You're joining our webinar on Westgold's Three-Year Outlook. I'll hand over shortly to our Managing Director and CEO, Wayne Bramwell, who will take us through a brief presentation and will take questions after that. If you could please submit your questions via the chat function. Thanks, Wayne. Over to you.
Thank you, Annette, and welcome to everyone online, and thank you for joining us today to discuss Westgold's Three-Year Outlook. I'm joined here today by our COO, Aaron Rankine, and CFO, Tommy Heng, who will both be available to answer questions at the end. Slide four, let's dive straight in. The three-year outlook is a high-confidence plan and is the first multi-year view Westgold has ever shown the market. It maps out a pathway that sees group production lift from 326,000 ounces delivered in FY 2025 to 470,000 ounces in FY 2028. Most critically, it sees our all-in sustaining costs fall over the three-year outlook. The three-year outlook is underpinned by FY 2025 ore reserves only. We announced ore reserves of 3.5 million ounces in June this year, which at our FY 2025 production rate of 326,000 ounces supports 10 years of production from the business.
Fully utilizing our four processing hubs is key to the three-year outlook. Our mills have not been fully utilized over the past few years. Our hubs like Meekatharra, our largest mill, have been reliant on low-grade stocks to keep the mill full. Over the three-year outlook, we replace low-grade stocks with higher-grade ore, and this is a fundamental change to our operating strategy that will see group mill grades lift and operating margins enhanced. Slide five. Production lifts and costs fall. It has taken several years to get our mines to a point where mine outputs can match or exceed our milling capacity. This has been achieved by heavy investment in resource drilling into our major assets like the Starlight underground, Bluebird-South Junction , Great Fingall , and Beta Hunt. All of these mines are now beginning to lift their outputs, and that underpins our confidence in the three-year outlook.
The three-year outlook chart shows a material improvement in both production and costs from FY 2025, where we delivered 326,000 ounces at an Australian dollar all-in sustaining cost of AUD 2,666 an ounce, to 470,000 ounces at circa AUD 2,500 an ounce in FY 2028. The three-year outlook sees greater than 1.25 million ounces produced and AISC falling. Importantly, this growth is organic. It's not inorganic and is fully funded from our treasury and forecast free cash flow. Slide six.
Please go ahead.
The three-year outlook is underpinned by June 25 reserves and resources. Key to our confidence in this plan is that 80% of the material mined over the three-year outlook is in reserves. Slide seven. The last three years have been about drilling our core assets, improving our mine outputs, and investing in our processing plants to make them more reliable. The three-year outlook you're seeing today is all about our processing hubs. It's about building high-grade stockpiles in front of them, optimizing feed blends to increase throughput, and squeezing more out of our smaller mills with incremental capital investment. Most importantly, it's about expanding Higginsville to circa 2.6 million tons per annum to process all of Beta Hunt's expanded output. Having four processing hubs gives Westgold strategic influence across the two goldfields we operate in. Processing infrastructure of scale is extremely valuable and one of Westgold's biggest value drivers.
Slide eight. Keeping our mills full with higher-grade ore will increase free cash flow. Let's dive into each of our processing hubs one by one, starting with our largest, the Meekatharra hub of 1.8 million tons per annum. The plan for the three-year outlook really is Bluebird-South Junction underground will expand and will continue to expand, conservatively reaching 1.2 million tons in FY 2028. Though we're already approaching those numbers towards the end of this financial year. Great Fingall is the first high-grade stope out of Great Fingall we'll see in FY 2026, ramping up to a scale of 0.6 million tons per annum in FY 2028. This injects grade into the merchant business we've not seen, with the expectation of Great Fingall being circa 4 g per ton. Another new addition to the merchant business will be the reactivation of open pits during FY 2027.
