Path to 300,000 ounces

Happy New Year.

I hope it is a healthy and prosperous year for all shareholders. .

I think 2024 will certainly be prosperous for WGX as the company has done a very good job of cementing their future growth prospects. These are:

1) Great Fingall which is scheduled to start in the first half of FY 2025 (excluding remanent ore) forecast to produce at least another 45,000 ounces per annum at a very tidy $1,800 ASIC. This addition alone should get WGX to over 300,000 ounces. See announcement 23rd October and 9th August 2023.

2) Big Bell Deeps which is also scheduled to start in the first half of FY 2025. I am not sure what the increase in output will be exactly. The ASX announcement dated 28th November says grade will increase by 20% i.e. from 2.5g/t to 3g/t so I would expect an increase in output by about 15,000 to 20,000 ounces per annum. The other key point about Big Bell is that it has a mine life of 16 years averaging 93,000 ounces per annum before further extensions. This alone should rerate WGX compared to many of its peers who are lucky to have 5 years of reserves.

3) Bluebird - The CEO said in a recent interview that bluebird tonnage could lift by 200,000 tons of ore from 550,000 to 750,000. Expect an announcement on this in the New Year but if this occurs output should lift by another 25,000 ounces per annum.

4) Starlight grade and tonnage has lifted in the last quarter. See December 5 announcement. While it is yet to be quantified, the increase in grade could see a lift in output by another 5,000 to 10,000 ounces if the grade can be sustained.

5) Fender restart. See page 24 quarterly report 25/10/2023. At steady state, the ore will displace lower grade stockpile feed at approximately 330ktpa @ 2.7g/t. First ore from Fender is expected in October 2023. While I suspect Fender has already been included in the 245-265,000 ounce forecast production for this year, it should drive an increase in quarterly production for the rest of the year by maybe 3,000 ounces per quarter above the first quarter ensuring that quarterly production is closer to 70,000 ounces for the remainder of this financial year.

At the very least there is at least 60,000 ounces of growth locked in from the first two developments, plus another 30,000 ounces from 3 and 4 if those targets can be met.

On top of this is exciting exploration growth prospects. As per Page 6 of the August 2 2023 capex and exploration announcement, exploration targets include:



On a more detailed level there are number exploration targets at Great Fingall alone as per the 23 October 2023 announcement. It would be good to see the resources of all these old pits outlined in the annual reserves and resource statements just to see what how much exploration potential WGX has.


By the end of FY 2025 WGX should be producing over 300,000 ounces per annum. At current prices this equates to a margin of around $1,200 per ounce. This would see operating cashflow approaching $400 million and free cashflow, assuming capex and exploration of $140 million of around $260 million per annum or 55 cents per share. This puts WGX on an EV/cashflow basis of 3 which is incredibly cheap for a company that has a mine life of at least 8 years ignoring resource conversion of 6 million ounces excluding reserves.

The company has a policy of paying out 30% of free cashflow as dividends. So, a dividend in the not-too-distant future of around 20 cents is not out of the question.

There are also a couple of tiddlers in the neighborhood that may be worth acquiring if the price is right and WGX shareholders aren't diluted in any acquisition as the current share price is way too low.

Finally, WGX is knocking on the door of entering the ASX 200. If they meet their targets this should happen in the next twelve months see another rerate of the share price.

For me this is the pick of the ASX mid-tier goldies for 2024 subject to operational targets being met.

Good luck in 2024.

GLTA/IMHO