Westgold Commits to Cue Hub Expansion to 1.7Mtpa

Westgold (ASX:WGX) Resources announced its commitment to the Cue Expansion Plan, which it describes as a capital-light expansion of its Cue processing hub in Western Australia from a current run rate of 1.4Mtpa to 1.7Mtpa in FY28, an increase of approximately 21% in processing capacity. The plan involves debottlenecking the existing circuit, with study work indicating that increasing mill motor power from 2.9MW to 4.2MW through a replacement liquid-cooled motor and variable speed drive, together with associated system and pumping upgrades, will support operation at the higher duty. The upgrade is designed to increase milling circuit throughput from a nominal 170 t/h to 200 t/h and is scheduled to be complete in late FY27, with the higher installed capacity supporting an increase of approximately 15kozpa from the Cue hub from FY28 onwards. Westgold said the plan is underpinned by increasing underground mine outputs from its Big Bell and Great Fingall mines near Cue, and that it will now progress detailed engineering, procurement planning and execution sequencing while continuing brownfields drilling at Big Bell South and Cuddingwarra.

Scoping study outputs cited by the company include indicative capital of $22 million, described elsewhere in the release as the upper range, a payback period of 10 months, life-of-mine gold production of 1.1-1.3 Moz at an all-in sustaining cost range of $2,916-$3,564 per ounce, and an improvement in the NPV of Cue of approximately $400 million at a gold price of $5,500 per ounce. On a mid-point basis the study indicates average annual gold production of approximately 122koz, total production of 1.2 Moz over 10 years, life-of-mine AISC of approximately $3,240 per ounce and an NPV of approximately $1.1 billion at $5,500 per ounce. Westgold stated that the scoping study is based on low-level technical and economic assessments, that capital estimates carry an accuracy of plus or minus 35%, that the study is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, and that it should not be interpreted as a final investment decision or an Ore Reserve statement. The production target is predominantly sourced from Ore Reserves and Inferred Mineral Resources, with a minor portion during FY32-FY33 sourced from the Big Bell South Exploration Target, which the company said is conceptual in nature and for which there has been insufficient exploration to estimate a Mineral Resource. The company said funding in the order of $22 million will likely be required, noting it held $939 million of cash, bullion and liquid investments at 30 June 2026 and had executed a commitment letter with existing lenders to increase its syndicated facility to $600 million, undrawn at the date of the announcement.