S&P/ASX 200 Index (ASX: XJO) gold stock Westgold Resources Ltd (ASX: WGX) is under heavy selling pressure today.
Westgold shares closed on Friday trading for $2.58. In morning trade on Monday, shares are changing hands for $2.28 apiece, down 11.6%.
For some context, the ASX 200 is down 1.8% at this same time. And in a better comparison with Westgold's peers, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) – which also contains some small miners outside of ASX 200 gold stocks – is down just 0.2% today.
Here's what's happening.
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ASX 200 gold stock downgrades guidance
The Westgold share price is tumbling following the release of the miner's post merge FY 2025 guidance update.
The merger of Westgold and Karora was completed in August 2024.
The previous post merge FY 2025 production guidance assumed a faster simultaneous ramp-up of Westgold's Beta Hunt mine and Bluebird-South Junction than the ASX 200 gold stock was able to deliver. In the first half of the 2025 financial year, the ramp-ups of both assets were slower than planned, which management said was predominantly due to engineering, not mineral resource issues.
Due to the delays, Westgold lowered its full-year FY 2025 production guidance from 330,000 to 350,000 ounces. That's down from the prior forecast of 400,000 to 420,000 ounces.
All-in sustaining costs (AISC) guidance for FY 2025 was increased from $2,000 to $2,300 per ounce to the new $2,400 to $2,600 per ounce.
And Westgold reduced growth capital for the full year to $200 million from $235 million. The miner said it will prioritise projects delivering the highest return on investment, like Beta Hunt, Bluebird-South Junction, and Great Fingall.
What did management say?
Commenting on the production ramp-up hiccups dragging on the ASX 200 gold stock today, Westgold CEO Wayne Bramwell said, "Balancing short range targets with longer term shareholder returns is Westgold's objective."
Bramwell continued:
Optimisation of our expanded portfolio began in earnest in Q2 FY25 and disappointingly, engineering ramp up issues constrained outputs from the Beta Hunt and Bluebird-South Junction underground mines.
Both mines are now regaining momentum as Westgold rectifies areas of historic underinvestment across the Southern Goldfields and accelerates the expansion of our key Meekatharra mine.
We are systematically deploying capital across our portfolio to establish long term sustainable growth, with drilling and upgraded infrastructure set to make our largest mines larger and more productive with lower operating costs.
Looking to what's ahead for the ASX 200 gold stock, Bramwell said, "Westgold's output will continue to improve across H2 FY25, with production in Q4 FY25 expected to reflect an annualised run rate of at least 400,000 ounces per annum."
Despite today's retrace, the Westgold share price remains up 11% since this time last year.
