Westgold Market Update

0:04 Good morning or good night, depending on which side of the globe you're on for today's presentation. I'm joined by Wayne Bramwell, CEO of WestGold Resources to discuss recent news and update the market on all things WestGold. Wayne, how are you this morning? Fantastic, Romeo. Thanks for the opportunity. Awesome. So for the folks in the room, here's how today's gonna work. I've got a number of questions for Wayne just to discuss recent news, but today is an interactive event. So please do feel free to ask questions for Wayne during today's chat. There's a chat button on the bottom right hand of your screen. You can click it at any time and enter your questions. If for whatever reason we don't get to your question today, we run out of time, it's only a half hour slot for today's discussion. Or for any other reason, it's off topic. I'll make sure the West Gold team gets your question, can get back to you. They'll also have your email and phone number, so they'll be able to get back to you at their leisure.

0:50 The other thing I'll say is today's event is being recorded and will be available probably before tomorrow morning Perth time and probably by midday Eastern time. So it'll pop right in your inbox. It'll also be available on Six's YouTube channel and right at this link that you're currently watching it on. But let's jump right into the protein, Wayne, if you don't mind. I know there's been a lot of... Perfect. There's been a lot of positive news flow lately with the record Q4 results and the

1:13 fiscal year 26 guidance. I'd love if you could just quickly walk us through all the key developments since that Q3 fiscal year 25 quarterly results and what should investors be looking for? Look there's a lot to like about how West Gold is tracking at the moment, Romeo. I mean, our June quarter results showed, gave people a glimpse of the momentum the business has got and its trajectory. In that quarter, we had a record production of 88,000oz, which shows people what this business can do when our mines start to deliver. Now, for a full year, ending June 30, the business delivered 326,000oz,

1:49 again, over 112,000oz higher than the previous year. So, we're very much now after 12-months of integrating the ex-Corora Southern Goldfields assets, starting to feel that the business is at an inflection point. So there's a lot to like that, plus what we're doing with the drill bit. I mean, we released the maiden resource for the Fletcher zone at Beta Hunt, which literally, it was double our expectation. So there's a lot to like about this business. A lot of it is both value being created by the drill bit and starting to see glimpses of what the business can do when these assets fire.

2:28 Great. I know this morning you released full year results. So I'm curious, what should investors be excited about looking for as they read through those? Look, again, FY25 results in some sense were always going to be tough because of the costs associated with the merger. But look, no buyer's remorse whatsoever from the Corora assets. The Beta Hunt mine is a fantastic, it's already a multi-decade mine. It will continue to be a multi-decade mine and it's getting bigger and it's getting better. We knew in the previous 12-months we'd have to invest in significant capital and upgrading the mine capital. I'm happy to say all that's behind us now. Even more pleasing is the Higginsville package, which we acquired in the merger. The little 2 boys mine has made money for us every month since acquisition.

3:15 We're mining open pits in the Higginsville area now. We're starting to see consistent increases in throughput, grade and recovery at the Higginsville mill. So overall, our Southern Goldfields business now is a really efficient business and getting more efficient and that efficiency

3:33 is driving higher mine output and cash flows. In the north, the Murchison again is probably a little bit further behind than where we'd like it to be. And we've spoken to that in some detail about the slow ramp up of South Junction at our Meekith Aram line. But overall, the business, for those who watch it quite closely, very much June was a record month. The June quarter was a record month. And that should give people confidence that the plan that we've set out is achievable.

4:06 Awesome. Now I know that you mentioned that the multi-year outlook is expected in September following that 25 mineral resource and ore reserve update. I'm curious if you could share your strategic vision for where you see West Gold positioned in, let's say, 3-5 years, particularly given that stated goal of becoming a leading Australian Gold company. Very much. Look, we're driven now by the purpose and the purpose is very clear, to become a leading Australian Gold producer. I mean, We can see big opportunity within the PAK portfolio of assets we've got. We're guiding the market towards

4:39 mid-point around 370,000oz, 380,000oz for this current FY26 financial year. That's a very conservative view of what we think it can do. So in the 3 to 5 year plan, which will roll out early in September, without giving the game away, the investors will see what that 3 to 5 year outlook looks like. And I can assure you, you know, there's been a lot of work that's sat behind that. But this business has the ability to generate a lot more gold at a lower cost and generate a lot more free cash. And the investment from FY25, some of those things now are starting to pay dividends.

