Westgold delivered another strong cash generating quarter in September adding $25M to the treasury after a notional $5M hedge liability (now closed), with the sale of listed investments contributing $2M. Performance was closely aligned to our model in which we forecast cash build of $24M. We update our modelled scenario, most significantly our assumed AUD:USD exchange rate to 0.65 and long term gold price US$1925/oz (previously 0.68 and US$1900/oz respectively), resulting in an A$2962 gold price (previously $2794/oz). Our valuation improves to $2.42, we maintain our Buy recommendation. Our model is highly leveraged to the gold price, with a 5% change in an AUD gold price impacting our valuation by $0.395.
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