Why Westgold (ASX: WGX) has fallen more than 5% this morning.
Westgold Resources (WGX) is under pressure this morning following the release of its three-year outlook, with the market disappointed by a combination of modest near-term production growth and elevated costs. FY27 production is guided to 385–425koz, implying just ~5% growth at the midpoint from FY26’s 387koz, while AISC guidance of A$2,980–3,380/oz highlights continued cost pressure.
The longer-term picture is more encouraging, with production targeted to reach 460–510koz by FY29, but he markets unwilling to look through the softer FY27 setup just yet.
The move also comes against a less supportive backdrop for the gold sector, with bullion falling for three consecutive sessions as Fed rate-hike expectations have resurfaced. However, WGX’s fall is predominantly company-specific, with yesterday’s guidance causing the $5.8bn miner to be the worst performer on the ASX 200 this morning.
- Near-term disappointment: FY27 production growth is modest, while AISC of A$2,980–3,380/oz was clearly higher than the market wanted to see.
- Longer-term growth remains intact: WGX is targeting 460–510koz by FY29, implying ~25% production growth at the midpoint versus FY26, leaving execution and cost control as the key issues from here.
We continue to like the gold sector and WGX but a test of $5.60 wouldn’t surprise, i.e. another ~8% lower.
