How Will Western Gold Resources Fast-Track Gold Duke Production?
Western Gold Resources has signed a binding toll milling agreement with Wiluna Mining Corporation, fast-tracking production at its Gold Duke Project. With full mining approvals and a preferred contractor in place, the company is poised to capitalise on soaring gold prices.
- 24-month toll milling agreement with Wiluna Mining Corporation
- Full mining approvals secured for four open pits at Gold Duke
- Preferred mining contractor SSH Group selected with deferred payment facility
- Updated Scoping Study reflecting gold prices above A$5,100/oz expected next month
- Brownfields exploration targets offer potential mine life extensions
A Milestone Agreement
Western Gold Resources Limited (ASX, WGR) has taken a significant step towards becoming a gold producer by signing a binding toll milling agreement with Wiluna Mining Corporation Limited. This 24-month contract, effective from 13 June 2025, secures processing capacity at Wiluna’s fully operational processing plant, located just 46 kilometres from the Gold Duke Project. The proximity and existing haulage route make this an efficient and cost-effective solution for ore processing.
Unlocking Production Potential
The Gold Duke Project, wholly owned by WGR, benefits from shallow, free-milling ore deposits that lend themselves to rapid and low-cost open-pit mining. With all four Stage 1 open pits; Eagle, Emu, Gold King, and Golden Monarch; fully approved for mining, the company is well positioned to commence near-term gold production. The toll milling agreement ensures that the entire Stage 1 production target can be processed without capacity constraints, while also allowing room for potential Stage 2 expansions.
Financial Upside Amid Rising Gold Prices
WGR’s existing Scoping Study, based on a conservative gold price of A$3,500 per ounce, reported an exceptional internal rate of return (IRR) of 617% and an estimated undiscounted cash surplus of A$38.1 million. With current gold prices exceeding A$5,100 per ounce, the company is updating this study to reflect the improved market conditions. The revised results, expected next month, are anticipated to further enhance the project’s financial outlook and investor appeal.
Operational Readiness and Strategic Partnerships
Western Gold Resources has selected SSH Group Limited (ASX, SSH) as its preferred mining contractor. SSH brings extensive experience and has offered a deferred payment facility, easing upfront capital requirements and supporting WGR’s cash flow during the early mining stages. While the Master Services Agreement remains subject to final investment decision and contract execution, the recent toll milling agreement milestone strengthens the path to formalising this partnership.
Exploration and Growth Prospects
Beyond Stage 1, WGR is actively advancing exploration at several brownfields targets within the Gold Duke Project, including Joyners Find and Bottom Camp. These targets hold inferred resources that could extend the mine life and improve operational flexibility. Most of these areas lie within approved disturbance zones, facilitating quicker development if results prove promising.
Looking Ahead
With all key approvals in place, a clear processing solution secured, and a preferred contractor lined up, Western Gold Resources is on track to transition from explorer to producer. The upcoming updated Scoping Study and ongoing exploration results will be critical in shaping the project’s next phase and its appeal to investors seeking exposure to the gold sector amid a bullish price environment.
Bottom Line?
Western Gold Resources is poised to turn its Gold Duke Project into a profitable gold producer, but the market will be watching closely for the updated study and contract finalisations.
Questions in the middle?
- How will the updated Scoping Study impact the project’s valuation and investment appeal?
- When will the Master Services Agreement with SSH Group be finalised and what are its key terms?
- What are the prospects and timelines for advancing Stage 2 brownfields targets to extend mine life?
