MENU

Why Westgold Resources Ltd is trading flat despite a production downgrade

The Westgold Resources Ltd (ASX: WGX) share price sunk 5% lower to $1.45 today, before springing back up to $1.53, just 0.2% below Monday’s closing price.

In the morning, the company updated the market on its production guidance for calendar year 2018, announcing a lower output than previously expected. According to the new forecast, Westgold’s operations in Western Australia will produce 275,000 ounces of gold in 2018, compared to the 340,000 ounces announced in February.

A number of events contributed to the downgrade, including flooding at the Meekatharra project and repairs at the Higginsville mine.

However, the revised guidance mostly reflects the sale of the South Kalgoorlie operations to Northern Star Resources Ltd (ASX: NST) for $80 million at the end of March. South Kalgoorlie was expected to produce about 60,000 ounces of gold in 2018, but it was Westgold’s shortest life asset and it was divested to provide the company with cash.

Westgold reassures that production growth will continue in coming years with the commencement of production at the Big Bell mine, set to add approximately 100,000 ounces per annum to the group’s output starting from 2020.

The Richest Man Alive Invests in This

The richest man in the world has just launched a $100 million investment fund and investors who don't take note could miss out on a massive opportunity.

And it isn't by sheer luck. He did it by looking to the future and investing in the big ideas of tomorrow.

This could be your chance to get in on the ground floor!

Click here to discover more!

Motley Fool contributor Tommaso Autorino has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.