Gold Mining Down Under: The Australian Advantage

Speaker A: All right, thanks everybody. So I'm here today with Wayne Bramwell. He is the CEO of westgold Resources. Westgold is a, uh, big position in the Gabelli Gold Fund. I am a portfolio manager of the Gabelli Gold Fund. Um, the stock has done very well for us. Wayne is also known as the Hare in, uh, Western Australia because of his beautiful locks. And uh, he should flaunt him if he has them. So if I could grow straight hair like that, I would do that too. Um, and we're very happy to have him here today. Westgold is a $5 billion, um, Aussie, uh, based company. It has, um, mines in Western Australia, um, four operating hubs. We'll go into this in more detail, but four operating hubs in terms of a bunch of mines that feed these various hubs. And we'll go into it, but one of the biggest miners in Western Australia. So we'll talk today about what it's like to mine in Australia and what type of advantage westgold actually brings, uh, to mining in Western Australia. Wayne there, thank you very much for being here today.

Speaker B: Pleasure to be here with you today, Chris. Okay, looking forward to this.

Speaker A: Yes, yes, yes. Um, and we're actually at a conference. So the reason that we're together now is because we're at a conference. Otherwise obviously he'd be in Perth, Um, uh, and I'm in New York. But. So first question is, Wayne. So where were you born? Where did you go to college? How did you start your career? Can you just go in a little bit of detail about all that, how it all started?

Speaker B: Um, quick potted summary. I'm a West Australian by birth. Born in Perth, grew up in Perth, studied in Perth, uh, went to university to do metallurgy, uh, mineral science, metallurgy, um, and WA is one of those fantastic locations. We talk about WA as the Silicon Valley of mining. So within the state we have exposure to every commodity. So, um, stepping into a mining profession, your opportunities to work in different commodities all exist within Western Australia. So, um, in terms of choosing metallurgy as a degree was a bit of a happy accident. Didn't, uh, know much about, uh, the role, but clearly, uh, when I, um, started studying in the early 90s, the Australian mining sector, uh, imported more metallurgists than it can produce. So job security was always somewhat certain and the ability to travel was very high. So really job security and the ability to travel were the main attractions. And if you. It's been, um, been a great journey so far, that's great.

Speaker A: So you. So you Graduated with a degree in metallurgy. You went to college in Western Australia too. And then you started out in the mining industry.

Speaker B: Very much okay. Sort of probably a similar transition to uh, a lot of mining professionals. You know, you graduate green out of university with a mining degree or a uh, surveying degree or geology and you get sent to, to a mine so as metallurgist. And my first um, operational role was in iron ore uh, with BHP in Port Hedland. And so you get thrown straight into a processing plant. Um, spent two years in iron ore with BHP and then thought wow, this mineral processing is interesting, I want to do something different. So then went and joined a hot metal company, Pyro Metallurgy in the southwest of Western Australia. And that was um, operating a electric arc furnace to produce Silicon Valley. Okay. So that was sort of a journey sort of through operations and then that um, morphed into a role in an engineering firm where I got to do more work around feasibility study and project management and project development. And that sort of then dragged me back up through I guess the org structure to ultimately corporate roles. Running uh, um, an explorer originally as the CEO, then a developer as the CEO and now into this role at Westgold which is an operating company.

Speaker A: Right. So immediately before did you join the board of Westgold? Immediately. So before you became the CEO you were on the board. Right. So can you talk about what kind of um, why you joined the board, maybe what attracted you to westgold when you did and then how you made that transition to CEO?

Speaker B: It's maybe a little, little atypical in some sense. I was actually running a family office um, in Western Australia for an eccentric West Australian billionaire. Uh, Mark Creasy is probably well known to many of your audiences and during that time got asked to join the Westgold board by the chairman of the time as a non exec director. You know as a. The board was going through a phase of refresh and he wanted new blood on the board. So I joined and you know that was 2020. 2020 literally I joined in February 2020 and COVID 19 Covid hit uh, Western Australia pretty much March or April. So that was an interesting time to uh, join an operating company where all of a sudden you had this impact of COVID restricting movement throughout the world. And in Australia sort of 2020-2021 I'd started to. Even though I had a full time job running the family office as a non executive in Westgold, I could see inside the business and I thought wow, there's some fantastic assets within this company. But it's missing something. It's missing a level or focus which I can't bring to it as a non executive. And you know, through a set of circumstances, by 2022, I was offered to come inside the business as the managing director. So I think the moral of that story is be careful what you wish for. And that transition from non exec on the board into CEO, uh, M.D. um, happened in 2022.

Speaker A: Okay, great. And so you were, the family office was in Perth also. Okay, great. Yeah, you said so. Okay, so. Right. So just if we can take a step back then. So you, you, you get there in westgold. But one of the big benefits to being in westgold was just the fact that, I mean, it's kind of like, you know, you're saying when you're swimming a fish swimming in the water, you might not realize that it's that, that you're wet. But, but from, from our perspective looking at, uh, mining companies globally, it's really, it's amazing to see what goes on in Western Australia. Perth and the, and the Calgary region and all that. Um, can you talk about, and even from your perspective in terms of running the family office, I'm sure that you looked at other operations around the world. Can you talk about what the benefit you saw and think you have now of mining in Western Australia specifically?

Speaker B: You know, this. I've been lucky during my, my professional career. I've worked overseas. I worked in Africa for 11 years. I worked in the, in parts of the old Russian empire. I've worked in Asia. And westgold's appeal was in some sense its name. All the operating assets were in Western Australia, so really easily accessible and one time zone which was very attractive. But, um, WA is a great place to operate for gold. And as a statistic today, I think there's 42 operating gold mines in Australia.

Speaker A: Uh, right.

Speaker B: 29 of them today are operating in Western Australia. So, you know, the bulk of the gold production in Australia today still comes from Western Australia. I mean, as a country, I can speak to that. I mean, Australia produces 9 million ounces of gold a year. 29 of those operating mines are in WA. So the bulk of that 9 million ounces has still been coming out of, uh, a state where I grew up.

Speaker A: Yeah. Right. So. Okay. Now the other thing again that I find striking about it is that, um, when I, so I was there and I visited one of your mines in November and um, the thing about Perth that I noticed is that it's my second time there, but it is a big, beautiful, fantastic city. Looks a lot like San Diego to me. Um, um, but you see people in the airport in their mining gear, um, and they're walking in their mining kit, you know what I mean? And they, and they, there are people walking around the street and mining kit. Um, and then you go to uh, Kalgoorlie, which is like a two hour flight, uh, inland from Perth. And that's again a beautiful little town, you know, where there's like, it's a mining town. But I would have figured, you know, when I first went there, mining town, I figured I'd have to go to a barn, you know, and like fight my way to ah, to the bar, to you know, to get a drink or something. And there are yoga places and beautiful espresso bars and things like that that we've spoken about. And um, it's a town of 20 or 30,000 people and it's all mining, like that's all anybody's mining and then obviously servicing the miners. But can you talk about the advantage to that aspect of like just being in like the skills that are there, being in uh, