Morning, ladies and gentlemen, and welcome to the Westgold Resources full year results conference call. Your speakers for today are Wayne Bramwell, Managing Director, and Tommy Heng, Chief Financial Officer. I'll now hand over to Wayne to commence the call.
Thank you very much, Shane. Straight to slide five. FY 24, year in review. What a year it has been for Westgold! The transformation of the business continued, and we have returned the business to meaningful profitability through the delivery of safe and profitable ounces. The graph on the left depicts just how far we've come in what is a very short space of time. AUD 9 million profit this year is a fantastic achievement and testament to the efforts of our teams. Key to this, of course, has been our focus on safety, which has seen continued improvement. The improvement in our safety culture has come hand in hand with changes to our organizational culture more broadly, a culture which is now more focused on operational excellence, profitability, and shareholder returns. Of course, this remains work in progress and there's much more to achieve.
We achieved our revised production and cost in FY 2024, numbers which were adjusted following the decision to pause mining at Paddy's Flat, which was assessed to be missing the profitability hurdles Westgold require. Westgold became fully unhedged at the end of FY 2024, with the completion of our zero cost collar program. We remain debt-free with our AUD 100 million corporate facility yet to be drawn. Shareholder returns is something this company takes very seriously, and in 2024, we were pleased to declare a total of AUD 0.0225 per share in dividends. We completed our merger with Karora at the end of FY 2024. FY 2025 sees the business now capable of plus 400,000 ounces of production from an all Australian production base.
Westgold 3.0, as we call it internally, is now unhedged and has two strategic footprints in some of Western Australia's most productive goldfields. Slide 6. Safety and sustainability delivers results. It's hard to overlook the vast improvement Westgold has delivered in the safety space. All the improvements we've delivered from a financial perspective couldn't have been possible before first tackling the cultural shift towards safety. Our TRIFR has fallen from 22 to 6.9 at the end of the financial year, through conscious overhaul of systems and practices across our offices and operations. To deliver an 18% reduction against our FY 2023 numbers is a fantastic outcome, though it is one we do not take for granted. There is still much work to be done here.
In regard to sustainability, during FY 2024, we completed our clean energy transition project, which has seen the construction of 82 MW of hybrid power across our operations. All our mines and mills are now operating on hybrid power in the Murchison. We are reducing our diesel consumption, carbon emissions, and importantly, our costs. Slide seven, top end of adjusted FY 2024 production guidance. In FY 2024, we produced 227,000 ounces of gold at an all-in sustaining cost of just over AUD 2,000 an ounce, allowing us to achieve the top end of our adjusted production guidance and lower end of our cost guidance. The prudent decision to pause the underperforming Paddy's Flat Mine inevitably put some pressure on our original guidance, set in August 2023, and negatively impacted year-on-year comparisons.
That said, it was the right business decision and demonstrates our resolve to prioritize cash flow and profitability over production. We invested AUD 157 million in growth capital over the full financial year. The focus was the Great Fingall development, the Big Bell expansion, and most importantly, the expansion of Bluebird South Junction at Meekatharra. Tommy will break this down further by discussing the year-on-year movement. Finally, we invested AUD 25 million in exploration during the year. Exploration builds mine life and is the platform for building a long-term, sustainable business. With that, hand over to Tommy to talk through the details of the results.
Slide eight. Thank you, Wayne, and hello to everyone on the call today. This slide talks to our high-level financial metrics. I'm proud to deliver these outstanding financial results for FY 24. We increased our revenue year- on- year, and that's despite the lower production as we paused Paddy's Flat. Revenues no doubt benefit from the increased spot price and increased exposure to it, which I'll address in more detail shortly. In FY 24, our EBITDA and NPAT materially improved year- on- year, mainly as a result of increased margins. Free cash flow, as defined by operating cash inflows, less investing cash outflows benefited from spot price exposure, offset by higher investing expenditure in FY 24. Finally, we improved our balance sheet position with our net assets and cash full in and liquid positions increasing considerably year on year. Slide nine.
One of the key drivers of this year improvement has been the large increase in revenue. There is no question that the elevated gold prices delivered all gold producers revenue windfalls. Westgold has worked over the past two years to capitalize on this by eliminating its forward sales contracts. The graph on this slide demonstrates the proportion of revenue attributed to the fixed forward sales, denoted by the yellow box, sold at a price different to spot. In FY 2022 and FY 2023, half our gold sales were sold at spot.... In contrast, in FY 2024, more than 90% of our gold sales were sold at spot price, allowing us to make the most of the elevated gold price and grow our revenue despite the lower year-on-year production.
