Westgold recently approved the expansion of Big Bell, giving a green light to long hole stoping beneath the cave and extending the mine life to 16 years. Additionally, an extension of the Starlight decline to 320 vertical meters below the current decline face has been committed. We view the extension of both projects favourably, providing longevity to the operations and giving optionality to further leverage on existing infrastructure. Despite this, our valuation decreases to $2.31 (previously $2.42) on the back of the Big Bell grade profile below our previous modelled estimates, as well as underestimation of our previously assumed Big Bell mining costs. We maintain our Buy recommendation and reiterate WGXs gold leverage, with a 5% change in the AUD gold price impacting our valuation by $0.435, and a spot price ($3088/oz) valuation of $2.68.
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