Again, the secret sauce to often many of our processing hubs is soft oxide ore. The intent with our own pit program is to build buffer stocks and add softer ore to our hard ore blend. The Higginsville hub, 1.6 million tons per annum currently. Beta Hunt infrastructure upgrades will support a two million ton per annum output run rate by the end of H2 FY 2026. Key point to be noted in the three-year outlook, there is no contribution from the Fletcher Zone. 2 million tons from Beta Hunt is predicated on two mining fronts, the Western Zone and the A Zone and the Western Flanks. In the three-year outlook, there is no Fletcher. Additional grade into the Higginsville mill is being provided by the Two Boys mine at Higginsville. Over the three-year outlook, we plan to commence the Spargo's underground, a short distance from the Higginsville mill.
Currently, the 2.6 million ton Higginsville expansion study is running and will be complete early in the new year. Construction is planned to commence in FY 2027, with this construction or the additional throughput available to us during FY 2027 and FY 2028. The last two mills we own are the Cue hub and the Fortnum hub. Cue, 1.4 million tons per annum of capacity currently, and the Fortnum hub, 0.9 million tons. Both of these processing plants are currently being optimized. They have ore in front of them, and their mines and the mills are well matched. Slide 11. The three-year outlook is conservative by design and has material upside. There are a summary of initiatives that the Westgold team is actively advancing that could see us outperform the three-year outlook.
Those initiatives include further expansion of the Bluebird-South Junction underground, improvements in operational performance, specifically in our underground fleet productivity, and expansion of the Higginsville mill to up to or more than four million tons per annum. Within that three-year outlook, there is no contribution of coarse gold from Beta Hunt. We see coarse gold, but we've not baked that into the three-year outlook. An expansion of the merchants and open pit programs. In areas like Meekatharra, we have 96 old open pits, which provide additional opportunity and upside to the three-year outlook. Exploration and resource development conversion. Our team has shown that given the right resources, they can convert resource to reserve, and with AUD 150 million committed over the three-year outlook, we're confident that this team can continue to deliver.
Another opportunity to outperform the three-year outlook is the fact that Westgold has three underground mines in care and maintenance. Paddy’s Flat, Comet, South Emu, and Triton are all mines which are sitting in care and maintenance, and we're revisiting how we crystallize value from those assets. All or any of those could produce additional ore for some of our processing hubs. Slide 12. This has been a really short presentation because we're all very keen to get to the questions part. In closing, I'd just like to say this. The three-year outlook is a high-confidence plan that enhances Westgold's value proposition. It is focused on organic growth that reduces our all-in sustaining cost and sees production lift to circa 470,000 ounces by FY 2028. It is about creating sustainable value for our shareholders, employees, and stakeholders for the long term.
In closing, I would like to pose a question for our online audience. What is the fair value for a 470,000-ounce unhedged Australian gold producer? Thank you for your time today, and I'll open the floor to questions.
If you haven't already, please submit your questions via the chat function, and we'll be happy to get to those. We have a question here. Let me just open that up. One moment, please. We have a question here from Tyson. Tyson is asking, when do you expect the 1.8 million tons per annum Bluebird mill to operate at full utilization? Can you provide an indication of how much is expected from open pits, given Bluebird-South Junction is now expected to reach 1.2 million tons per annum in FY 2028, previously flagged for end FY 2026? I think we'll hand this question over to our COO , Aaron Rankine. Aaron?
Thank you, Annette. In short, the Bluebird mill is currently now operating at the 1.8 million ton per annum run rate as of Q1. The key change in the three-year outlook is the displacement of lower-grade stockpiles in that mill with higher-grade ore feeds. The open pit program will take up some of that from FY 2027. However, we do see opportunity to outperform as well with Bluebird-South Junction . Really, optionality is the key in terms of lifting the grade profile of Bluebird.
Aaron, can you just speak to, there's another question there about Bluebird-South Junction . Needs to be clear, in the three-year outlook, we're forecasting the underground to hit a AUD 1.2 million ton per annum run rate by FY 2028. Just explain the nuance about where we are with Bluebird-South Junction today.
