Westgold Resources doubles revenue, profit surges in latest half-year

Westgold Resources is the latest gold miner to reap the rewards of the unprecedented rise in the price of the precious metal, doubling its revenue in the latest half-year. Westgold told the market on Thursday its revenue had surged to $1.238 billion in the six months to December 31, up 98 per cent compared with the same period a year earlier. The company said underlying earnings before interest, tax, depreciation, and amortisation was $612 million, 36 per cent up on the previous corresponding period, with underlying net profit after tax being $314m, up from $57m a year earlier. Westgold said it produced 170,000 ounces of gold at an all-in-sustaining cost of $2871/oz from ore mined from its assets in the Murchison and southern Goldfields, with an ore purchase agreement with New Murchison Gold contributing an additional 25,000oz of production at an AISC of $5644/oz. The company said the agreement resulted in an additional cash inflow of $15m for the period. In total, Westgold’s consolidated group production for the half year was 195,355oz at an AISC of $3225/oz, representing a 23 per cent increase in gold production compared to the same time a year earlier. The company said the increased production combined with a higher achieved gold price of $5877/oz, versus $3910/oz in the prior corresponding period, drove half-year revenue to a record $1.238b. Westgold said the AISC of $2871/oz for the period exclusive of the ore purchase agreement represented a 12 per cent increase compared to the FY25 first-half AISC of $2562/oz. The company said AISC in the Murchison was higher because of increased mining and development activity from the expansion of Bluebird South Junction and mining at Great Fingall. It said southern Goldfields AISC increased because of higher levels of development at Beta Hunt, positioning the operation for a ramp-up in production in the current half. The company said the higher gold price also drove a $67/oz increase in AISC due to higher royalty payments. Westgold said it had a record underlying net profit before tax of $447m and a record underlying net profit after tax of $314m. However, the company said statutory earnings were affected by a one-off, non-cash loss of $178m — $125m after tax — on the sale of Mt Henry-Selene near Norseman, resulting in a statutory profit before tax of $271m and a statutory net profit after tax of $191m. Westgold noted that while the impact of the sale of Mt Henry-Selene to earnings were non-cash, it was important to note the sale generated immediate real cash inflows of $15m and about $65m in Alicanto shares — representing a 19.9 per cent strategic stake — and up to $30m in deferred consideration payable in cash or shares upon the achievement of agreed project milestones. The company said the strong profitability allowed the company to deliver an underlying treasury build of $550m for the half, before paying $50m to close out outstanding debt, $76m in stamp duty for the Karora Resources transaction, $129m in growth and exploration, $29m in dividends and share buy backs, $2m in third party shares purchases, and receipt of $26m in cash inflow for asset sales. It said this enabled it to bolster its balance sheet, closing the period with a treasury balance of $654m. The company said the board had elected to not pay an interim dividend for the first half but maintained its dividend policy seeking to pay out an annual minimum dividend of 2¢ per share, up to 30 per cent of free cash flow. It said this decision reflected its commitment to maintaining a balanced approach between investing in near-term growth options and maintaining balance sheet strength to deliver shareholder returns. Westgold managing director and chief executive Wayne Bramwell said the latest half-year results were “robust”. “Over the past three years, we have strategically allocated capital across our portfolio to position the company to more consistently deliver financial returns to our shareholders, a decision that is now producing tangible benefits,” he said. “As an unhedged gold producer operating within a strong market environment, we delivered record returns for shareholders in H1 FY26. “The company is well-positioned to continue capitalising on current conditions, with near-term growth anticipated in the upcoming half and further expansion detailed in our three-year outlook through FY28. “Our outlook is supported by a defined strategy: to enhance and optimise outputs from our core assets while identifying opportunities to create additional value for shareholders from select non-core projects throughout the portfolio.” Mr Bramwell said growth in the Murchison region would be driven by the expansion of the Bluebird–South Junction mine at Meekatharra and the start of commercial production at the Great Fingall mine near Cue. He said in the southern Goldfields, growth would come from the expansion of the Beta Hunt mine and the Higginsville processing hub. “In regard to value-creation from non-core projects, the recently announced Mt Henry–Selene transaction has immediately benefited shareholders,” he said. “The share consideration increased from $64.6m to $110m, reflecting the appreciation of Westgold’s 19.9 per cent stake in Alicanto upon completion. “The Valiant IPO remains scheduled to commence trading on the ASX in March, and divestments of the Chalice and Peak Hill assets are progressing as planned.” Mr Bramwell said current financial year production and cost guidance remained unchanged at 345,000oz to 385,000oz at an AISC of $2600/oz to $2900/oz.