Why the Westgold (ASX:WGX) share price shot up today

The Westgold Resources Ltd (ASX: WGX) share price reached a 52-week high of $2.70 in early morning trade today. Here’s why.

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treasure chest full of gold

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The Westgold Resources Ltd (ASX: WGX) share price rocketed up this morning after the company released its first quarterly report for the financial year. The Westgold share price reached a 52-week high of $2.70 in early morning trade, before dropping back during the day to close at $2.64, up 0.74%.

Westgold is a gold miner located in Western Australia. The company currently operates the Fortnum and Rover projects, and also the Meekatharra and Cue gold operations.

What happened?

The group reported a solid first quarter of FY21, in what was described as a “transforming year for the company”. The gold miner reported revenue of $145 million with the same amount in cash after the quarter.

Westgold’s operations performed as planned with only minor impacts from the COVID-19 pandemic which were largely associated with restricted travel arrangements for staff.

The company achieved its output guidance and executed on delivery of lower than expected unit cost outcomes. The company’s gold production and gold sales were 60,797 oz and 60,030 oz respectively (guidance 60,000 – 67,500 oz). The group’s cash balance continued to rise even after spending significant capital on the ramp up of the Big Bell mine, a plus for investors.

All mines performed in line with expectations during the quarter. As mentioned, the Big Bell ramp up continued, with the production run-rate now more than 600,000 tonnes per annum based on the September output.

What now for the Westgold share price

Westgold looks to de-risk moving forward as it repaid its pre-pay debt in full during the last quarter. Its only debt now is mining equipment leases.

Additionally, Westgold’s $5 million exploration expenditure for the quarter paid off as it saw outstanding exploration results. These will be reported in a later announcement, leaving shareholders plenty to look forward to.

With the Westgold share price trading at $2.64, its market capitalisation is sitting just above $1.1 billion.

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