Yeah, thank you, Wayne. As we have talked to the market, we have been optimizing the mine design of Bluebird-South Junction , and there's two key aspects of this. Firstly is opening up work fronts in South Junction. We've landed on a new mine design, which we'll start sharing with the market next quarter. That will open up work areas faster than our current estimates have baked in. Additionally, there's the opportunity for Hole Star to come into the three-year outlook. We've not included that in any of our numbers at this stage, and we're actively pursuing that as an additional mining front.
Keith, good, thank you very much. He's got our evaluation at AUD 9 billion from your lipstick ideas. Keith, we like what you're saying. Question here from Hugo. Hugo says, "Hi, Wayne and team. On costs, as you have provided a breakdown of the production outlook between the hubs, can you please provide a rough guide on the all-in sustaining cost across the hubs over the outlook? To give some comfort around how achievable the AUD 2,500 per ounce all-in sustaining cost is by FY 2028, can you please provide some color on what you've assumed around mining and processing costs?" Who would like to hit that one?
Let me front-end that one, Hugo, and then Aaron can dovetail on that. What we've been doing in the quarterly is we provide asset breakdown for the northern business, the merchants, and the all-in sustaining costs for the Southern Goldfields . We don't give it blow by blow, particularly in the merchants whereby we're selling, bringing ore from Q to Meekatharra. This hub and spoke model blends those costs in the north. A much better way to look at this thing is all-in sustaining costs for the merchants, all-in sustaining costs for the Southern Goldfields . In the detail of the quarterlies, you can see tons of grade recovery from each individual mine. One of the criticisms of Westgold in the past has been so many moving parts, hard to model.
We've now set up the scenario whereby you've got all the ingredients to do it mine by mine, but we really focus on all-in sustaining costs of the merchants versus the Southern Goldfields . Might just hand over the question, the back half of your question about how achievable is the AUD 2,500 all-in sustaining cost to Aaron.
Thank you, Wayne. The simple way I think to look at all-in sustaining costs for the business is we've not assumed any significant improvement in our cost per mining ton. What we're seeing, we've been relatively conservative on that front. What changes the cost profile for the business is the increasing grade through the mills by filling them with high-grade sources at a relatively stable and conservative mining cost per ton. The addition of buffer to our processing plants with the mines outperforming and the addition of open pits means we expect to see far more consistent, stable performance out of our mills at a higher grade. As yet, no real improvements baked in in mining cost per ton, but the lifting grade sees the improvement in our dollar sprouts.
Thank you, Aaron. We have another question here. What is the open pit contribution to the merchants and mills, Wayne?
Thanks for that. Again, I'll just front-end this question with the fact that there is contribution to the merchants and mills from open pits. One contribution which is live and active and baked into the three-year outlook is the ore purchase agreement with new merchants from the Crown Prince open pit. That ore is being processed at Meekatharra now, and the current mine schedule for that mine is 30,000 tons a month, 30,000 tons- 50,000 tons a month for two years. I'll hand over now to Leigh Devlin to speak about the Westgold open pit program, which is also included in the three-year outlook.
Yeah, thanks, Wayne. The Westgold open pit program is one that we're going to start in FY 2027. One of the aspects that Wayne tried to initiate for us in creating the three-year outlook was to create a sense of buffer around our mills, which is somewhat novel for Westgold. It also provides a bit more high grade rather than using up the low grade stockpiles that we've got floating around. The open pit program will encompass CGO, MGO, and FGO, so it will encompass the full merchants. Only a portion of that is going to get taken up in the three-year outlook. All up, we're looking at over 3 million tons' worth of material getting mined as part of that program, which will be over a five-year period. Only a short amount of this is captured within the three-year period.
It will provide a small but very valuable ounce profile in terms of the wider merchants as well, but allows us to create rainy day stocks that will sit up on the ROM ready for us to process when required.
Thanks very much for that, Leigh, and that's very key to the point. You cannot optimize these processing hubs without stockpiles in front of them. Having high grade stocks in front of these mills or soft oxide material will see throughput increase, typically grade lift and recoveries lift. All that adds up to additional ounces.
