Interesting that out of all the mid-tiers listed on the ASX (with annual production of over 200koz), Westgold is by far the most unloved of them all. They are producing 280-300koz out of 3 mine projects (Central Murchison, Higginsville and Fortnum), with reserves of 3.4Moz and over 15Moz of resources. The Big Bell mine will also be producing later this year, with a potential of bringing annual production approaching 400koz. The market capitalisation at current price is around $650m, compared to others such as Resolute Mining ($~850m), St Barbara ($2.3b), Regis Resources ($2.4b) and Perseus Mining ($450m). All the producing mines are based in Australia, which is considered a low sovereign risk nation.
The company has had some terrible quarters where the aggregate AISC is well above $1 500/oz and they have been burning cash on development. The predicament is worse than RSG in that sense, since RSG has demonstrated lower AISC in the past three years, and only saw the AISC rise and cash burn due to their developing of the Syama underground operations. With Westgold, the capex in mine development is also noted.
I sold out of my WGX stocks late last year and instead bought more of its options at around 31-35c. The options are now quite underwater, almost drowned. However, I think these out-of-the-money options being due to expire in end of June 2019, could have good profiting potential in the coming year when their operations get back on track.
Anyway, in a while, I will provide a more comprehensive analysis report on Westgold, similar to one I have done with Resolute Mining last Friday. Hopefully we have more interest on this stock and posts on the forum.
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