The Westgold Resources Ltd (ASX: WGX) share price is in focus the company’s board approved a $145 million plan to expand the Higginsville Processing Hub, aiming to boost gold output and lower processing costs.
What did Westgold Resources report?
- Board approval for $145 million investment in Higginsville Expansion Plan (HXP), lifting plant capacity from 1.6Mtpa to 2.6Mtpa (up 62.5%)
- Gold production from the Southern Goldfields expected to increase by around 60,000 ounces per year to reach 160,000oz per annum
- Processing costs to fall 24% from ~$45/t to $34/t
- Pre-tax NPV of $1.4 billion at US$4,905/oz gold price, or $2.7 billion at current spot prices
- Pre-tax IRR of 43% at $4,905/oz, rising to 140% at spot
- Payback period between 12 and 21 months depending on gold price
What else do investors need to know?
The expansion follows a thorough Definitive Feasibility Study confirming both the technical and financial case for increasing Higginsville’s capacity. The project’s design includes new crushing, milling, and leaching infrastructure, with some equipment future-proofed for a potential further scale-up to 4Mtpa if needed.
Construction is set to begin in FY27, with commissioning and expanded gold production expected from mid-FY28. Westgold’s project team is now focused on procuring long-lead items and finalising engineering, procurement, and construction contracts.
What did Westgold Resources management say?
Westgold Managing Director and CEO Wayne Bramwell said:
The Higginsville Expansion Plan (HXP) is the next step to drive down unit costs and increase Group free cash flow from the Southern Goldfields. By expanding the Higginsville mill capacity to a nominal 2.6Mtpa we are creating a more productive, lower-cost processing hub to match the growing outputs from our Beta Hunt mine. This will see us deliver higher Group gold production at a lower cost, in line with our 3-Year Outlook.
What’s next for Westgold Resources?
With the investment decision now locked in, Westgold’s short-term focus will be on securing equipment and progressing tenders to prepare for construction. The company also continues to invest in exploration at the nearby Fletcher Zone, which could support future expansions.
The new infrastructure is designed to handle even greater throughput if recent regional discoveries and resource upgrades justify further growth. Westgold remains committed to delivering improved margins and free cash flow by scaling up its best-performing assets.
Westgold Resources share price snapshot
Over the past 12 months, Westgold Resources shares have risen 145%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 8% over the same period.
The post Westgold Resources gives green light to $145m Higginsville expansion appeared first on The Motley Fool Australia.
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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.