5:17 Great. Now, I do know that you initiated a divestment program for smaller assets like Comet, Paddy's Flat and others to focus on those higher grade operations. I'm trying to get in your head. How do you balance the immediate cash flow benefits these assets provide against the kind of strategic value of simplifying your operations? In some sense, Romeo, it's a well-trodden path. We're trying to up-tier our asset portfolio now where we've got a range of smaller underground mines or smaller assets, which we just don't think will have scale. All those mines are higher cost producers. This is absolutely the time now to basically divest or joint venture some of these smaller assets out to other people. So how do we balance our approach to capital? It's really return on investment with a view of, okay, this $1 in this asset, can this generate $1.50 of return?

6:12 If it can only generate $1.10 worth of return, well then obviously that asset starts to move down our list of priorities. And a key point about this whole divestment program is, I mean, the portfolio we've got now, 3,200 square kilometres of Western Australia, we've got 3 underground mines on care and maintenance. 2 of those would effectively be project starters or would be cornerstone assets in a much smaller Gold company. We have the ability now to join venture or divest some of these things, which will start bringing new producers into the Australian market. If we can assist

6:51 an explorer who wants to become a producer by handing them or divesting them an underground mine and also giving them a milling solution, that's good for both groups of shareholders. And case in point, for those new to the West Gold story, we did a very, what I think is a pretty clever commercial deal with an ASX company called New Murchison. Really good explorers.

7:16 We gave them the opportunity to get access to our processing infrastructure at Mekithara. So literally that Crown Prince mine, they're mining high grade there now. First ore from Crown Prince to Mekithara will be in the next quarter. And so for them as a small company, all they've had to focus on is mine development. They haven't had to go down a path of trying to develop a new mine, a new camp and a new processing facility, which the level of complexity with that and the time to approval is very long. So I think the opportunity around some of the divestments that we've got, potential divestments in the pipeline is to provide a better pathway to production for others, of which the ore is most likely going to come back to one of our processing facilities.

8:02 To me, that's a win-win scenario for 2 groups of people. We've got Sunk Capital, our processing plants. We've got 4 large processing plants. If we can have a different stream of ore coming to those mills, mined by other people to supplement the ore that we mine. I think that's all about lifting the grade to these mills and lowering our costs. So anyway, this divestment and JV concept is very live and it's all about trying to uptier the package. What we really want is larger processing plants and larger mines. And where we have a multitude of sort of mid-scale mines, if they don't quite fit our metric, those ones and someone else can do them more competitively, great. Happy to help them out to do that, particularly if we bake in all purchase agreements where the all comes back to our sump capital.

8:56 Great, that makes sense to me. I got a technical question here. So I know the transition from transverse to longitudinal open stoping at Bluebird South Junction represents a pretty significant technical shift. So just looking at your view on if you could elaborate on what drove the decision beyond ground conditions and how the experience might influence mining approaches at your other underground operations?

9:20 It's a really good question. In our Murchison business, the Bluebird South Junction mine is pretty much now the engine room of the Murchison. This mine is something which we still don't know how big it is. We keep drilling it and it keeps getting bigger. Case in point, when we started this mine as an underground operation, it was producing around 250,000t per annum. A pretty simple long hole open stoping operation from what we call Bluebird. We kept drilling this thing. Bluebird, the side of the mine, kept getting bigger. We got it to half a million tonnes per annum.

9:53 We started to drill and we started to infill the South Junction side. And think about this mine of having 2 legs. The bluebird side, sort of a narrower, higher grade zone, and South Junction side, much wider slopes up to 30m wide, sort of still lower grade, but sort of around 3g. Think about bluebird is 4 to 5, South Junction 3 to 4.