Thank you. We have a question here from Ray. Ray is asking, have we hedged any of our high cost inputs like diesel for the duration of the forecast? We'll hand that one to our CFO, Tommy Heng.
Yep, thank you for the question, Ray. No, we don't hedge for any of the gold price or our high cost inputs. Actually, for diesel, our reliance on it will be diminishing hopefully as we embark on more of our clean energy transition.
Thanks, Tommy. We have a question here from Douglas. Douglas is asking, when will Spargo's underground development be started and what grade can be expected for Spargo's? I'm going to hand that question to our COO, Aaron.
Thank you, Annette. Yeah, Spargo's relatively simple. We'll be starting the development of that in FY 2027 in our outlook. We're expecting a head grade out of that mine of more than 3.5 g. It's a relatively small contribution in the Southern Goldfields , though. I think it's about a four-year mine life at about 20,000 tons a month coming out of that mine when it's in full production.
Thank you, Aaron. A question from Sky. Sky is asking, can you provide some guidance on economics of mines in care and maintenance?
Thank you, Sky. It's Wayne here. Paddy’s Flat, Comet, South Emu, Triton, we're revisiting all of those assets now. When most of those assets were closed at a gold price of around AUD 2,500, today's gold price of AUD 5,800 makes those things a different proposition.
Thank you, Wayne. We have a question from Charles. What are you expecting for the FY 2027 production? What can be expected for an average grade for FY 2027 and FY 2028?
Back to me, I'll take that one. Thank you, Charles. I mean, the chart in the outlook shows 420,000 ounces forecast for FY 2027. Just seeing the rest of your question.
Grade.
Oh, and grade. What we're seeing in this business, Charles, is that the Westgold business is moving from typically a group milled grade of 2 g. It's rapidly moving up past 2.5 g per ton towards 3 g per ton. That's what's going to drive the operating margin in this business over the three-year outlook. Putting higher grade ore through our processing plants generates more ounces and lowers our cost.
Thank you, Wayne. We have a question from David. David's asking, what percentage of production does Westgold intend to hold as a full in on the balance sheet versus selling into the market? I'll hand that one to our CFO, Tommy.
Yeah, thanks for that, Dave. We have no set percentage. As we look at it now, Westgold is not short of its treasury balance and its balance sheet is strong. I would say on any given month, it really depends on the cycle at the end of the quarter. At the end of the quarter, as and when the month ends and the gold pour happens, it dictates what we hold at the end of the month. We have no set percentage that we hold.
Thanks, Tommy. We have a question here from Frank. Frank's asking, could you please provide more details on the cooperation between new merchants and gold and Westgold, both in the short and the long term? I'll hand that one to our Chief Growth Officer, Simon.
Thank you, Annette. We have a very strong working relationship with new merchants under the strategic alliance, which is ongoing. It gives us opportunities for further business relationships. At Crown Prince itself, the original or the initial ore purchase agreement runs for two years, with options to extend that past that point should the resources continue. We continue to work with new merchants and look at all sorts of opportunities that come forward from them.
Right. Thanks, Simon. Another question here. What contribution does Crown Prince have for production and all-in sustaining costs, and could life extend into FY 2028?
Yeah, look, I'll take that one. Aaron here. We've been fairly conservative on our view of Crown Prince, given we don't control it. Basically, we're expecting 15,000 ounces- 30,000 ounces this financial year and a relatively steady state in the three-year outlook. New merchants does have plans to extend in our drilling, but we're not relying specifically on that ore source in the long term. We're really focused on the ramp-up of Bluebird-South Junction , which we think will pair nicely with the Meekatharra hub in the long run.
Thanks, Aaron. We have a question from Ganesh. Ganesh is asking, are any lumps and bumps expected in production in coming quarters due to mill maintenance or rain or weather? Ganesh is saying he loves Westgold's initiative regarding the employee investment plans and focus on safety. I'll hand over to Wayne to take this one.
