Westgold Resources (ASX:WGX) has declared a maiden ore reserve for its South Junction Mine in Western Australia, totalling 3.04 million tonnes at 2.8 grams per tonne gold for 277,000 ounces.
South Junction is a part of a broader Bluebird-South Junction mining complex, which is becoming the primary ore source for the Bluebird processing hub at Meekatharra, with a 1.2 million tonne per year run rate targeted from the first quarter of financial year 2025.
Westgold, which has a market capitalisation of $2.71 billion, recognises the vast scale of South Junction, prompting the undertaking of an interim resource estimate to expedite mine planning studies.
Since March 2024, drilling has been conducted to increase the confidence in the inferred portion of the resource estimate, in parallel with mine planning studies.
The drilling results have enabled the company to conduct an update to the resource estimate that has seen the substantial conversion of inferred material to indicated.
This update includes 14,000 ounces of depletion from three months of production on the Bluebird side of the mine.
CEO Wayne Bramwell says the company will continue to invest in drilling across its portfolio in the financial year 2025.
“Westgold is rapidly building a mine of significant scale and life at Meekatharra,” Bramwell says.
“The maiden ore reserve for South Junction and the rapid expansion of the Bluebird-South Junction mining complex to a 1.2 million tonnes per year run rate by Q3, FY25 has been a remarkable success story and underpins the value in drilling.
“A larger, more productive Bluebird-South Junction underground mine is a game changer for our Murchison business. It will reduce the requirement and cost of road haulage of ore from Cue as the Bluebird-South Junction complex is within 2km of the nearby Bluebird mill.
“With Bluebird-South Junction and Big Bell in the Murchison, buttressed by the expanding Beta Hunt in the Goldfields, we continue to build a diversified platform that can produce more consistent and sustainable long-term cash flow.”
The drilling activities continue to expand the Bluebird-South Junction system and increase mineral resource confidence. This continued drilling will ultimately underwrite future updates to the resource estimate and ore reserves.
Westgold says the orebody remains open at depth and to the south along strike and down plunge.
According to the Department of Industry, Science and Resources (DISR)in its latest Resources and Energy Quarterly for June 2024, gold prices averaged about US$2,200 an ounce in the first half of 2024, which is a 15% increase year-on-year. This is largely due to strong demand from investors and central banks.
Meanwhile, due to lower grades and disruptions from heavy rainfall, Australia’s gold production decreased 4% year-on-year in the second quarter of 2024. Production is forecast to grow over the outlook period as major new projects and expansions come online.
Despite Australia’s gold production decreasing, the world gold supply has increased 2.6% year-on-year to about 1,240 tonnes in the second quarter of 2024. The DISR says this is driven by higher mine production and increased recycling.
The World Gold Council says total gold supply in 2023 increased 3% year-on-year as mine supply and recycling both posted growth – to total 4,898.8 tonnes.
Write to Aaliyah Rogan at Mining.com.au
Images: Westgold Resources