Westgold is now fully leveraged to the gold price, having completed both our fixed forward sales contracts and zero cost collars before the start of the new financial year. Slide 10. Coinciding with our increased revenue, FY 2024 saw reductions in the total all-in sustaining costs, thus helping to increase AISC margin year on year. Total AISC reduced by 4% to AUD 95 million. Key points to note here are the lower total all-in sustaining costs in lower mining activity, with the suspension of Paddy's Flat and reduced mine development at the Big Bell Sub-Level Cave that was completed in FY 2023. Increased mine development in growth projects, reducing the amount of mine development in existing mines. In Q2 FY 2024, Westgold launched a new remuneration and benefits strategy program, which has delivered over 40% improvement in our staff turnover.
These costs, to the tune of AUD 10 million, are spread between mining, processing, admin, and corporate costs here. Increased sustaining capital at our existing mine, setting up these assets for continued profitable operations. Slide eleven. So increased revenues and reduced total costs ultimately led to increased margins and gross profit. That's easily seen in the profit waterfall, comparing FY 2023 with FY 2024, where we delivered an NPAT of AUD 95 million in FY 2024. We had increased corporate costs as we invested in our workforce via our upgraded remuneration and benefits strategy. Of course, when you make substantial profits, you end up having to pay substantial tax to the tune of AUD 38 million in our case. That resulted in Westgold delivering an 852% increase in NPAT year on year. Slide twelve.
In FY 2024, Westgold found a balance between maintaining balance sheet strength, investment in our near-term growth options, and delivering shareholder returns. We invested AUD 157 million in our array of near-term, high-value projects, the result of which we saw commercial production from Fender from 1 July 2024. In FY 2025, our organic growth pipeline will see early production from an expanded Bluebird South Junction mine, first ore from Great Fingall and from the Long Hole open stope mine at Big Bell. Continued investments in the Southern Goldfields assets will unlock substantial value in H2 of FY 2025 in what is a strategically located yet vastly underexplored goldfield. With this investment, the stage will be set for a very different Westgold, one with a substantially different production profile and cash-generating potential. Slide 13.
Notwithstanding the substantial investment made this year on our growth projects, Westgold still generated AUD 71 million in cash, bullion, and liquidity built. We have now achieved this across six consecutive quarters. Slide 14. The graph shows our cash flows for the year and depicts our closing cash, bullion, and liquidity grew by AUD 71 million year- on- year. Our revenue increased due to the spot price exposure movement, with fewer hedged ounces partially offset by reduced production, while operating costs reduced year- on- year, as discussed. Overall, our operating cash for the year was AUD 210 million, as defined by revenue, less operating cash costs, less sustaining capital. As we spoke earlier on, FY 2024 was a growth capital-intensive year and reflected in the growth capital and PPE segments of the graph.
Our investment in exploration continued over the year, aimed at extending mine lives in our existing operations. We have already demonstrated some of the fruits of that investment, with increases to reserve and resources at Bluebird South Junction and resources at Starlight. In September, we expected to release a group reserves and resource statement, in which we will be able to articulate the full gamut of benefits this investment has delivered to date. Working capital movements reflect timing of payments, which is not unusual for the size of our cost base and the investment made this year. During the year, we invested AUD 6 million in Ora Gold. This is reflected in the payment for financial assets segment. Finally, we paid out AUD 5 million in dividends, which represents the cash payment of the AUD 0.01 per share interim dividend we declared in February 2024 .
With all that, we finished the year with AUD 263 million of closing cash, bullion, and liquid assets. The last point I'd like to make on this slide is that we remain debt-free. Slide 15. And speaking of dividends, this slide goes into more detail. Westgold declared AUD 0.0225 per share of dividend for the full financial year, resulting in a 12% free cash flow dividend payout ratio. Striking what we believe is a good balance between shareholder returns, reinvestment of our strong growth pipeline, and balance sheet strength. In February 2024 , we declared a AUD 0.01 per share interim dividend, which was paid within the financial year. In July twenty twenty-four, this year, we announced the fully franked dividend of AUD 0.0125 per share final dividend, which will be paid in October twenty twenty-four.
These payments fall in line with Westgold's dividend policy, which seeks to pay AUD 0.01 per share as a minimum, up to a maximum free cash flow payout ratio of 30%, subject to maintaining a minimum cash balance of AUD 100 million and at full board discretion. Slide 16. Last slide for me before I hand back to Wayne. Like I said, I'm really pleased with these results. Revenue is up. What a time to be an unhedged gold producer. We are maintaining our focus on margin and cost, helping us to achieve a good EBITDA, strong profit numbers for the group, a result of delivering on our strategy, which prioritizes safe and profitable ounces over production at any cost. The graphs at the bottom here show the history of these metrics over the last four years.
I think it demonstrates Westgold is in a strong position with a solid platform. With that, I'll hand it back to Wayne to talk more about that.
Slide 17: Westgold's FY 25 platform. Thanks, Tommy. What a platform we have to build from now. On the first of August, we completed our merger with Karora, giving Westgold now two strategic footprints in some of the most prolific gold regions in Western Australia. We are now a top five gold producer in Australia, with a pro forma production profile in excess of 400,000 ounces per annum. In closing, we are really excited about the future ahead for Westgold. We now have 3,200 sq km of Western Australia, five processing plants, six underground mines operating, a seventh in development, and over 1,900 staff. This is a platform which we can now leverage. We're looking forward to continuing to deliver safe and profitable ounces for our shareholders and much higher returns into the future.
With that, I'll throw the floor open to questions from the audience.
Thanks very much, Wayne. We'll just pause for a moment to let people put questions in. If you'd like to use the question function in the Q&A software, sorry, in the webinar software, it's the little chat symbol with the question mark. I'll start with our first question. Our first question comes from Andrew, and it says, "Can you please remind us of the announcement disclosure schedule that will lead into FY 25 guidance? When will FY 25 guidance be?
Thanks, Andrew. The schedule ahead is quite simple. We'll be going with our updated reserve and resource statement early in September, shortly followed by the FY 2025 guidance. One really feeds into the other.
Thanks, Wayne. Your next question comes from Mark, and he is asking a question about trade payables. He's noticed an increase from AUD 78 million - AUD 148 million. Tommy, would you like to comment at all on trade payables and the reason for the increase?
Absolutely. Thanks, Shane, and thanks, Mark, for the question. Essentially, as you see in FY 2024, it has been a heavy investment year on our growth projects in Great Fingall, Fender, and the Big Bell long hole open stope. Naturally, the capex and payments will increase as a result of that investment.
Thanks, Tommy. I'll just pause for any questions. I've got a question from Hayden: Can you provide some updates on key management changes and timing on new appointments?
Certainly, Shane, thank you very much. Hayden, most recent changes to the executive team here has been the appointment of Andrew McDougall as Chief Technical Officer. As we start to step up our execution of our mines and our footprint now is much larger with the Southern Goldfields assets coming in, we need to expand the executive team. So Andrew's been with us now for just over four months, and he's been a key member joining the team.
Thanks, Wayne. We have a few multi-part questions. I'll start with the first question. On the Murchison, which underground mines, if any, might return to production in FY 25?
Thanks for that question, Kathleen. We've currently got Comet on care and maintenance, South Emu Triton on care and maintenance, and Paddy's Flat. Of those three, the most likely to return to production is probably South Emu Triton, which is being reworked as we speak.
How big will Bluebird South Junction get production-wise?
Fantastic question. Bluebird South Junction is targeting a 1.2 million ton per annum run rate by the end of this year. But the real answer to the question is, we don't know. We keep drilling this thing. We haven't found the edges of it. The potential scale is much larger than the 1.2 run rate that it'll hit by the end of this calendar year.
When can we expect first ore from Great Fingall?
Great Fingall is really exciting. Again, first stope planned for Q4 of this financial year.
Moving to the Southern Goldfields, just how big could Beta Hunt get?
We are so excited about Beta Hunt, and at this stage, we don't know. Its next stop in terms of production is two million tons per annum, but again, two point five won't be too far away. The drilling that we're planning could see the scale of this mine expand significantly, and it's all about how quickly and how many rigs we can get underground to start drilling the Fletcher Zone.
Is there a timeline for bringing Spargo underground and Pioneer 3 open pit into production?
