Westgold Commits to Cue Hub Expansion Adding 15kozpa for $22M With 10-Month Payback
Westgold commits to Cue Hub expansion to 1.7Mtpa
Westgold Resources has committed to the Cue Expansion Plan (CXP), a capital-light pathway to lift the Cue processing hub from its current 1.4Mtpa run rate to 1.7Mtpa by FY28. The expansion represents a ~21% increase in processing capacity and is expected to add approximately 15,000 ounces per annum to baseline production once commissioned.
The CXP is underpinned by a scoping study demonstrating a ~$400M improvement to Cue’s net present value at a gold price of $5,500/oz. The expansion is supported by increasing underground mine outputs from Big Bell and Great Fingall, with potential supplementary feed from regional open pits and brownfields exploration targets currently under evaluation.
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The numbers behind the expansion
The scoping study outputs demonstrate a modest capital requirement with a rapid payback profile, positioning the CXP as a capital-efficient growth pathway.
| Metric | Output |
|---|---|
| Indicative capital | $22M (upper range; full range $14.4M–$22.1M) |
| Payback period | ~10 months |
| Life of Mine gold production | 1.1 – 1.3 Moz |
| AISC range | $2,916 – $3,564/oz |
| Project NPV (at $5,500/oz) | ~$1.1B ($1.0 – 1.2B range) |
| Pre-tax undiscounted cashflow (at $5,500/oz) | ~$1.7B (rising to $2.3B at $6,000/oz spot) |
Key highlights:
- Throughput increase: Processing capacity up ~21% by FY28
- Production uplift: Baseline production increase of ~15kozpa once commissioned
- Ore supply: Supported by increasing outputs from Big Bell and Great Fingall underground mines plus new regional open pits currently operating
- Brownfields activity: Resource definition drilling at Big Bell South and Cuddingwarra has commenced
How a simple mill upgrade unlocks the extra tonnes
The core constraint to materially increasing throughput at Cue is installed mill power. The CXP addresses this through a targeted upgrade of the milling circuit, designed to increase throughput from the current nominal 170 t/h to 200 t/h.
The centrepiece of the upgrade is the replacement of the existing 2.9MW mill motor with a 4.2MW liquid-cooled motor and variable speed drive. The motor has been ordered, with delivery scheduled for Q4 FY27 and commissioning targeted for late FY27. The use of an interchangeable motor retrofitting the existing switch room lowers civil and structural disruption, reduces schedule risk and improves overall capital efficiency.
Key plant upgrades include:
- Replace 2.9MW motor with 4.2MW motor
- Reconfigure mill lining for grate wall discharge
- Upgrade gearbox pinions, drive pinion and ring gear
- Upgrade cyclone feed, tailings and process water pumps
- Upgrade power distribution network
The expansion is designed to require only limited downtime for tie-in, allowing Westgold to increase throughput with a modest capital requirement and lower execution risk than a new plant build.
Why processing hub optimisation matters for gold investors
Westgold’s Murchison expansion strategy reflects a deliberate shift towards processing hub optimisation, using established infrastructure to convert increasing mine outputs into higher throughput and cash generation.
Rather than treating each ore source in isolation, Westgold is pursuing a regional development logic to maximise throughput, lower costs and lift free cash flow from established infrastructure across the Murchison operating footprint. This approach materially improves capital productivity by leveraging existing infrastructure, reducing haulage costs, shortening execution pathways and positioning the business to convert production growth into cash generation at a lower marginal capital cost than a greenfields solution.
In practical terms, the ability to pursue growth through brownfields infrastructure upgrades provides a lower-risk pathway to accelerate production, lower processing unit costs and increase free cash flow without relying on external financing or long development timelines.
The CXP comparison against the current operating plan (without CXP case) at a gold price of $5,500/oz highlights the substantially improved economics at only a slight reduction in grade:
| Metric | Units | Current | CXP |
|---|---|---|---|
| Mined Ounces | koz | 1,180 | 1,323 |
| Recovered Ounces | koz | 1,081 | 1,198 |
| Free Cashflow | $M | 1,121 | 1,729 |
| NPV | $M | 674 | 1,075 |
With CXP, recovered ounces rise to 1,198koz versus 1,081koz, and NPV to $1,075M versus $674M at a marginal reduction in mined grade (2.49 g/t versus 2.52 g/t).
CEO Wayne Bramwell on “bigger mines needing bigger mills”
Wayne Bramwell, Managing Director and CEO
“Bigger mines need bigger mills. Westgold’s underground mine outputs are growing across all the Murchison operations and building ore stockpiles from FY27 onwards. In addition, open pit mining is now underway at Cue and Meekatharra, with this organic growth underpinning the incremental expansion of our Cue business. This simple upgrade and modest capital investment at the Cue hub reflects a deliberate shift towards processing hub optimisation and expansion, with lower operating costs and higher cashflow the objective.”
Management highlighted that small open pits are being developed now and additional near-hub open pit resource development opportunities at Big Bell South and Cuddingwarra exist. These targets are larger, within approximately 50km of the Cue hub and, if drilling is successful, could add significant additional ore sources from FY28.
Where the extra ore comes from — and the growth still to come
The production target for CXP is underpinned predominantly by Ore Reserves at Big Bell and Great Fingall, together with Inferred Mineral Resources at Great Fingall. The long-life Big Bell underground mine (greater than 16 years) provides the majority of feed, supplemented by high-grade material from Great Fingall.
The production schedule shows a temporary dip in FY32 from Big Bell, reflecting conservative development rates assumed in the Big Bell Deeps life of mine plan. Westgold expects the Cue hub to have several potential ore sources that could help offset this dip and support utilisation of the expanded mill.
Supplementary and potential ore sources include:
- Big Bell South and broader Big Bell trend: Priority near-mine targets currently the subject of substantial resource definition drilling (Stage One H1 FY27, Stage Two end FY27). The Big Bell South Exploration Target is conceptual in nature and there has been insufficient exploration to estimate a Mineral Resource. It is uncertain if further exploration will result in the estimation of a Mineral Resource. This target represents approximately 3% of the Life of Mine plan.
- Cuddingwarra brownfields trend: An additional brownfields opportunity near Cue, being assessed as part of Westgold’s resource definition and optimisation programme
- Regional low-grade surface stockpiles: Approximately 3.8Mt at 0.7g/t, available for reclaim and processing
- Existing ore purchase agreements: Potential for further third-party ore feed into the expanded Cue processing hub
Readers should note that advancement of brownfields opportunities at Big Bell South and Cuddingwarra remains subject to drilling results, geological interpretation, mine design, technical and commercial studies, approvals and all applicable regulatory requirements. There is no certainty that these opportunities will necessarily be converted into future Ore Reserves.
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Fully funded, with next steps underway
Westgold’s balance sheet strength underpins the modest $22M capital requirement. As at 30 June 2026, the company held $939M in cash, bullion and liquid investments (per June 2026 Quarterly Report, 22 July 2026). Additionally, Westgold has executed a commitment letter to increase its Syndicated Facility Agreement to $600M, which remained undrawn as at the date of the announcement.
The $22M capital requirement is immaterial against this liquidity position, positioning the CXP as a self-funded, low-risk growth pathway that does not rely on external financing or long development timelines.
The next phases of work are expected to include additional engineering definition, sundry procurement planning, vendor engagement and more detailed execution sequencing so that shutdowns can be managed efficiently and long lead items can be secured where appropriate. In parallel, Westgold will continue to advance the brownfields resource definition work so that future ore optionality can be assessed against haulage, mine design, processing fit and capital intensity.
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