Westgold Resources Q2 FY26 Earnings Call - Record Cash Build and Gold Production with Debt-Free Balance Sheet

Steve, Call Moderator, Westgold Resources: Hello, and welcome to the Westgold Resources December 2025 Quarterly Report Call. Our presenter today is Wayne Bramwell, Managing Director and CEO. We’ll answer questions at the end of the presentation, but you can type them and submit them at any time. Over to you, Wayne.

Wayne Bramwell, Managing Director and CEO, Westgold Resources: Thank you, Steve, and hello to everyone on the call. Thank you for taking the time to dial in today. With me on the call, I have Aaron Rankin, our Chief Operating Officer, and Tommy Heng, our Chief Financial Officer. I’ll provide a quick overview of what has been another record quarter for Westgold before handing over to Tommy and Aaron to discuss the financial and operating results. Let’s get into it. Slide four. Our second quarter features a record cash build, record gold production, and we achieved a record gold price. Let’s unpack that. How did we achieve this? In Q2, we generated an underlying cash build of AUD 365 million, double the AUD 180 million underlying cash build of Q1. Our treasury includes cash, bullion, and liquid investments.

This increased by AUD 182 million for the quarter, net of several items, including the repayment of a modest AUD 50 million drawn debt against our corporate facility. This is now closed out and sees us debt-free. We paid AUD 76 million in stamp duty on the Carrura transaction. That’s a one-off payment. Our recent dividend and share buyback costs of AUD 29 million was an outflow. We also saw outflows of investments of AUD 60 million in our key growth projects and AUD 6 million on exploration. Inflows for the quarter included proceeds from the final payment on the Lakewood transaction of AUD 25 million, plus AUD 1 million received from Alicanto as a deposit on the Mount Henry Selene transaction. Pleasingly, we closed the quarter in a very strong financial position with AUD 654 million in cash, bullion, and liquid investments.

Importantly, we produced 111,000 ounces of gold during the quarter at an all-in sustaining cost of AUD 3,500 per ounce, and we realized a record achieved gold price of AUD 6,356 per ounce, just shy of AUD 3,000 above our all-in sustaining costs. Importantly, excluding the gold price link cost of our OPA, our all-in sustaining cost for our production was AUD 2,945 per ounce. I’d like to note that while our OPA has a higher gold price link cost attached, we elected to maximize the volume of soft high-grade ore purchase during the period. This was a strategic call to deliver increased cash flow, and it achieved that. Slide five, the waterfall chart. Effectively, we have achieved a net increase in liquidity of approximately AUD 290 million for the year to date.

Our strategy is about building cash as cash is king, and we’re happy to see our strategy delivering the cash builds we desire. The balance sheet strength gives us flexibility and optionality in this business and provides the financial horsepower to deliver the three-year outlook and investigate options to bring value forward for our shareholders. Slide six, a quick recap on our three-year outlook. We’ve developed a clear roadmap to increase our gold production from 326,000 ounces in FY25 to 470,000 ounces from FY28 at an all-in sustaining cost of around AUD 2,500 an ounce. This high confidence executable baseline is predicated on organic growth opportunities at our existing operations underpinned by proven resources.

It is essentially a mine-grade upgrade and mill optimization strategy that will see us invest sensibly in our mines and mills to allow us to maximize and better match our milling capacity with higher-grade ore sources, replacing lower-grade sources to produce more gold and at a higher margin. You may recall this plan excludes a number of upside opportunities which are already in train and which we will seek to bring forward into the three-year period. During the quarter, we maintained a laser focus on the plan framed in the three-year outlook. I’ll let Aaron talk in more detail about our operational performance for the quarter, but in the context of our three-year outlook, pleasingly, we are already seeing progress. Our investment in mine infrastructure at Beta Hunt allowed greater development during the quarter.

This development sets us up to sustainably ramp up the mining rate towards 2 million tons per annum and potentially access new mining areas. We fired the first stope of Great Fingal during the quarter, a key milestone in our high-grading transition tactic playing out at the Cue hub. Likewise, the high-grade stope of Starlight delivered great results at Fortnum that will upgrade the mill feed to this hub. Slide seven. Importantly, our operations are performing as planned, and we’ve focused on delivering our three-year outlook, and this discipline is already improving our outputs. We maintain our sure and steady outlook in terms of this three-year outlook. We maintain a conservative estimate for third-party ore purchases going forward as we don’t control mining of those ores.