10:17 The issue we've got with this mine, we keep drilling and it just keeps getting laterally bigger and it's open at depth. So really the transition in the mining method, or the mining method we use in the narrow side of the mine, narrow 6 to 7m in the Blue Bed side, was probably not the right approach for the South Junction side. So what we can see is that the base load from this mine long term or in the immediate term will come from South Junction.

10:45 The change to mining method there is really about ensuring certainty about that tonnage and trying to knock out some of these variations which our previous mining method was giving us. But yes, Bluebird South Junction currently has 2 mining fronts and there's a third mining front that which we've been drilling called Polar Star, which again, this Polar Star load, and this is a set of stacked loads, we still don't know how big it is. So, and the real risk in these businesses is, and we've done it, we've been guilty of this, we've rushed into ore bodies too quickly without enough drilling. And then you're in an underground mine, you put in your capital infrastructure where you think it should go, you keep drilling and then you go back and go, maybe should have put this infrastructure in a different place. Bluebird South Junction is so critical to the business. We're continuing to drill South Junction and Polar Star, but this thing next stop, 1t-1.2t per annum of output.

11:46 What we want is consistent output, And that's been a criticism of West Gold in the past. Our mine outputs have been quite erratic. And a lot of that is directly driven by not having enough drilling into them or trying to execute too quickly. So in Bluebird, South Junction now, the level of drilling is accelerating. Our output is now steadily creeping up

12:10 to be sustainable, not these erratic things, which trying to manage a business like this with an erratic mine output directly knocks on to erratic financial output. And that's what we're trying to do. We're trying to become a more consistent producer

12:28 around fewer bigger mines and much larger processing plants. That's really the key. A simpler business with less moving parts, centred around big underground operations, Beta Hunt, Bluebird South Junction, Big Bell, Starlight, supported by medium-scale, high-grade mines. Things like Great Fingal, which we'll talk about when the market will see more from Great Fingal over the next few quarters. So, simplistically that's the business. We've got currently 4 processing plants, 6 underground mines running with a seventh to start. What we'd like is fewer, larger underground mines which generate more output at a lower cost and that underpins a business generating much higher margin.

13:18 Great. I do know that despite record production, my understanding is you missed the lower end of the FY25 guidance due to trucking issues at Beta Hunt and some development delays. What operational improvements are you implementing to ensure that

13:30 more consistent delivery against guidance going forward? Look, you're right. We missed the bottom end of our guidance by about 1%. A lot of that was driven by the fact we had to stand down our trucking fleet at Beta Hunt late in the quarter. The underground trucking fleet there was much older than the equipment that we were running in the north. This equipment, I won't name the supplier or the brand, let us down significantly in the last quarter. And we were so close to this bottom end of our guidance. A 1% miss is still a miss. So what have we done? That older trucking fleet now has been parked up for

14:09 probably about 6 weeks and now that underground fleet has been replaced with newer, more efficient equipment so we can have more certainty about the sustainability of our haulage outputs from that mine. So that really hurt us. And when we think about a trucking fleet in this mine, The trucking fleet in Beta Hunt is 10 to 11 trucks. It was constrained during the last quarter where I think the most we could run was maybe 6 to 8 on some days, either due to reliability of the equipment or ventilation. Ventilation in these mines, certainly at Beta, has held back its productivity. Happy to say now both the trucking fleet is replaced and the issues around ventilation now have been removed.

14:56 So we're feeling, we're seeing good performance out of Beta Hunt And again, it needs to be steadily increasing, not this sawtooth graph, which knocks onto our financial results.

15:09 Great. No, good to hear. And I know with $270 million in non-sustaining CapEx planned for FY26, but a strong balance sheet of $364M in cash and investments. How are you looking at capital allocation between growth acquisitions and returning capital to shareholders?