Thanks for that, Ganesh. Things go wrong in mining every day. I mean, that's what we get paid for, to manage those challenges. What we're doing to manage that challenge is really exactly what we've explained here. Putting stockpiles in front of these processing plants irons out some of those lumps and bumps. If one of our mines has a hiccup, we've got ore in front of these mills, so the mills keep going. What we're really, really, really proud about is the second point of your question. In our recent employee share sacrifice offering, one in five of our employees have taken up shares in the company. Now we've got employees who are acting and thinking like owners. We're really proud that our employees are now becoming shareholders in this business.
Thanks, Wayne. We have a question from Hayden. Hayden's asking, should we assume similar ranges for FY 2027 and FY 2028 for production and all-in sustaining costs? As for FY 2026, he's asking, is that ± 5% or wider? I'll hand back to Wayne to Aaron. Would you like to take that one?
Thank you, Annette. Look, the outlook beyond FY 2026, we've included, I'd suggest, more conservatism given that it's further out. I'd be thinking of those numbers as a baseline for performance of the business.
Thanks very much, Aaron. We have a question here from Hugo. Hugo's saying, you've highlighted the outlook as conservative. Can you please elaborate on where you think you've been conservative? Conservative in the outlook, is it grade reconciliation, mine ramp-up, mill utilization? Where have we been conservative? I'll hand back to Wayne.
Thanks for that, Hugo. I think our team, everyone sitting in this room, has learned the hard way about being overly optimistic in what we tell the market. We've been conservative in everything to do with this three-year outlook, based upon more recent disappointments in the market. We are driven here by underpromising and overdelivering, and that is something we've learned the hard way over the last 12 months.
Thank you, Wayne. We have a question from Larry. Larry's asking, when is the staff duty on the Karora assets due to be paid? I'll hand that one over to our CFO, Tommy.
Thanks, Larry. That's due to be paid somewhere in the middle of this month, circa AUD 75 million. Thank you.
Great question, Larry. We were waiting for this one to come, but we finally received the invoice, and Tommy will be making that payment very shortly.
Thanks very much. We've got a question here from Keith. Keith asked, what's happening between Two Boys and Triton? I'll hand that one over to Andrew to respond to, if you would.
Thank you for the question. Obviously, we're pretty excited about Two Boys. When we took over the mine, we had a two-month mine life, and over the past year, we spent a significant amount of time and effort drilling it out for a 15-month mine life. What's happening between the two? We have some defined targets that we'll be drilling through the second half of this year, and we expect that mine life to extend beyond the 15 months, flowing into the next financial year.
Thank you very much for that, Andrew. We've got another question here from Hugo. Hugo's asking, why has the studied Fortnum mill expansion been excluded from the three-year outlook? I'll hand that to Wayne.
Thanks, Hugo. Great question. We call this the FXP, the Fortnum Expansion Plan. Simplistically, it's just about priorities. The priority at the moment is to get Higginsville up to 2.6 million tons per annum or bigger because that's the thing that moves the dial for us in the Southern Goldfields . Currently, the Fortnum mill and the Starlight mine are really well matched, and we're seeing the grade come up in Starlight. There's no significant pressure to expand Fortnum yet. We're all really interested in expanding Fortnum, but it's a function of priorities and timing at the moment. That's why it's not being baked into the three-year outlook. It does provide upside, and depending on how the three-year plans, we'd all be very well disposed to seeing that Fortnum mill grow to 1.5 million tons.
Thanks for that, Wayne. We have a question here from Rick. I think this is one for our COO , Aaron. Rick's asking, do we have enough miners to handle this build-out of production? Also, do we anticipate any problems with all the areas to be mined in Beta Hunt, or are there any traffic problems with all the haulers, et c.? Do we need another decline? That's quite a few questions in there for you, Aaron, if you want to break those down.