And so we maintain our production and cost guidance for FY26, confirming we expect to produce around 365,000 ounces for the period, being the guidance midpoint, and an All-in Sustaining Cost of between A$2,600 and A$2,900 excluding the Ore Purchase Agreement ore. Before I hand over to Aaron, I just want to touch on our safety stats. I’m disappointed to report that our TRIFA trended in the wrong direction in Q2, with a rate of 9.32 reflecting an increase in reportable hand injuries. While this outcome was partly the result of our increasing focus on safety governance and reporting, this is the first time this indicator has increased since FY23, and our entire leadership team share my very clear commitment to do all we can and must to turn this metric back in the right direction. The safety of our people is non-negotiable.

We’re certainly investing time and effort into better reporting, and with better reporting, we’re getting better statistics, and that allows us to make better decisions in the safety area. I’ll hand over now to Aaron to share some insights into our operational results for Q2.

Aaron Rankin, Chief Operating Officer, Westgold Resources: Thank you, Wayne, and moving to slide nine. Here we show our continued improvement in operational performance. In the quarter, we benefited from the addition of oxide ore from our OPA. Bluebird underground continued to ramp up to plan. At Fortnum, we benefited from strong underground performance and the grade in the Galaxy area of the mine. Our costs were slightly up on the gold price linked OPA and the ramp-up preparatory works in the Southern Goldfields, including increasing development rates. Slide 10. This shows more detail on our underlying group performance. Our mines and plants are performing well, and grade is up. Slide 11, the Murchison. Our three hubs all outperformed our plan and improved quarter on quarter. Meekatharra was the standout. Our team adapted quickly to the available oxide material for the blend, lifting plant throughput by more than 30% and lifting recovery to 95%.

Fortnum continues to surpass our expectations with strong mining production, grade up, and strong processing performance, leading to a more than 6,000 ounce lift quarter on quarter and tracking ahead of plan for the year. Cue also improved, and we celebrated firing the first Great Fingal reef stope, as mentioned by Wayne. This strong performance led to AUD 196 million in net mine cash flow for the Murchison region. Slide 12 shows our updated level layout that is unlocking performance at Bluebird. We have cracked the code on managing the Bluebird ground, and we are delivering to the plan. Slide 14. Southern Goldfields production was steady as we expected. Importantly, our development, our leading indicator for production, is lifting month on month. Mining production is lifting, our infrastructure is in place, we have stockpiles building, and we are set up for further increases in Q3.

In summary, operations at Westgold are performing strongly, we’re going well, and we’re continuing to improve. I’ll now hand over to Tommy.

Tommy Heng, Chief Financial Officer, Westgold Resources: Thanks, Aaron, and hello to everyone on the call today. On to slide 16. Strong cash generation positions us exceptionally well to fund growth, absorb volatility, and continue delivering strong returns to shareholders. I’ll touch on the highlights. Our bullion sales were up 21% quarter on quarter on a higher production, and at the end of the quarter, had AUD 49 million in closing bullion inventory. Our realized gold price increased to AUD 6,356 an ounce, giving us a very pleasing margin of AUD 2,856 per ounce. Importantly, Westgold remains fully unhedged, a position we don’t envisage to change anytime soon. Our quarter on quarter all-in sustaining cost increase related primarily to higher development at Beta Hunt, which readies us for our growth strategy at this operation, and of course, our ore purchase strategy to drive cash generation, as Wayne outlined.

The strong margin of AUD 2,856 per ounce realized on our higher sales volume for the quarter effectively doubled our net mine cash flow for the period. Furthermore, we reasonably expect our margin to further improve in the second half of FY26 with lower costs as our operating strategy continues to play out and with a number of major one-off cost items having already been disposed. I’ll speak to our cash flow on the following slide. Slide 17. We built AUD 182 million in cash, bullion, and liquid investments this quarter, closing with AUD 654 million on hand. The underlying cash build for Q2 of AUD 365 million before the one-off items, as already outlined, eclipses the entire FY25. On capital allocation, we invested AUD 48 million in non-sustaining capital and continued our investment in exploration and resource definition, investing AUD 6 million over the quarter. We finished the quarter in a strong position.

Our balance sheet is exceptionally healthy with AUD 654 million in closing cash, bullion, and liquid investments, ensuring we are well funded to execute our growth strategy. And importantly, we are debt-free with the repayment of the AUD 50 million debt drawn in FY25. Slide 18. Before I hand back to Wayne to wrap up, I would like to touch on the continuing shareholder return that Westgold is committed to. We declared an AUD 0.03 per share final dividend for FY25 and have upgraded our dividend policy for FY26 to reflect our growing confidence in the business. In addition, we’ve launched a 5% on-market share buyback program, a clear signal of our belief in the value of our shares and our disciplined approach to capital management. These initiatives are underpinned by strong cash flow generation and a robust balance sheet, positioning us to continue rewarding shareholders while investing in growth.