15:24 A great question, actually. I mean, in terms on the capital side, we have effectively got 2 development projects in the business. Our Great Fingal mine at Day Dawn at Kew is just about to start production. It won't get to commercial production until the new year, but we are effectively handing this high-grade mine off to a contractor, Barminco, which they're on site now and will start in earnest in September. There's still capital to spend on Great Fingal to get it to steady state, and the steady state will be in sort of calendar 26. The other big capital project is still Bluebird South Junction. This mine, as I said, keeps getting bigger. The South Junction side is required more capital development and improvement or increase in ventilation. And that's where the capital is going.

16:14 Back to your question about how do we think about capital in the business or really around, you know, all of these assets compete for capital. The good thing is West Gold has the free cash flow to fund these things. I mean, ideally,

16:30 2 development projects at the same time is not ideal. Fortunately for us, Great Fingal is further ahead than Blue South Junction, so it sort of moves off. The risk around execution there will diminish as Barminco start to ramp that up in the second half. In terms of M&A, we're very much on the other side of that. We call it M, A and D. We're in the divestment phase. We're 12 months on post the merger of Karora And look, as I said, no buyer's remorse at all. Karora assets were fantastic and we're starting to show the market, the market is starting to get a glimpse of just how good and how big Beta can be.

17:14 So really the next 12 months for us, you know, is about let's tidy up the portfolio. The portfolio is big. Some of these smaller targets, like I said, we've got 3 underground mines on care and maintenance. They're sitting there and they cost us, standing still costs money. If one of those mines can be handed off to a third party and they want to start mining, and that all comes to us without our management sitting on top of it, look, that's a model that I really like. And we've already running that model with new merchants, and it's a model I think we can deploy elsewhere across the portfolio. So next 12 months, divestment is the key. You know, the business in many instances or many areas, hopefully what people are starting to see is an evolution in our operating model.

18:04 That our outputs should become more consistent as we're starting to mine these ore bodies better, but also as our approach to capital and capital returns. I'm really happy today that the board signed off on a 3 cent per share dividend, which was, you know, with the year that we had, which was a transformational year, that was a significant uplift in our dividends. More importantly, also the board, in a signal that they are confident about the plan, approved a share buyback, which for North American investors, that's a very important

18:38 signal about how we're thinking about the business. So, dividend and share buybacks appeal to 2 different investors. Australian investors very much like the dividends. North Americans very much it resonates more when we speak to share buybacks. The business now has evolved to a point where we can consider both options.

19:01 Great. I do want to talk about ASIC for a second. So I know your guidance of $2,600 to $2,900 per ounce for FY26 obviously reflects the current cost environment.

19:11 How is West Gold generally managing inflation pressures across labour, energy, consumables? Look, it's a great question. And you know, for people not sitting in Australia now, that $2,600 to $2,900 Australian an ounce, certainly every Australian gold producer that who are our peers are seeing their oil and sustaining costs lift. Cost of labour here is all high. I mean, it's probably more plentiful, but the cost of labour post COVID certainly hasn't dropped. A lot of the Aussie businesses, maybe, I don't know, most of our Australian peers run a business model which we call hub and spoke. The processing plant being the hub, multiple mines as spokes feeding these hubs.

19:58 We've got 4 hubs and we've got multiple spokes. And one of the key points is that haulage cost from a remote mine to back to the hub is one of the places we've seen the highest inflation in our business. Case in point, we are hauling within the Murchison, we are hauling ore from our queue operations

20:19 back to our Minkathara operations. That's a haulage distance of 120 kilometres. That's really, it's not the longest haul in Australia. Some people are hauling over 200 kilometres but this is one of the functions which is driving our cost base up. How do we fix it? We have bigger hubs and shorter spokes. So when we get to the point soon, and this is what Bluebird South Junction is about, Bluebird South Junction over the next 12-months will get to a point where it can feed the Mekithara hub. It can underpin that production. Bluebird South Junction is about 600m from the processing plant, but because that mine has been slow on its ramp up, we've had to haul ore from Kew back to Mekitharra.

