Westgold Resources Limited (WGX) Earnings Call Transcript & Summary

Welcome to today's webinar. I'll now hand you over to Wayne.

Welcome, and thank you for joining Westgold's June 2026 Quarterly Results Call. Today, Aaron Rankine, our Chief Operating Officer; Tommy Heng, our Chief Financial Officer; and Kasun Liyanaarachchi, our Group Manager of Investor Relations and Communications, joins me on the call. We will review today's quarterly report and presentation before opening up for your questions. I'll start with safety, which remains our priority. In Q4, we reported no lost time injuries. We also saw continued improvement across key lead and lag safety indicators. This result is supported by sustained frontline engagement, critical control verification and leadership field presence and reflects our ongoing focus on fatality prevention, critical risk management and injury reduction across the group. To our business performance, FY '26 was a defining year for Westgold. We exceeded production guidance at 387,000 ounces delivered costs within guidance with an all-in sustaining cost of $2,841 per ounce. Critically, we increased treasury to $939 million. In Q4 alone, we produced just shy of 100,000 ounces and generated $233 million underlying cash. Our strategy is delivering what we designed it to stronger production, driving stronger cash generation. These 2 factors combined enable stronger returns to our shareholders. We hit our targets in FY '26. And we exceeded the top end of production guidance and delivered all-in sustaining costs within our guided range. We continue to advance our growth projects. Bluebird South junction and Great Fingall developments are progressing and the Murchison Open Pit program commenced early. We are investing pragmatically in projects and infrastructure required to support future production growth. These investments are reflected in our capital. However, they are designed to bring value forward and underpin the next stages of our current 3-year outlook. We look forward to sharing our FY '27 guidance and updated 3-year outlook next month. With that, I'll hand over to Aaron to speak to our operational results.

Thank you, Wayne, and good morning all. Our operational performance continued to build in Q4, delivering circa 99,000 ounces and importantly, we are well positioned for a strong FY '27. Our multi-hub operational structure remains a key advantage, absorbing normal operational variability at the asset level but delivering consistent group performance. We have built inherent flexibility in our business and a down day at one asset can be picked up elsewhere across the group. The Murchison delivered stronger output with record mining rates at Bluebird South Junction, which hit a 1 million tonne per annum exit rate. Along with record mining rates at Big Bell, Fortnum produced its highest full year production in ounces ever. Excluding the toll treatment at Lakewood, which was not scheduled for Q4, production in the Southern Gold Fields was steady. Overall, higher production drove lower unit costs and delivered strong operating margin. We remain focused on our strategy, simply put, we are safely increasing mining and processing productivity with improving head grades, fully optimizing our core operations to deliver more gold and create value. Mine production increased materially in Q4. The continued expansion of Bluebird South Junction, completion of vent upgrades at Big Bell, the operational improvement efforts across the business being driven by our site teams all contributed to increasing mine outputs. With these increased mining rates, our stockpiles continued to grow, improving the risk profile of the business. Beta Hunt achieved its strongest mining rate of FY '26 despite ventilation constraints, which remain manageable and are being addressed through an independent alternative solution, which is already underway. Importantly, our mills remain fully utilized with high-grade feeds from our core mines. Across the hubs, Meekatharra, Cue and Fortnum all performed strongly, helping deliver record annual production in the Murchison. The Higginsville mill delivered steady gold production on increased throughput delivered from ongoing optimization works. The lower quarter-on-quarter gold production at Southern Goldfields reflected the fact that we did not process a parcel at Lakewood in Q4 as we did in Q3. Tolling resumes this quarter. In summary, we enter FY '27 in a position of strength. After delivering a shade below 100,000 ounces for Q4, we are carrying momentum into FY '27. With that, I'll hand over to Tommy to speak to our financials. Tommy?