We paid AUD 28 million in dividends during the quarter and commenced on the on-market share buyback. With that, I’ll hand back to Wayne.

Aaron Rankin, Chief Operating Officer, Westgold Resources: Thank you, Tommy. What a fantastic set of numbers. Let’s jump straight to slide 20. To streamline our portfolio and focus on high-margin scalable assets, we have started the asset divestment process. During the quarter, we announced the sale of the Mt Henry and Selene project to Alicanto Minerals Limited for a total consideration of AUD 64.6 million, comprising AUD 15 million in cash, AUD 19.6 million in Alicanto scrip, and up to AUD 30 million in deferred consideration. It’s worth noting Alicanto scrip is now almost triple the transaction issue price, and we as Westgold will share in Alicanto’s success through our strategic shareholding. The transaction is consistent with our strategy to unlock value from assets that would otherwise remain dormant within our greater package. To that end, we continue to progress the planned divestment of Peak Hill and Chalice, which, like Mt Henry and Selene, are assets that sit outside of our longer-term plan.

Slide 21, Valiant Gold. This really excites me. We are demerging our non-core Reedys and Comet assets in the Murchison into a new, soon-to-be ASX-listed called Valiant Gold. Like the assets on the previous slide, Reedys and Comet are assets that have value but are under scale and don’t feature in Westgold’s longer-term plans. Their proximity to each other and to our processing hubs lend themselves to become a great value generator under a smaller, focused, well-funded management team. Valiant will raise circa AUD 65-$75 million in an IPO with a AUD 20 million priority offer for eligible Westgold shareholders. Following the raise, Westgold will retain a 44%-48% cornerstone equity position in Valiant. As part of this transaction, we are seeking to enter into an ore purchase agreement with Valiant, providing them with a fast-track pathway to cash flow.

I think of this as an analogue to the most recent deal we’ve done with New Murchison, where an independent team mines and sells all to us, and Westgold processes it. So far, that’s working fantastically, and we expect the same outcome from Valiant. Slide 22, final slide. For Westgold, in the second half of FY26, it’s all about building cash, and from these numbers, it’s clear the cash doesn’t lie. Westgold is debt-free, unhedged, and momentum continues to build. If you’re not investing in Westgold, check it out. There’s a lot more ahead. Thank you for your time today. Now, straight to questions.

Tommy Heng, Chief Financial Officer, Westgold Resources: Okay. Our first question is from David Gay. Are there any plans for an uplisting of shares in the U.S. market for Wayne?

Aaron Rankin, Chief Operating Officer, Westgold Resources: Thanks for the question, David. No plans at this stage.

Tommy Heng, Chief Financial Officer, Westgold Resources: Okay. Your next question comes from Douglas McFarland. What was the stock build at Beta Hunt? Aaron, that might be one for you.

Aaron Rankin, Chief Operating Officer, Westgold Resources: Yeah. Thank you, Doug. Stockpiles at the end of the half at Beta Hunt and Southern Goldfields sit at circa 150,000 tons.

Tommy Heng, Chief Financial Officer, Westgold Resources: Your next question comes from Lawrence Hill. The guidance set in August for the ore purchase was between 15,000 and 30,000 ounces for the year, with approximately 25,000 already in the ore purchase. If this lifts, will guidance lift for Beta Hunt?

Aaron Rankin, Chief Operating Officer, Westgold Resources: Yeah. Thank you, Lawrence. I’ll take that again. So we’re maintaining a conservative approach to our OPA. In particular, the first quarter saw the easier oxide ore come to our mill. So with the OPA that we don’t control, there’s a conservative outlook. And a lot of things went right for us this quarter with our own internal business. So we are maintaining a conservative outlook and maintaining our guidance, as Wayne stated.

Tommy Heng, Chief Financial Officer, Westgold Resources: We’ll pause now to allow people to enter in some more questions if there are. Right. The next question comes from Paul Kaner. Just on the OPA, what additional benefits are you realizing here from processing this material?

Aaron Rankin, Chief Operating Officer, Westgold Resources: Thank you, Paul. Aaron, I’ll take that again. So there are numerous benefits from this oxide ore from Crown Prince. So our throughput was up over 30% at Bluebird Mill for the quarter, and our OPEX was significantly more than 25% in terms of that mill with that blend.

