Westgold sets course for 500koz with Fletcher upside still in reserve

Westgold targets 500koz without counting Fletcher

Westgold Resources Limited (ASX:WGX, TSX:WGX) has set out a three-year production plan that reaches 460-510koz of gold in FY29, up from FY27 guidance of 385-425koz. The company expects the increase to come from expanded Murchison processing, higher mine output and better use of existing infrastructure, with AISC forecast to fall from A$2,980-A$3,380/oz in FY27 to A$2,640-A$3,000/oz by FY29 on a FY27 real-cost basis.

The more intriguing part of the announcement sits outside those numbers. Westgold has deliberately left the Fletcher Zone at Beta Hunt out of both the production forecast and associated capital budget, even though internal conceptual studies indicate it could add about 140kozpa and provide a pathway to more than 600kozpa across the group. That is upside, not guidance: the company explicitly says it does not yet have reasonable grounds to treat the aspiration as achievable.

Murchison investment drives the formal outlook

FY27 is the peak investment year, with $450M-$480M of growth capital directed towards accelerated underground development, open pits, mining inventories and brownfield processing expansions. Westgold also plans to spend $50M-$75M on exploration and resource definition during the year, with more than $150M earmarked across the three-year period.

The Cue Expansion Project is expected to lift capacity from 1.4Mtpa to 1.7Mtpa in late FY27, while the Meekatharra Expansion Project is scheduled to increase throughput from 1.8Mtpa to 2.9Mtpa by mid-FY28. Together, those projects are intended to lift group installed processing capacity from approximately 5.8Mtpa in FY27 to 7.2Mtpa in FY29. The plan relies on higher output from Bluebird-South Junction, Great Fingall, Big Bell and the Murchison Open Pit Program, reducing reliance on lower-grade stockpiles and long-distance haulage.

Deferred Higginsville expansion changes Southern Goldfields strategy

Westgold has deferred the Higginsville Expansion Project while it assesses a larger development solution around Fletcher. The company says Fletcher now has a maiden Ore Reserve of 13.5Mt at 2.6g/t for 1.1Moz and an updated Mineral Resource of 40.1Mt at 2.3g/t for 3.0Moz. Drilling has tested only about half of the currently defined strike extent, according to the announcement.

Studies are considering a potential 4Mtpa processing solution, alternative haulage arrangements and a processing facility closer to Beta Hunt. Spargos, about 30km from Beta Hunt compared with roughly 80km to Higginsville, is one option under review. Westgold's preliminary internal analysis suggests a Spargos plant could reduce haulage costs by about $10/t, equivalent to an annualised saving of $40M, but the company has not selected a preferred development pathway.

Production growth carries execution and resource risk

The outlook is presented as predominantly reserve-backed, but the mix becomes less conservative later in the period. Westgold says the FY27 production target comprises approximately 86% Ore Reserves, 2% Measured and Indicated Resources, 7% Inferred Resources and 5% third-party material. By FY29, the composition is 74% Ore Reserves, 18% Inferred Resources and 8% third-party material.

That does not invalidate the plan, but it puts greater weight on drilling, mine development, processing expansions and operating delivery as the forecast advances. The company says annual non-sustaining capital should decline from FY27 through FY29 as the major projects progress, while the current schedule also depends on developments such as Polar Star, Big Bell Deeps and higher Great Fingall output. Those milestones will determine whether the promised combination of rising ounces and falling unit costs moves from modelled plan to operating result.