Good morning, everybody, and welcome to the Westgold Resources Q1 FY25 quarterly webinar. I'll now hand you over to your first speaker for today, Wayne Bramwell, CEO and Managing Director.
Thank you, Shane, and welcome everyone to today's webcast. I would like to acknowledge that I'm speaking from Perth, Western Australia, on the traditional land of the Whadjuk people of the Noongar Nation. I would also like to acknowledge that our operations are hosted on the lands of other First Nations people. Westgold respectfully acknowledges the traditional owners of the land on which we operate and honor their enduring connection to Country. We pay our respect to Elders past, present, and emerging. Next slide. I'm here today with my fellow executive team members who will speak to their areas of accountability in the business.
Joining me today in order of appearance are Kaisan Critchell, our Interim Chief Safety and Sustainability Officer, Mel Wren, our Chief People Officer, Tommy Heng, our Chief Financial Officer, Andrew McDougall, our Chief Technical Officer, who will also be speaking for our Interim COO, who is on leave today, and Simon Rigby, our Chief Exploration and Growth Officer. This was a truly transformational quarter for the company. We completed the AUD 1.4 billion merger with Karora Resources, quite literally doubling our business in scale. We commenced trading on the TSX. We joined the ranks of the S&P/ASX 200. We welcomed 600 new members to our team, and pleasingly, we did this while integrating our operations to deliver our highest gold production yet, 77,000 ounces to be exact.
We did this transaction on the back of the efforts of our team, and the cash flow generated from six successive quarters of disciplined cash build in the Murchison. We did not need to raise equity from the market or draw down on our debt facilities. Today, we remain unhedged, debt-free, and positioned for growth into FY25/26. Critically, our team has a clear strategy to integrate, capture, and build increasing economic value from our much larger portfolio of Western Australian assets. With that, I'll hand over to Kaisan Critchell, our Interim Chief Safety and Sustainability Officer.
Thank you, Wayne. Our total recordable injury frequency rate increased to 7.37 injuries per million hours worked. This was unfortunately an increase of 7.59% quarter on quarter, not the direction we're used to going in, but still a 16.44% reduction for the full year. We had two lost-time injuries for the quarter, increasing the lost-time injury frequency rate from 0.62- 1.00. The high potential incident frequency decreased from 6.83- 5.18. There were no psychosocial harm events during the quarter. One of our values is choose safety. It remains our priority to support our expanded team to achieve this with a uniform focus on safety across the whole business. I'll pass over to Mel now, our Chief People Officer.
Thank you, Kaisan. As Wayne pointed out, we've added 600 people to the Westgold team in the course of the merger with Karora. So much of August and September were dedicated to the integration of the two teams into one. We are pleased with the results so far. Turnover is at the lowest it's been, and we've had positive feedback on our emerging culture. During the quarter, female participation in the workforce increased from 12.5%- 14.6%, which reflects our efforts in this space. We also rolled out an attractive family and medical leave package to the extended business, with pleasing increase in the number of males also utilizing the parental leave, either as primary or secondary carer. At the end of the quarter, we employed a team of 2,100 employees and contractors across the expanded group.
I'm happy to take any questions about our team and how we find top talent in this market, but for now, I'll hand over to Tommy to talk about the Q1 results that our people have delivered.
Thank you, Mel. Next slide. This picture tells a great story of what has been truly a transformational and transitional quarter, and I will now talk about the highlights that transpired. Next slide. We opened the quarter with AUD 263 million in cash, bullion, and liquid investments. To Wayne's point, this cash position was built over six quarters of disciplined performance at our operations. As this graph shows, we underwrote our operations generating underlying operating cash flows, paid the cash component of the merger together with associated merger costs, and finished the quarter with over AUD 100 million in cash, bullion, and listed investments, and notably without drawing down on the debt facility.
Key items I wish to highlight are cash acquired of AUD 32 million from Karora on 1 August is net of the Macquarie debt repayment of AUD 44 million, and Karora and Kali Metals contribution of AUD 11 million as part of the merger. Operating cash flows for the Southern Goldfields include August and September only. Growth capital projects relate to the investments on expansions at Beta Hunt, Big Bell, Great Fingall Development, Bluebird South Junction, and Starlight mine. PP&E were for processing facility upgrades, paste plant, camp and infrastructure upgrades, and underground equipment. The merger cost of AUD 153 million relates to AUD 125 million cash consideration paid to Karora Resources shareholders, AUD 21 million for change of control payments to Karora executives and directors, and AUD 7 million on advisor costs, namely legal, financial, taxation, and corporate advisory. Next slide.
Putting the merger itself and the cash flow implications aside, given this was also a transitional quarter, we are pleased with the underlying results. We achieved record gold production of 77,369 ounces, representing three months of production from the Murchison and two from the Southern Goldfields. Our all-in sustaining cost of AUD 187 million is higher, as it now includes the Southern Goldfields for the first time, to the order of AUD 66 million.
Key items to note with respect to the all-in sustaining costs are in the Murchison Fortnum commencing commercial production and processing of stockpile build-up that were unable to be processed due to the weather events late in the prior quarter, offset by the lower processing costs at Bluebird Processing Hub, which is undergoing planned maintenance on crushing and milling circuits in September to prepare the processing hub for higher throughputs and increased delivery of higher grade ore from an expanded Bluebird South Junction in H2 FY25. Notably, our all-in sustaining costs will improve quarter on quarter following integration of the Southern Goldfields operations and as our growth projects ramp up to production in H2 FY25. Next slide. Projects that will reduce our all-in sustaining costs and increase production over the year include opportunities for third-party ore purchase agreements.
As you can imagine, there are a number of smaller miners out there with ore and no mill and a keenness to capitalize on the gold price. We are happy to assist where possible. Growth opportunities such as Polestar Lode at South Junction and the Beta Hunt Fletcher Zone are two very exciting pillars for growth, both of which come online in the second half of the financial year. I will leave my colleague Simon to talk more about these. We are also very focused on exercising cost discipline and realizing the post-merger synergies that we are currently assessing. It is in light of these and other opportunities, together with our existing production profile, we maintain on track for our FY25 full-year production guidance at between 400,000 and 420,000 ounces, and the cost guidance at AUD 2,000-AUD 2,300 per ounce.
I will now hand over to Andrew to talk more about our operating results and also our capital investments in Q1 FY25.
Thank you, Tommy. From a group perspective, we're happy with the results in what was a transitional quarter. We received record gold production at a record gold price and cash flow generation despite a period of transition, and our production is in good order. Our capital investment of AUD 58 million was largely in line with our previous quarter of AUD 64 million. Our capital programs are progressing well at key growth targets, including Bluebird South Junction, Beta Hunt, and Great Fingall. During the quarter, our focus has been on the integration of two asset portfolios and two asset teams, deploying our people and our resources at the right place at the right time. Our operations in the Murchison delivered just under 53,000 ounces of gold for the period. Our costs remain within guidance at just under 2,300 per ounce.
Costs were also slightly impacted by the high percentage of stockpile ore processed in quarter four due to rain delays. Capital invested in the Murchison is progressing well as we invest more increasingly in Bluebird South Junction, stepping from 500,000 tonnes to 1.2 million tonnes per annum in the second half of 2025. We made some adjustments to the Bluebird mill during the quarter to accommodate for higher throughput and have ordered additional equipment ahead of the ramp-up. Turning to the next slide, we produced 24,480 ounces of gold from the Southern Goldfields, with the end result representing just two months of production from the ex-Karora assets. The All-in Sustaining Cost was just under AUD 2,700 per ounce. That said, in August and in September, we made basic changes to the operation, and we'll see those benefits flow through into FY25 H2.
Pleasingly, Beta Hunt is on track to achieve a consistent throughput rate of 2 million tonnes per annum in the second half of the year. We are already starting to see those rates on a daily basis. In quarter one, we invested in our growth capital of AUD 39 million, largely on our planned expansions for our assets at Bluebird South Junction, Beta Hunt, and Great Fingall. We also invested AUD 19 million in plant and equipment, with AUD 5 million of this on processing facilities and AUD 5 million on the Big Bell Paste Plant. We also invested AUD 14 million in exploration, at which point I'll hand over to Simon.
Thank you, Andrew. Turning to the next slide, I would like to provide a short update in relation to the exploration and resource definition activities across the business during the quarter, where we have continued to unleash the drill rigs. Moving to the next slide for an update on resource definition activities. During the quarter, up to 11 drill rigs were operating across the business on resource definition-related activities, with a particular focus on the outstanding growth opportunities at South Junction and Fletcher. In relation to South Junction, on the next slide, as per the most recent market update on September 5, assay results continue to impress, with the South Junction system remaining open downplunge 800 meters below surface. During the quarter, the company released both an updated mineral resource estimate and ore reserve estimate for South Junction, which were highly encouraging.
But it's important to note that, as per the ASX announcement of September 5, a substantial amount of downplunge drilling has been completed since these estimations, and this data will be incorporated into the next resource estimation update. It should also be noted that the Polestar Lode, while included in the current mineral resource estimate, was not included in the updated ore reserve estimation, and mining studies are underway to bring Polestar into the mine plan. Turning to the next slide on Beta Hunt, which, of course, was the key driving factor behind the Karora merger, this system is very large and has significant upside potential both for parallel lodes and the southern extensions where up to three kilometers of the system has not been tested. Of early significance is the Fletcher resource definition program currently underway, as shown on the next slide.
The Fletcher Zone represents just one of many opportunities we see at Beta Hunt. The lode system, which parallels western flanks 300 m to the west, was not identified until 2016 and not advanced until 2023. Based on the Karora drilling today, over two kilometers of strike length, Westgold released during the quarter an initial exploration target comprising 1.6- 2.1 million ounces, with the stage one target being the southern half of the zone of 0.8- 1.2 million ounces. Drilling of the Fletcher system has now been accelerated with an additional two Westgold drill rigs to what was previously a single rig campaign. Turning to the next slide, in addition to the resource definition programs, Greenfields exploration activities also continued during the quarter, with a series of drill programs across the targets in the Meekatharra and Fortnum regions.
In addition, extensive target generation and drill program development was undertaken both in the Murchison and Southern Goldfields regions, with drill programs kicking off during October. With that, I will hand back to Wayne on the next slide.
Thank you, Simon. We now have two growth drivers in our business. In the Murchison, we will see the outputs from Bluebird South Junction grow during FY25, and in the Southern Goldfields, we are setting up Beta Hunt to consistently deliver greater than two million tonnes per annum run rate. These are exciting times. Capital allocation is key at Westgold. We are now focused on allocating that capital to the assets which can generate the highest returns for our shareholders. Next slide. In closing, Westgold continues to evolve. Let me leave the listeners with this. Westgold is now rapidly becoming one of Australia's leading gold producers. We are unhedged. We are debt-free. We have a wealth of growth opportunities across two of Australia's richest goldfields, and importantly, we have the flex in our balance sheet to make these opportunities a reality.
We are on track to deliver FY25's guidance of 400,000 ounces. But most importantly, we now have a larger and aligned team very focused on driving cost out and production up across two of WA's most productive goldfields. And with that, Shane, I'd like to close today's presentation and open up the chat line for questions.
Thank you, everybody. If you would like to enter a question, you can do so in the question box on the webinar facility. We'll just pause now to allow people to enter questions. Your first question comes from Nate. Hi, Wayne, Simon, and Andrew. Thank you for the opportunity to ask the following questions. When will the company be providing the market with a detailed plan for expanding production from 400,000 ounces to its longer-term aspirations?
Thanks for that, Nate. We've had these assets now for less than three months. We're doing a full asset review and building out a far more detailed 3-5 year plan. We just have to do the work, and that'll take a bit of time. But as an interim, the plan is to put a strategy document into the market soon to sort of give people more color around the key growth drivers in the business.
Just a follow-up question from Nate. Is there anything you can say regarding the Meekatharra growth prospects? Sorry, growth projects. Perhaps could we see an exploration update covering the company's current package?
Nate, I'll hand over to Andrew McDougall to talk about things like South Emu-Triton and what else is happening in Meekatharra.
Thanks, Wayne. Yes, certainly, we are looking at all of our prospects, and we have such a great range of mineral tenements across MGO. We're looking to evaluate them as part of our asset strategy. We do see ourselves getting back into South Emu-Triton, even testing Rand and Boomerang in the coming second half. Around Meekatharra itself, we've talked around Polestar and some of the great work that Simon and his team has done at defining those opportunities. So we'll be looking at executing another operation at Polestar through our study work in the second half of the year.
Thank you. Yeah. Shane, can you flag up the questions? There was a question. There was a question there about right-sizing the package. I'll hand that to Simon to detail.
Thanks, Wayne. Obviously, as a business now, the company has 3,200 square kilometers of highly prospective tenements. That's a large amount of land. Our team is currently working through that and prioritizing the pipeline of targets we wish to test. It is likely that some of those parts of that package at some point we will look to joint venture or divest, but not until we complete our project reviews and come up with a detailed pipeline of targets we want to test over the next few years.
Thank you. Your next question comes from Mark. Given Bluebird is a large contributor, can you give some indication on guidance of grade and cost over the next couple of quarters before getting into the higher grade at depth?
Bluebird South Junction will continue to move up to 120,000 tonnes per month. We are only in the early stages of ore drive development and footwall development across that asset, with great resource definition drilling defining that. We expect to have really good definition drilling of that target, taking our measured and indicated beyond 12 months into two years through H2. That'll give us great confidence into the production rate. We do see it extending extensively beyond what we're currently having our mine plan as per the drilling indicated by Simon.
Thank you. Your next question from Nate. Is the company contemplating expanding the throughput at Higginsville if Beta Hunt can achieve 2.5 million tonnes per annum over the medium term? And what might that look like?
Nate, great question. Absolutely. A 1.6 million tonne per annum at Higginsville is not big enough, and we're starting a study now to look at a 2.5 million tonne expansion. Basically, the plan is to have our largest mine, Beta Hunt, feed our largest mill, Higginsville, and that will maximize returns and reduce our operating cost.
A follow-on from Nate. Regarding Starlight, with the benefit of the extra mining crew, has the underground operations achieved the improved mining rates, and is there more upside to this?
Thanks for the question, Nate. Yes, so far we're seeing improvement. We are also investing in electrical and ventilation infrastructure through the second half of the year that we'll see a step up further. So at the moment, we're near filling the mill capacity. But if we seek to go beyond that, there are small improvements even in the plant we're looking at to increase throughput as it stands.
And finally, are you seeing operational efficiency as you further progress through the 100-day post-merger period?
The 100-day integration plan was very clearly structured. The first month, which was August, the Westgold executive team and support staff were all over the Southern Goldfields operations. The plan was to spend August not making any significant changes to the Southern Goldfields business and try and understand what we needed to prioritise to see operational efficiencies. We've started to make changes in September and October, and pleasingly, we saw Beta Hunt hit an all-time record of tonnes hauled up the decline in late September, early October. It's doing this intermittently, and we keep using the word consistent. Again, we are very confident that as we start to make additional changes, that we'll see more consistent production at Beta Hunt and at Higginsville, so in summary, yes, operational productivity at both Two Boys Mine and Beta Hunt is already starting to move upwards.
Thank you. The next question is regarding exploration results. If you're able to give an idea of the timeline for future exploration results?
Thank you for the question. Look, certainly, with many drill rigs running across the business, we're generating data at all times and reviewing that. The material data obviously gets released to market at appropriate times. We are currently working on an update to the South Junction program where we've had a substantial amount of drilling in recent weeks and recent months, which is imminent. And then there'll be additional updates as we go towards the end of the year.
Next question is from David. Is there any near-term replacement for the Pioneer open pit mine? And is there any guidance on grade at an expanded two million tonne per annum Beta Hunt?
Yeah, thank you for the question. At the moment, we are looking to replace the Pioneer Second Pit program. Harken and Atreides on the northern side of the leased tenement is going into drilling. So we're commencing that drilling next week, and then a subsequent program expected to move into mining in the second half of the year. On the grade for Beta Hunt, again, it is early days. We're doing a lot of remodeling and prioritizing of higher grade zones as we learn more about the asset. For now, we expect to be on budget or potentially high, depending on the outcome of that work.
Next question from Rob. Hi, team. Sorry, not that one. Hold on a sec, ladies and gentlemen. We'll just reorganize the question queue. Next question is, do you expect your safety interventions to get back towards excellence?
Thanks for the question, Ganesh. One of our core values is safety. We have already managed to get our TRIFR right down over the last couple of years. So although we've seen a slight increase in this quarter, it's still much lower than what we've seen previously. So yeah, absolutely, we're continuing to drive safety performance.
Thank you. Next question is from Nate. One slide mentions consolidating processing in the Southern Goldfields. What steps does this require and what are the benefits?
Thanks, Nate. It really feeds back into your previous question about what's the right scale mill for Higginsville. As I said, we've started a study looking at a 2.5 million tonne per annum expansion at Higginsville, and that's what we really talked to about consolidating processing in the Southern Goldfields. And should go Shane.
Regarding Bluebird South Junction and the Polestar Lode, will the company be providing an exploration target similar to, say, the Fletcher Zone?
Thanks for the question. At this stage, no. We will be putting out a new mineral resource estimation for South Junction, Bluebird South Junction before Christmas. That will include a breakout of the Polestar lode versus the South Junction lode within that system. So there'll be more detail provided around those different lode systems at Bluebird South Junction.
And there's a follow-up question regarding Two Boys.
Two Boys, sorry.
Regarding Two Boys, just being as previously mentioned, it's potentially being a 20,000 tonne per month mine with potential to expand. I was going to ask if you would like to comment at all on Two Boys.
Thanks for the question. Look, we're very excited about Two Boys. Two Boys was scheduled to be completed in November this year. On reviewing and looking at the mine, we are starting to put in some exploration drifts and an exploration program around that to extend the life of that asset. We believe that'll continue through the course of this year, and that will give us the opportunity to look at regional resource development targets from which we can leverage that production.
Regarding Higginsville, would you be able to elaborate on open pit opportunities that are available near the mill?
Thanks for that. Andrew touched on the next part of our open pit program at Higginsville, which will include the Atreides and Harken and Pitts. We're really excited about the Higginsville package because it's largely been untouched for modern exploration for 10- 15 years. So Simon and Andrew are going through the opportunities there now, reprioritizing what's next, but certainly Atreides and Harken, and we're tendering the open pit mining of that as we speak. So that will be our H2 mining program.
Just have a follow-up question regarding the transaction costs that Tommy mentioned in the presentation. From Paul, he's just wanting to see if that's the end of costs or whether there may be some more trailing costs in forthcoming quarters.
Yeah, thanks for the question, Paul. With regards to stamp duty, as you appreciate, as we go through the post-completion purchase price allocation and valuations together working with the state revenue, that is still yet to come and envisage towards the end of, I would say, around about August 2025. Thanks.
Next question from Ganesh. What, if any, major concerns do you have and why do you feel the excitement for the future?
Great question. My major concern is we've got so much opportunity in this business now. It's quite mind-blowing on a daily basis to understand what this larger portfolio can do. We're very much focused now on delivering the synergies that we promised to the market around this merger, and I'm really happy to say we've now got a much larger team to do that. So the energy in the business is really high. Momentum is continuing to build, and we're already seeing positive momentum changing at Beta Hunt, which is key to the Southern Goldfields business and Higginsville. On the flip side, in the Murchison, every day we are proud of what we see from the drill bit at Bluebird South Junction.
That is really driving our excitement in the north, and not too far behind it, you'll start to see Great Fingall emerging with early production in the back half of FY25.
Thank you, everyone, for joining today. We're just approaching time. I might hand the microphone back now to Wayne if he wants to make any final brief closing remarks.
Thanks, Shane. Q1 FY25 was, as we stated, both a transformational and transitional quarter. Again, we only had control of the Southern Goldfields assets for two months out of the full quarter, and hence the numbers. It's hard to unpack some of the detail in the numbers from Q1. We're very much getting the Southern Goldfields now transitioning into the areas where we want it to go with very much focused on Beta Hunt. Q2 will show the start to see some of the benefits of our cost-out programs, but in reality, the real benefits of what we're doing in terms of changing the cost structure won't be completely evident until our numbers in Q3. Anyway, it's exciting times for Westgold. It's head down here. The focus is on delivery. We ignore the gold price. It's not something that we can control. The only things we can control is cost.
I can assure you the team is very focused on making sure we deliver or beat the FY25 cost guidance.
Thank you, everyone, and that concludes today's webinar.