WGX’s FY24 earnings result was solid with most key metrics in line with our estimates. The company has yet to provide FY25 production, AISC and capex guidance post the completion of the merger with Karora Resources, and we see this as a key near-term catalyst for the stock. WGX’s ability to add value through the drill bit has been strong, with material upgrades to resources and reserves at its Bluebird-South Junction and Starlight mines already delivered in the past few months. We see significant scope for similar upgrades at the newly acquired Beta Hunt mine, with recent exploration success already demonstrating some of the potential to expand resources and reserves. We are reiterating our BUY rating on WGX but lower our ASX and TSX price targets 5% to A$4.00 and C$3.60, which reflects reduced free cash flow generation over the next two years to enable a normalisation of working capital balances.
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