Yeah, thank you, Annette. Good question. Something, Rick, we're very cognizant of is the risk of the labor market in Western Australia. There are a number of ways we're tackling this. Firstly, diversification of risk. We've introduced contract mining into Great Fingall . We've got contract mining at Mako. Our open pit programs will be contract mining. Open pit mining itself is a relatively different skill set. We're able to diversify the risk of mining there as well. Additionally, our larger mines are more productive, and we're getting more ore with the same or less amount of miners out of bigger stopes. Being more productive and diversification of that risk profile. The second part of the question around the decline at Beta Hunt. No, in the three-year outlook, we don't need additional haulage route. That mine's already established with twin declines in a trucking loop.
When we look at the study for Fletcher, that will likely require additional hoisting options, but that's under review.
Thank you. We've got a question here from David Brennan. David's asking, can you talk about what would be needed to pull the trigger to expand Higginsville further from 2.6 million tons per annum to 4 million tons per annum? Also, a reminder on the CapEx to expand to 2.6 million tons per annum. I'll hand that to Wayne.
Thanks very much, David. To answer your question, not much. I mean, the study is being predicated on a 2.6 million ton per annum flow sheet, but we will oversize the crushing circuit and the SAG mill so it is capable of doing 4 million ton. We're actively, if we can find a crushing circuit and a mill to suit secondhand in the market, we've already got pre-approval to do it. You can't bake that into our plan. At this stage, the study will hit the market in January. The board will make very quick FID financial investment and we'll be into this thing like demons. Really, yeah, we can see that in some sense, the expansion of Higginsville is a no-brainer because we know Beta Hunt can do up to 2 million tons by the end of the year.
Supported by Two Boys and open pits, we've got excess ore.
All right, thank you. A question here from Hugo. Following up on costs, as you focus on costs at the hub level, what should we assume as the all-in sustaining cost profile at the two hubs over the three-year outlook? Is the Southern Goldfields below AUD 2,500 and what about the merchants? Is that above in FY 2028 and by how much? I'll hand that one over to Leigh to respond to, if you would, Leigh.
Yeah, no worries. Thanks very much, Hugo. The asset across the merchants will stay relatively consistent. We would expect us to stay consistent with the run rates that we're seeing currently across the three-year outlook, but also the establishment of the open pit programs. Once the down south, though, once the Higginsville expansion is completed, the asset will drop and drop significantly. That would be the plan there. Across the business, we haven't baked in too many of those major reductions in costs, and a lot of that will come with the operational improvements that we're already starting to see at our mines at the moment and some that Aaron has started to initiate as well.
Thank you very much for that, Leigh. I think we have a question here from Keith. Keith's asking, have we revisited sans of Aaron for possible east-west mineralization?
Thanks, Keith. Yeah, look, we've done a reasonable amount of work in the Aaron area over the last 12 months, and we have considered the east-west. There's certainly some high-grade type mineralization in there, but quite discontinuous based on the drilling that's been done to date. We continue to reevaluate that whole Higginsville camp. I noted your question earlier around where Two Boys goes as it heads towards Trident. There's a lot of interesting stuff at Higginsville that's yet to be explored properly.
We have another question here from Keith. Keith's asking, will Westgold keep some of its gold in bullion instead of cash, like Black Cat? I'll hand over to Tommy for that one.
Yeah, thank you for the question. I can't comment on Black Cat, but I'll comment on Westgold. We, on a quarterly and a monthly basis, do have a bullion on hand. That's the simple and short answer.
Thanks, Tommy. I think, are there any more questions? I think we're getting through them at quite a pace. If anyone's got any more questions, please speak now, or I might hand over to Wayne to wrap up.
Thanks very much. Thank you, everyone, for patching in today. Look, this is an important day for Westgold. It marks another stage of our evolution to be able to articulate a clear, conservative three-year plan that sees this business grow conservatively. It's not just about growth for growth's sake. This is about margin because the only thing we can control is our costs, and this plan sees our all-in sustaining costs fall over the three-year outlook.
Thanks, everyone, for joining us and for your questions. We sincerely appreciate the interest, and we'll catch you on our next call. Please feel free to be in touch with us offline if you require any further information. Thank you.