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Westgold Resources (ASX:WGX) - Executive Chairman, Peter Cook - The Market Herald
Executive Chairman, Peter Cook
Source: CEO Magazine
  • Westgold Resources (ASX:WGX) has ended Q1 FY21 with solid gold production and sales but flagged ongoing concerns about WA's COVID-19 hard border
  • The group's gold production and gold sales were both within guidance over the September quarter, at 60,797 ounces (oz) and 60,030 oz respectively
  • The company's cash cost of sales beat guidance expectations at $1,202/oz, as did its all-in sustaining costs (AISC) at $1,459/oz
  • Westgold said its gold operations continued as planned, but COVID-19 related border restriction impacted staff travel arrangement
  • The impact was limited to its Bluebird underground mine and didn't impact the group's ore processing and wider output
  • Shares in WGX ended the day

West Australian gold miner Westgold Resources (WGX) has ended Q1 FY21 with solid gold sales and production levels but flagged ongoing concerns about WA's COVID-19 hard border.

WA has remain cut-off from the rest of Australia since late March when the coronavirus pandemic first began hitting the state, and the tough border restrictions are likely to remain in place until April 2021.

In its opening to statement to shareholders in today's quarterly report, Westgold said the effects of the pandemic "were largely associated with restricted travel arrangements for staff."

But, the company said the impact of the COVID-19 border closures were primarily limited to its Bluebird underground mine and didn't impact the group's ore processing and wider output.

In total, the group's gold production and gold sales from its Fortnum, Cue and Meekatharra operations were within guidance at 60,797 oz and 60,030oz respectively.

Pleasingly, Westgold also reports its cash cost of sales also beat guidance expectations at $1,202/oz, as did its all-in sustaining costs (AISC) at $1,459/oz.

The company reported its revenue from achieved sales was $145 million, with the mine's operating cash flow totalling $59 million for the quarter.

At the end of Q1 FY21, the company said it had over $145 million worth of cash in the bank and no debt after WGX repaid its gold pre-pay debt in full.

Looking ahead, the company admitted its group’s hedge book reduced to 186,000 oz at A$2,083/oz and remains at almost 7.5 per cent of ore reserves.

However, the company said it expects production to increase in the future as its Big Bell, Triton and Bluebird mines come on-line.

WGX has reaffirmed its guidance for the rest of FY21, with 65,000 oz to 72,500 oz of output expected with a cash cost of sale of $1,240/oz to $1,300/oz and an AISC of $1,500 - $1,570/oz in Q2.

Westgold also expects a total output over the 2021 financial year of 270,000 oz to 300,000 oz at an AISC of $1,460/oz to $1,560/oz.

Following today's quarterly update, shares in Westgold Resources have ended the week up a slight 0.76 per cent, at $2.64 per share.


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