Tommy Heng, Chief Financial Officer, Westgold Resources: Wayne, the next one is for you. What is the plan for the cash being collected, and how do you plan to leverage for future value development?

Aaron Rankin, Chief Operating Officer, Westgold Resources: Thank you for that question, Ganesh. As we’ve said, it’s all about building cash this year to give us maximum optionality over shareholder returns and reinvestment into the organic growth opportunities we have within the group.

Tommy Heng, Chief Financial Officer, Westgold Resources: The next question is also from Ganesh. Would Canadian investors on the TSX have the opportunity to invest in Valiant?

Aaron Rankin, Chief Operating Officer, Westgold Resources: Kasun, you take that one. At this stage, no. No, the Valiant will basically be restricted to ASX holders.

Tommy Heng, Chief Financial Officer, Westgold Resources: Thanks, Wayne. Next from Hugh Maxwell. How will drilling at Fletcher and Mason be seen since the last update?

Wayne Bramwell, Managing Director and CEO, Westgold Resources: We’ll hand that question to Simon Rigby, Chief Growth Officer.

Simon Rigby, Chief Growth Officer, Westgold Resources: Thank you, Wayne. So on the Mason front, our extensional target south of Fletcher, we have one rig operating on about hole three, working our way through a six-to-eight-hole program. So more information will come on that in the next quarter. In terms of Fletcher, the ongoing program for infilling stage one to convert resource to reserve is underway, along with the first parts of stage two, which is the northern extension of Fletcher. So that drilling will sort of accelerate a bit more as we go into H2.

Tommy Heng, Chief Financial Officer, Westgold Resources: The next question is for you, Aaron. Great Fingal, can you please guide on the mining rate and ounces for the rest of FY26?

Aaron Rankin, Chief Operating Officer, Westgold Resources: Thank you for the question. So Great Fingal, for the remainder of this year, will be patchy on our production. So we’re looking forward to FY27 to see some consistent output. So we’ve been fairly conservative on Great Fingal as we’re mining up against the old workings. As we open up work areas into FY27 is when the consistent production out of Great Fingal will start.

Tommy Heng, Chief Financial Officer, Westgold Resources: Okay. Following question from Sudhanshu as well. Starlight, can the grades seen in the financial year for Q2 be expected to continue in the rest of FY26? Aaron?

Aaron Rankin, Chief Operating Officer, Westgold Resources: Thank you. Yeah. Look, so Starlight had a cracking quarter on grade, and no, we don’t expect it to sit at that over three-gram level. We have seen steady increases on prior quarters, and we do expect it to be above what it has historically produced. But no, the Q2 was a fantastic quarter for Starlight, and based on a specific mining area that had higher grades.

Tommy Heng, Chief Financial Officer, Westgold Resources: The next one from Paul Kaner. The mining rates at Bluebird, how is that tracking to your longer-term target, and when will you get to this run rate? Aaron?

Aaron Rankin, Chief Operating Officer, Westgold Resources: So thank you again. So yeah, Bluebird’s going really well. What we’re seeing is our development is outperforming our expectations, and production’s pretty much bang on where we want to be. So we are ramping up, doing that in a steady, systematic fashion, and we expect to exit FY26 into FY27 at that sort of million-ton-a-year run rate.

Tommy Heng, Chief Financial Officer, Westgold Resources: Next question from Gregg Osmond. How much gold in reserve does the company hold currently, and how long will this last? I think it’s a question on mining.

Aaron Rankin, Chief Operating Officer, Westgold Resources: I’ll take that. Each of these mines now have extensive mine life in front of them. But as a group, our last report, we reported 3.5 million ounces of reserve for the company on last year’s production of 326, circa 10 years of reserve life. But we are building that reserve every year through drilling.

Tommy Heng, Chief Financial Officer, Westgold Resources: Another question on guidance from Kevin. Just want to make sure I’m understanding this correctly. FY26 production guidance includes the OPA, but AISC guidance does not. Thank you. I’ll take that. Sorry. I’ll send that to Tommy.

Simon Rigby, Chief Growth Officer, Westgold Resources: Thank you, Kevin. The FY26 guidance remains, and it includes what we have said was the OPA between 15 and 30. In terms of the cost, the cost we’ve done already, 25,000 ounces from the OPA. So from here onwards, it has to exclude the OPA, our guidance cost.

Tommy Heng, Chief Financial Officer, Westgold Resources: Okay.

