Westgold Resources Limited has committed to a capital-light expansion of its Cue processing hub, increasing throughput from 1.4 million tonnes per annum to 1.7 million tonnes per annum by FY28. The expansion plan involves a $22 million investment with a payback period of just 10 months, demonstrating the operational leverage available from existing assets.
The expansion itself is modest in scope but material in return. Westgold will upgrade the Cue mill by replacing the existing motor (2.9MW) with a higher-capacity liquid-cooled unit delivering 4.2MW, alongside variable speed drive installation and associated system upgrades. This debottlenecking approach increases milling circuit throughput from 170 tonnes per hour to 200 tonnes per hour. Commissioning is scheduled for late FY27, positioning the hub for the expanded 1.7Mtpa run rate from FY28 onwards.
The production uplift translates to approximately 15,000 ounces of additional annual gold output from Cue once the expansion is commissioned. The scoping study estimates life-of-mine gold production between 1.1 and 1.3 million ounces at an all-in sustaining cost range of $2,916 to $3,564 per ounce. At gold prices of $5,500 per ounce, the NPV of Cue improves by roughly $400 million, underscoring how significantly the expansion enhances asset value at prevailing commodity prices.
The expansion is underpinned by increasing ore volumes from Big Bell and Great Fingall underground mines, which are ramping production to feed the higher mill throughput. Westgold is already operating small open pits near Cue and has commenced brownfields drilling at Big Bell South and Cuddingwarra, targets located within approximately 50 kilometres of the hub. The company notes potential for third-party ore via existing purchase agreements and additional upside from the Fender underground mine, which contributes roughly 0.2Mtpa. This layered approach to ore supply provides production security while creating multiple pathways to achieve the 1.7Mtpa target.
The announcement reflects management’s deliberate strategy to shift towards processing hub optimisation rather than greenfield development. By upgrading existing infrastructure with modest capital, Westgold aims to lower operating costs and improve cashflow generation. Investors should monitor detailed engineering and procurement progress over the coming months, the outcomes of the brownfields drilling program particularly at Big Bell South and Cuddingwarra, and whether additional ore sources materialise as expected. Successful execution could position Cue as a higher-margin production centre within Westgold’s Murchison operations. This announcement has been flagged as price sensitive and material by the ASX.
View the full ASX announcement (PDF)
About Westgold Resources Limited (ASX: WGX)
Westgold Resources Limited is an Australian gold mining company that explores, develops, and operates gold mines in Western Australia. The company operates mining facilities across the Murchison and Southern Goldfields regions and recently expanded its operations through the acquisition of Karora Resources. Westgold is listed on both the Australian Securities Exchange (ASX) and the Toronto Venture Exchange (TSX).
If you would like to discuss this announcement or how it might affect your portfolio, request a callback or call us on 1300 889 603.
