Westgold Resources Limited, a prominent player in the gold mining sector, has announced its commitment to the Cue Expansion Plan (CXP). This initiative aims to enhance the company’s processing capabilities at its Cue hub in Western Australia. The expansion is set to increase the hub’s throughput from 1.4 million tonnes per annum (Mtpa) to 1.7Mtpa by late fiscal year (FY27), with the goal of boosting gold output by approximately 15,000 ounces per annum (kozpa) starting in FY28.
The CXP is a strategic move to optimize processing hubs across Westgold’s operations. It is supported by increased underground mine outputs from the company’s Big Bell and Great Fingall mines near Cue. Additionally, the plan leverages ore from the operating Fender underground mine and smaller open pits near Cue. There is also potential for third-party ore supply and future ore sources from brownfields open pit resource targets at Big Bell South and Cuddingwarra.
Key Components of the Cue Expansion Plan
The CXP focuses on debottlenecking the existing processing circuit at the Cue hub. Study work indicates that increasing the mill motor power from 2.9 megawatts (MW) to 4.2MW, along with associated system and pumping upgrades, will support operation at the higher duty. The process plant upgrade is designed to increase the milling circuit throughput from the current nominal 170 tonnes per hour (t/h) to 200 t/h.
This expansion is scheduled to be complete in late FY27, with the higher installed capacity supporting an increase of approximately 15kozpa from the Cue hub from FY28 onwards. Westgold will now progress detailed engineering, procurement planning, and execution sequencing for the CXP while continuing brownfields drilling at near-mill opportunities to define future ore optionality.
Strategic Benefits and Financial Metrics
Westgold Managing Director and CEO Wayne Bramwell emphasized the strategic benefits of the CXP, stating, “Bigger mines need bigger mills. Westgold’s underground mine outputs are growing across all the Murchison operations and building ore stockpiles from FY27 onwards.”
The CXP is expected to result in a 21% increase in Cue processing capacity by FY28. The baseline production uplift from the CXP is anticipated to add approximately 15kozpa to Cue once commissioned. Supported by increasing outputs from Big Bell and Great Fingall underground mines and new regional open pits currently operating, the expansion is a key part of Westgold’s growth strategy.
The key financial metrics of the CXP include an indicative capital investment of $22 million, with a payback period of approximately 10 months. The life of mine (LoM) gold production is projected to be between 1.1 and 1.3 million ounces (Moz) at an all-in sustaining cost (AISC) range of $2,916 to $3,564 per ounce. The net present value (NPV) of the Cue hub is expected to improve by approximately $400 million at a gold price of $5,500 per ounce.
Future Prospects and Cautionary Notes
While the CXP presents significant opportunities for growth, it is important to note that the Scoping Study referred to in this report is based on low-level technical and economic assessments. These assessments are insufficient to support the estimation of Ore Reserves or to provide assurance of an economic development case at this stage. The information relating to processing expansion concepts, study outcomes, resource definition work, potential brownfields opportunities, and indicative financial metrics is based on preliminary internal and consultant study work.
The production target is predominantly sourced from Ore Reserves and Inferred Mineral Resources. There is a low level of geological confidence associated with Inferred Mineral Resources, and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources for the current Inferred portion, or that the production target itself will be realized.
Investors should be cautious and not make any investment decisions based solely on the results of the Scoping Study. The advancement of any brownfields opportunities remains subject to drilling results, geological interpretation, mine design, mine planning, technical and commercial studies, approvals, stakeholder engagement, and all applicable regulatory and disclosure requirements.
