Westgold Meekatharra expansion lifts NPV by $1.1B on $100M capex
- Processing capacity expands from 1.8Mtpa to 2.9Mtpa by FY28
- Indicative capital cost of $100M with a nine-month payback period
- Project NPV improves by $1.1B to $1.9B at $5,500/oz gold price
- Adds 47kozpa to annual gold production, totaling 1.6Moz over 10 years
*this image is generated using AI for illustrative purposes only.
Westgold Resources Limited (ASX: WGX) (TSX: WGX) released a Scoping Study for the Meekatharra Expansion Plan (MXP), targeting an increase in processing capacity from 1.8Mtpa to 2.9Mtpa by FY28. The brownfields project aims to add approximately 47kozpa of gold production, lifting total life-of-mine output to 1.6Moz over ten years.
The expansion addresses emerging processing constraints at the hub as underground mining from Bluebird–South Junction ramps up. By leveraging existing infrastructure and previously procured long-lead equipment, Westgold intends to avoid the higher costs and timelines associated with building a standalone plant.
Financial Overview
The MXP carries an indicative capital cost of approximately $100M, representing the upper end of the $65M–$100M scoping study range. The project forecasts a pre-tax undiscounted cashflow of $3.2B at a gold price of $5,500/oz, increasing to $4.0B at the spot price of $6,000/oz.
| Metric | Current Plan | MXP Plan | Improvement |
|---|---|---|---|
| Recovered Ounces | 1.2 Moz | 1.6 Moz | +0.4 Moz |
| Free Cashflow | $1.3 B | $3.2 B | +$1.9 B |
| Project NPV | $0.8 B | $1.9 B | +$1.1 B |
At a discount rate of 7.3%, the project NPV improves by roughly $1.1B to approximately $1.9B at $5,500/oz. The life-of-mine all-in sustaining cost (AISC) ranges between $1,968 and $2,406 per ounce.
What the Numbers Show
The capital efficiency of the expansion is highlighted by the forecast payback period of nine months. This rapid recovery occurs before any scheduled processing of Inferred Mineral Resources, meaning the initial capital outlay is supported primarily by Ore Reserves, Measured and Indicated Mineral Resources, existing stockpiles, and contracted third-party ore. The production target comprises 31% Ore Reserves, 44% Measured and Indicated resources, 14% Inferred resources, and 11% third-party production.
Capital and Operational Details
Total equipment costs are estimated between $41.6M and $64.0M, with milling representing the largest component at $20.4M–$31.3M. The design includes a parallel crushing circuit and a single-stage SAG milling circuit integrated with existing downstream leach and adsorption infrastructure.
Westgold reported holding $939M in cash, bullion, and liquid investments as of June 30, 2026. The company also secured a commitment letter to increase its Syndicated Facility Agreement to $600M. Feasibility-level work will commence to confirm engineering and capital estimates ahead of a potential investment decision in late FY27.
How might the reliance on 14% Inferred Mineral Resources and 11% third-party ore expose the MXP project to execution risks or supply chain volatility during the feasibility study phase?
Given the $100M capital cost is at the upper end of the scoping range, what specific engineering challenges in integrating the new SAG milling circuit could drive costs further up during the detailed feasibility stage?
With a forecasted nine-month payback period, how does Westgold plan to allocate the accelerated free cashflow generation—will it prioritize debt reduction, shareholder returns, or further exploration at Meekatharra?
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