Thank you, Aaron, and good morning, everyone. This slide highlights the strength of Westgold's operational cash generation. We sold more than 110,000 ounces during the quarter at a realized gold price of $6,391 an ounce, with the higher production and healthy margins delivering lower unit cost. In Q4, our operations generated $159 million in net mine cash flows. It is worth noting that this strong performance is net of the capital investments associated with bringing forward a number of our key growth projects as Wayne touched on. The quarter saw us add $83 million in cash, bullion and liquid investments, increasing Westgold's treasury to $939 million at year-end. Together with our $600 million credit facility, which remains undrawn, we have $1.5 billion of available liquidity to fund our organic growth plan. Q4 delivered an underlying cash build of $233 million before on market share buybacks, growth expenditure, exploration and proceeds from asset divestments we invested $142 million in nonsustaining capital and $11 million in exploration while continuing to strengthen the balance sheet. This level of cash generation enables us to fund growth internally and maintain shareholder returns. Before handing back to Wayne, I would highlight that Westgold is in its best financial position yet, debt-free, fully unhedged and with a very healthy treasury. Our treasury strength provides flexibility to investment growth, progress asset optimization projects and continue returning capital to shareholders. In FY '26, we bought back to the value of 27 million in shares and we look forward to providing a dividend update next month. I'll hand back to Wayne to cover off on some of our exploration and corporate highlights.

Thank you, Tommy. I love the story. This picture tells exploration remains central to our long-term growth strategy. While FY '26 exploration spend finished just below guidance due to modest timing and access constraints. Investment will continue in FY '27. We will keep drilling. Our current drilling focus is on resource growth and reserve conversion across our core assets, particularly Beta Hunt where we are doing the work to define a maiden reserve for the emerging Fletcher zone and another of our key growth assets, Bluebird South Junction. You will see the results of this effort in our next group reserves and resources update likely in September. This disciplined focus on optimizing our core assets is further supported through a campaign to divest some of our smaller nonproducing assets that didn't feature in our 3- to 5-year plan. In Q3, we demerged and listed Valiant. And in Q4, we completed our noncore asset divestment program. Peak Hill and Chalice were sold, simplifying the portfolio while sharpening our focus on core operating hubs. Together, with previous transactions in this campaign, these sales have brought forward almost $200 million in value for Westgold shareholders. And importantly, retained exposure to the upside of these projects through material equity stakes and other mechanisms, focus on optimizing a streamlined portfolio of core assets supports disciplined capital allocation. We're investing wisely and selectively in our bigger mines, and bigger mines need bigger mills and bigger mills drive stronger economics. In the Southern Gold Fields, the HXP tender process is in train and orders have been placed to secure long lead items. In the Murchison, we have 2 studies that are nearing completion; one at Cue, a low capital option to increase milling capacity with the potential for a very short payback period, and a growing case for a larger mill at Meekatharra on the back of both the emerging Polar Star load within Bluebird South Junction as well as drilling at a near-mill open pit project called Aladdin. We look forward to sharing these studies as they are finalized. In closing, Westgold enters FY '27 in a position of strength. In FY '26, we exceeded production guidance, met cost guidance, substantially strengthened the balance sheet and expedited disciplined investment in future growth. With 4 operating hubs, long-life cornerstone assets now ramping up and significant financial flexibility to implement our 3-year outlook Westgold is in its best position yet to create shareholder value. Thank you for your time and for your interest in Westgold. I'm happy to take your questions, and we'll hand over to our Group Investor Relations Manager, Kasun Liyanaarachchi, to open up the floor.

Thank you, Wayne, and thank you, ladies and gentlemen, for joining us on the call today. If you haven't already, I invite you to submit any questions you may have via the chat function.

Thank you, Kasun. I'll start to take the questions. First question from Kevin. Kevin's question is, will Big Bell mining rates achieved this quarter continue or increase following the ventilation upgrades. I'll pass this question to Aaron.

Thank you, Wayne. Yes, look, following the ventilation upgrades at Big Bell, we do expect to see these lifted run rates continue.

Thank you, Aaron. Another one from Adam Baker. Adam asks, what can we expect for OPA material in FY '27. I'll defer that question to Tommy.