VAU has approved an A$80m budget to expand the processing capacity at King of the Hills to 6.0mtpa. The expansion is expected to commence in April 2025, and with a 15-month construction period, should enable commissioning to occur in the 4QFY26. This was earlier than we had assumed in our base case, and we have brought forward the increase in throughput to 6mtpa by one year. The earlier expansion drives modest upgrades to our FY27 and FY28 earnings forecasts. The improved earnings outlook and movements in spot gold prices drive a 5% lift in our gold price to A$0.58 and we reiterate our BUY rating. Delivering an improved mined grade performance at King of the Hills open pit in the 2QFY25 remains a key near-term catalyst for VAU.
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