still miles below nameplate)
5. Staff rationalization over Sept Q (redundancy payouts etc)

6. Fortnum mill throughput expected to improve.

Obviously things like gold price and costs moderating will have the largest impact.

I'm hoping that mining costs will continue to trend lower into Q3 as grades and mining efficiencies are improved. The mine plan should be systematically optimized by then using all the collated infill drilling data from the big 4 mines.

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morning again Joel.
Cheers for doing all the heavy lifting!
I def glossed over many of the details you have investigated.
Without doubt, the overall trend/progress for the company is on the up, though whether the 'market' will believe it yet is a very different matter.
As I hypothesized, less than $10m would please me, though of course, a positive build would be better!
Mining costs should def decrease for WGX, though diesel is still up (crazy prices.. but then... I remember saying to anyone that listened back in 2012, that $2 a litter would be nothing compared to the future....hmm... took a decade to be right!)

I guess I just view such a dramatic improvement as being less likely, because... mining is fricken hard and makes my day job seem like a stroll in the park. It takes time to right the ship and the MD is still only recently able to do things his way.

Hopefully you are right and they hit it out of the park. I do feel that them having being able to relocated staff, is going to really enable much smoother operational outcomes (something which many producers are struggling with).

Interesting point about Big Bell. That does make some sense. Hopefully the new MD can change it back, as if RRL can do it with 3 plants, WGX should be able to with 2. Speaking of Big Bell, just a small increase in the Big Bell grade back to 2.7g/t, sees an extra 8k ounces p.a. That is a big difference to profitability.

I am much more excited about WGX in 2023, where we will see all sorts of improvements, enhancements etc. Though I have most of the position size wise now, so.... it's sort of more a waiting game now. If the MD and team perform, then I will slowly become a longer term holder.
(totally off topic, but... I noted that RH from GCY is moving up the ranks in RED).

As you mention, they have indeed taken the 'corporate' word from the presentations. I view that as simply wanting to not dilute the message they are currently pushing to the market. Profitability first... everything else second. I do think the MD would still want to add GCY to its mix, as it would seriously enable WGX to reduce its overall cost profile (with... the right ore being fed to the plant). I still don't understand why the likes of RMS MD does not take out GCY (and logically, then MGV). The lack of boldness in the sector is... very telling.

@Mudrat1 - hey Mud, def not forgetting Bryah. Its their best asset! (as per my post).

Enjoy your Sunday everyone.