21:06 120 kilometres, an expensive haul, that's what's been driving our costs up. So what investors can start to expect is, as the grade starts to come up in our processing plants, our outputs will increase. And as our mine outputs lift, we are less reliant on tramming or trucking or long distances. And once you, it'll be evident in our costs, once our costs start to fall, that this component of haulage in our business is starting to shrink. So yeah, so Romeo, that's been something which is hurt a lot of the Australian producers who run this hub and stroke model, because haulage often is not a component which we manage. It's we don't own our own trucks for road haulage. It's a third party supply.

21:56 And you have to pay a margin on that function. But that's probably been one of the biggest cost escalators in the business over the last 12 months. I appreciate that. I want to talk about Fletcher Zone really quickly, because I know that maiden resource of 2.3Moz from just 1km of 2km strike is very impressive. What's your development philosophy for that asset and how are you sequencing exploration versus development for cashflow? Yes, look, a couple of people love to talk about Fletcher. Look, we were absolutely blown away. Our expectation around that 1km of the 2km zone was that we'd find, we told the market, our expectation was that within that 1 kilometre, we deliver 800 to a million ounces of resource.

22:42 We delivered 2.3, it was like, wow, this thing is far, This thing is far better than we think, and we've only drilled half of it. When we announced it into the market here, it was like it just sort of hit the market, nothing happened. And we're like, oh, wow, we must have really written that release badly. But it's a slow burn. I think we've had an analyst visit to Beta Hunt recently, and the penny is starting to drop. This thing is a cracking ore body, which is big, and we've only drilled half. So the sequence of development really looks like this. We're back in there drilling the second kilometre of Fletcher. We're also infilling the first kilometre, but it just keeps getting bigger.

23:27 I think as a corridor, it's 200m wide, there are multiple zones within it. But our risk is here that if we rush into it too soon without the right amount of drilling, we'll put the infrastructure in the wrong place. So I really see this as sort of 6 to 12 months of infill drilling of Fletcher now, infill and extensional, to really quantify the size of the prize, because our expectation was the size of this prize was 1Moz. That drilling gave us 2.3. We drilled the other clock now, it's a 4Mt zone, a 4Moz zone. It's possible. So in the next 12-months, absolutely. Currently today I think we have 9 drill rigs at Beta Hunt.

24:14 Obviously all of them are underground. The bulk of them are into Fletcher, Mason, Western Flanks and Larkin. So we've not slowed down our drilling at all. But yeah, watch this space. Fletcher is not going to get smaller. Great. I want to talk about hedging strategy. I know West Gold remains 100% unhedged, which obviously in this cost or gold price environment is hugely beneficial. But how are you evaluating the ongoing risks of that strategy as you scale up production? And again, just reaching from my phone for the offshore investors, Australian Gold today is AUD$5,203. We sold Gold on Monday, I think we sold it at AUD$5,225. These are Aussie dollars, but these are numbers which still in my lifetime I never thought I would see.

25:04 So our approach to hedging in some sense is really straightforward. Every Australian Gold producer is a price taker. Nothing we can do to affect the price. We can make a decision about the price and we can hedge and for, you know, as soon as you do that, well, the price is going to go up or down. So we look at the gold price every day and go, fantastic, that's not something we can control. Our best hedge in this business is really to focus on our costs. That's something we can control. And, you know, we're still, our cost base is still higher than we'd like. We're very much working on simplifying the business and making it more efficient, focusing on grade, not volume, and that will drive our costs down. So simplistically, our approach to hedging is our best hedge is to make sure we are on top of our costs and continuing to drive costs out. So we were going to remain unhedged because we're fully funded to do everything we need to do. We don't have any major capital projects, major capital projects in the house which requires us to hedge.

26:09 And even the debt facility which we have, which is undrawn, there's no mandatory hedging within that. So that, when we cut that deal with our banking syndicate, it was a little unusual for some people because we were in a really strong position. We said hedging is not something we want to do. So we have access to, as we sit here today, another $250 million of capital where if we drew on that capital, there's no hedging associated. So we're in a really strong position. Great. Now, there's time for about 2 questions from the audience. I'm just going to grab 2 and then I'll let you go for the day, Wayne. I'm halfway through my day, Romeo, so don't worry, I've got plenty in front of me. Yeah, fair enough. Now, David from the chat asks, while we're on hedging, does Westcold anticipate a window of time now or in the future where long term fuel hedging might become increasingly important?