Simon Rigby, Chief Growth Officer, Westgold Resources: What was it?

Tommy Heng, Chief Financial Officer, Westgold Resources: The next question comes from Adam Baker. How many ounces of the OPA material are expected in the second half of FY26?

Aaron Rankin, Chief Operating Officer, Westgold Resources: Yeah. Thank you, Adam. I’ll take that. As mentioned, maintaining a conservative approach on our view of the Crown Prince mining that we don’t control. We are expecting that to drop off significantly from what we saw in Q2 with the trend moving from the pure oxide material into transitional and fresh, and the mining rates at Crown Prince slowing down as that pit gets deeper.

Tommy Heng, Chief Financial Officer, Westgold Resources: The next one from Chris Whipple, can you please talk to any trends and changes in general industry operating costs, labor availability, consumable inputs?

Simon Rigby, Chief Growth Officer, Westgold Resources: Thank you, Chris. The one, obviously, is the glaring one: the increase in the gold price and royalties. So that’s going in tandem with the gold price. That will be one not within everyone’s control. That will be the key one.

Tommy Heng, Chief Financial Officer, Westgold Resources: The next question comes from Chris Freeman. Do you intend to maintain the Bluebird Mill at two million ton per annum rate?

Aaron Rankin, Chief Operating Officer, Westgold Resources: Thank you, Chris. So the two million ton rate came from oxide. We are doing a lot of business improvement, unlocking work to get the most out of our mills. While we have a high oxide blend, we can maintain that throughput. As that drops off, that’ll lower the overall throughput of the mine. But as mentioned, we are undertaking a review of open pit work, which could potentially provide us with a maintained oxide blend to optimize the throughput rate at Bluebird.

Tommy Heng, Chief Financial Officer, Westgold Resources: Okay. The next question is from John Ogden. We’re not seeing much M&A in the gold sector. Is this because the gold companies at present do not think the present gold price is sustainable, hence don’t want to do top-of-the-market deals under the UA?

Wayne Bramwell, Managing Director and CEO, Westgold Resources: Thanks for the question, John. I don’t think anyone knows where the top-of-the-market is. Today, we sold gold at AUD 7,068 an ounce, and in response to your question about M&A, I think the gold miners are too busy trying to print money to be worrying about this just at the moment.

Tommy Heng, Chief Financial Officer, Westgold Resources: Next question is from John Ogden. Any exciting new discoveries or potential new ore sources in the package? Simon?

Simon Rigby, Chief Growth Officer, Westgold Resources: Thanks, Kasun. Look, Westgold is always very active, both in its brownfields and greenfields exploration activities. Obviously, our more advanced targets, such as Fletcher and Mason, are getting a fair bit of attention, but the greenfields teams are out there testing targets as well. As those targets advance, and if they get to a point where they’re going to be significant to the business, obviously, there would be an announcement around that. But at this stage, it’s business as usual with great support for both brownfields and greenfields exploration across the business.

Tommy Heng, Chief Financial Officer, Westgold Resources: One from Sudhanshu. Fortnum Expansion Project, any updates on that front, including drilling updates on the open pit shelf? One for you.

Yeah. Thank you for the question. We have done a lot of drilling around Fortnum, but we’ve been highly focused on the underground so continuous underground hits on trend have allowed us to keep drilling on that trend for four drills. There’s been exciting results coming out at depth as well with drilling through basalt and finding mineralization trends where we went before. That’s maintained our focus over the short term.

I’ll hand over to Wayne.

Aaron Rankin, Chief Operating Officer, Westgold Resources: If I can just add to that, the Fortnum Expansion Project, which we call FXP, is still sitting there in the sequence. But the current focus in terms of mill expansion is the Higginsville expansion plan. As we’ve said in the quarterly, that study is close to finish, and the intent is to report those numbers and seek FID for that from the board during Q3. That’s the first mill that we will expand.

Tommy Heng, Chief Financial Officer, Westgold Resources: There are no more questions at this stage. I’ll hand it back to Wayne for closing remarks.

Wayne Bramwell, Managing Director and CEO, Westgold Resources: Thank you, everyone, for patching in today. Look, these are a great set of numbers, but I can assure you we’re not high-fiving ourselves on this side of the mic. This year, the focus is very simple: consistent operational delivery. This has been a good quarter, which we’re pleased with. But what does success look like in this business? Consistent delivery of over 100,000 ounces safely per quarter. I’ll leave you with that thought. Today, Westgold is unhedged, debt-free, and the momentum is building. Thanks for your time today.