Higginsville Processing Capacity to Jump 62.5%, Adding 60,000oz Gold Annually
Westgold Resources has approved a $145 million expansion of its Higginsville Processing Hub, increasing capacity by 62.5% and aiming to lift Southern Goldfields production by 60,000 ounces annually while cutting processing costs by nearly a quarter.
- Board approves $145M Final Investment Decision for Higginsville expansion
- Processing capacity to increase from 1.6Mtpa to 2.6Mtpa, with future-proofing for 4Mtpa
- Annual gold production uplift of approximately 60,000 ounces expected from mid FY28
- Processing costs to fall 24% to $34 per tonne, enhancing margins
- Strong financial metrics: $1.4B pre-tax NPV and 43% IRR at $4,905/oz gold price
Strategic Expansion Approved
Westgold Resources Limited has taken a decisive step to expand its Higginsville Processing Hub (HXP) in Western Australia’s Southern Goldfields, with the Board approving a $145 million Final Investment Decision. This expansion will increase the plant’s processing capacity from 1.6 million tonnes per annum (Mtpa) to a nominal 2.6Mtpa, representing a 62.5% uplift. The move aligns with Westgold’s broader strategy to enhance cash flow by boosting production and reducing operating costs.
Production and Cost Benefits
The Definitive Feasibility Study (DFS) underpinning the project confirms a compelling financial case. The expansion is expected to increase annual gold production from the Southern Goldfields by around 60,000 ounces, lifting total output to approximately 160,000 ounces per annum. Simultaneously, processing costs are forecast to drop by 24%, from about $45 per tonne to $34 per tonne, thanks to economies of scale and upgraded processing infrastructure.
These improvements translate into a robust pre-tax net present value (NPV) of $1.4 billion at a conservative gold price of $4,905 per ounce, with an internal rate of return (IRR) of 43%. At current spot gold prices near $7,300 per ounce, the NPV more than doubles to $2.7 billion, and the IRR soars to 140%, highlighting significant upside potential.
Infrastructure and Future Growth
The expansion includes installation of a new primary jaw crusher, a 5.8MW semi-autogenous grinding (SAG) mill, a pebble crusher, and additional leaching and adsorption tanks. Importantly, the design incorporates future-proofing measures to support a potential further increase in capacity to 4Mtpa, ensuring the plant can accommodate growth from promising deposits such as the Fletcher and Mason Zones at Beta Hunt.
Westgold’s Managing Director and CEO Wayne Bramwell emphasised the strategic nature of the project, noting that the timing aligns with anticipated increases in mining rates from the Southern Goldfields. The expanded processing capacity is expected to be operational by mid fiscal year 2028, ready to handle increased ore delivery and drive down unit costs.
High Confidence Backing
The DFS is based on approximately 83% Measured and Indicated Mineral Resources, underscoring the high confidence in the project’s technical and economic viability. Notably, the study excludes potential benefits from exploration success and plant debottlenecking, which could further enhance project economics. The capital cost estimate includes $16.5 million in Owner’s Costs, covering project management and commissioning, reflecting a comprehensive and disciplined approach to execution.
Execution and Outlook
With the Final Investment Decision approved, Westgold is prioritising procurement of long-lead items and progressing engineering, procurement, and construction (EPC) tendering. Construction is scheduled to commence in early fiscal 2027, with practical completion and handover targeted for mid fiscal 2028. The modular nature of the new equipment is expected to minimise production disruptions during the build.
Looking ahead, Westgold continues to advance exploration at the Fletcher Zone, where a maiden 2.3 million ounce Mineral Resource has been defined. The company’s ability to scale the Higginsville plant to 4Mtpa positions it well to capitalise on future growth opportunities as geological and technical data mature.
Bottom Line?
Westgold’s Higginsville expansion marks a pivotal move to cement its position as a low-cost, high-output gold producer, with the potential for further growth hinging on exploration success and operational execution.
Questions in the middle?
- How will exploration results from the Fletcher and Mason Zones influence future expansion plans?
- What are the key risks and contingencies in the EPC contract tendering and construction phases?
- Could plant debottlenecking or other operational improvements further enhance processing capacity or cost savings?