27:01 Great, great question. In a previous, well, previous management in the business did hedge fuel and got it wrong. And that was at a time whereby they hedged fuel and they hedged gold and the price went against them on both. So in respect to hedging fuel, what we really did 3 years ago was, how do we reduce our exposure to oil? What we did, we basically converted all of our processing plants to hybrid energy, which was gas and solar. So back in those days when we only had the Murchison, I think our diesel consumption every month was, I think 8 and a half million litres of diesel a month. And that was our processing plants, all our underground fleet. We converted to hybrid energy back then.

27:49 It dropped our diesel consumption down to about 2.5Ml a month because processing plants were then on gas and solar. The only thing that was consuming diesel was our underground fleet. We bolted on the Southern Goldfields assets and the processing plant at Higginsville is currently on diesel, so our consumption has gone up. But the next step is always thinking about how do we reduce our exposure to diesel and that price? In the Southern Goldfields, it's about putting Higginsville onto a gas and solar, exactly what we did in the Murchison to reduce our exposure to that consumable. I appreciate that insight. Great question, Great question. I mean, this is, you know, this is not, we watch that price, but you know, our exposure to it now, it doesn't drive, it's not a big component of our operating costs.

28:45 So it's not, doesn't sort of consume too much thought time. No, it makes sense. And I can see certainly being traumatised by both gold hedging and fuel hedging going against you in the past. Fortunately, I wasn't here then, but I'm sure there would have been a lot of interesting, robust discussions around the boardroom table about, wow, we thought the price is going to be this and it's that. So yeah, hedging, financial engineering is something we stay away from, You know, we'll just focus on the oil bodies and costs. And if we get those 2 things right, the rest takes care of itself. And I appreciate the philosophy. Last question. Ganesh from the chat says, good to see you love the focus on safety and efficiency and focus on core strengths. When do you see exponential free cash flow and where do you see the next positive catalysts and potential surprises coming from?

29:38 Look, I see financial year 26, the expectations we've set in the market are quite modest. You know, because we missed guidance last year in some sense, that was very scarring for all of us. We are absolutely committed to basically delivering or beating our guidance this year. You know, we can see we've got high-grade feed coming into our business through Great Fingal, something we own. We'll start to see that in the next quarter. High-grade oxide ore coming from third parties, from Crown Prince starting in the second quarter. All of these, many of these things, we've taken a conservative approach and we've not baked them in completely to our guidance. So I think FY26, with all the things we've got, 1, we're still going to spend US$50M on exploration because we know we can add value quickly with the drill bit. We can move Great Fingal into commercial production during the year and Bluebird South Junction will start to be a consistent producer. So I think, you know, our expectations and choose your own Gold price.

30:44 If you ask me what the Gold price is going to do, I'd say, I don't know. But every day I wake up at 5, as an Aussie Gold producer, we go, okay, that's a good number. But I think this is going to be a strong year for cash flow. Some of the capital we invested over the last 3 years is now starting to literally pay dividends in terms of higher throughputs in our mill, higher throughputs from our mines or higher grade, which has been defined from our drilling. So, yes, this would be, this year, FY26, a much stronger cash flow and financial performance than last year because last year we effectively doubled the size of the business. We knew we were going to have to spend some capital across the business to stabilise it and for it to grow. And people got a glimpse of that in the last quarter's numbers.

31:36 Awesome. Well, Wayne, thank you so much. Really appreciate your time this morning running through all these questions. And for those in the chat, thanks so much for joining us. I know some of you are joining at all hours of the day or night, So really appreciate your time. All the questions that we didn't get to today, I'm going to make sure the West Gold team gets them. And this replay will be available in short course just probably a few hours from now. Wayne, thank you so much. This is great. Really appreciate your time. Always happy to chat. Thanks for everyone who who patched in. Stay safe.