At this stage, no. We've had the keys to the Southern Goldfields assets for four weeks, so we're reviewing all of these targets now, and what we are seeing is, specifically around the Higginsville area, there are a lot of other larger opportunities outside of Pioneer.
... Okay, so the final question is from this caller. It's a little bit open-ended. Do you want to comment on any other levers that Westgold might be able to use to further enhance the business?
Absolutely, Kathleen. Well, you've asked some very sharp questions here. This question really gets to synergies. We can see the ability to drive a lot more costs out and profitability up by taking a different approach to what we consume in the Southern Goldfields and how we do it. What we see within the business that we've acquired in the Southern Goldfields is a business which really is far more reliant on third-party supply than our Murchison operations. The approach we're taking in the Murchison, we'll take to the Southern Goldfields, and with this much larger footprint, we can now find ways of leveraging the scale of the business and driving additional cost out.
I've got a question from David, and it's about depreciation. It's noted that the depreciation charge has come down in FY 2024 relative to FY 2023. Is this a function of the increased resource base?
Thank you, David. Absolutely, and as well as, with the Paddy's Flat put in care and maintenance, that also plays into the D&A.
Niman, I've got a comment on this, but the question from Andrew is similar to that: Can you provide any commentary on pro forma EBITDA for FY 2025 and beyond?
It really depends on the D&A on how our operations with the growth projects go on. I would expect it to increase as Great Fingall come online, and together with the now enlarged Westgold, encompassing the Southern Goldfield operations.
Question from Tom. In theory, in what timeframe could the Fletcher Lode be mined?
Thanks for that question, Tom. We've got access to the top of Fletcher now, and first ore should be in the second half of FY 2025.
Thank you. And just a further question on guidance. Are you expecting to release guidance for two to three years or just for FY 2025?
Just for FY 2025 at this stage.
Thank you. We have a question on hedging from Shane. At what point would Westgold consider downside protection for gold price? It looks likely to continue upwards. However, is there a strategy for future price protection?
At this stage, our history with hedging has been quite poor, Shane. I mean, our best protection against downside is really better delivery in our mines. We review our hedging policy every month, but at this stage, the real protection is to execute our mines better and continue to drive costs out.
Thank you. We'll just pause there to allow anybody else to enter a question into the queue. I have a question from Larry. Thanks, Wayne. The Higginsville plant only ran around 60% throughput capacity over FY 2024 in Karora's ownership. Will you look to increase feed from stockpiles to change in strategy over FY 2025?
Thanks for that question, Larry. We're super excited about Higginsville. We can see the ability to keep that plant full from others, other opportunities other than stockpiles. Watch this space.
And, we'll just pause there again to allow anyone to enter a question. The question from Kathleen: Could you provide some commentary on what expansions the plants within the portfolio might be capable of?
Kathleen, another two great questions. We're now facing the first world problem of a much larger Bluebird South Junction, getting up to 1.2 million tons per annum, sitting alongside a processing plant in Meekatharra, which currently does about 1.6 million tons per annum. With the increasing scale of the business in Meekatharra, we can see the ability to expand the mill at Bluebird without actually spending any capital. And how do we get the 1.6 million tons - 2.2 million tons at Meekatharra? To basically develop some softer open pit targets to blend with the harder underground ore. In regards to the-
I'll read that one out. The second part of the question is, could the two Karora plants see large upgrades in hybrid power supplies to save capital?
Absolutely. I mean, we've just completed this, well, FY 2024, the completion of 82 MW of hybrid energy in our Murchison business, which that project in itself won some awards recently. We're really comfortable with hybrid energy and how to install it. We're starting to look at that specifically now for Higginsville, and that, for us, is the it provides the ability to reduce the operating cost in that facility.
We'll just pause there again, ladies and gentlemen. We've got one final question. No, sorry, that's not come through properly. Wayne, I'll hand the call back to you for any final closing remarks.
Thanks for that, Shane. Thank you, everyone, for taking the time to listen to this presentation today. Full credit to the team who have put it together. I think really, if you read no more than the first slide in showing the changing financial performance of the business, which has happened in a very short timeframe, if the trend's your friend, this is what we're aiming on continuing to increase the returns to our shareholders and build a much larger, long-term, sustainable business.
Thanks, Wayne, and that concludes today's call.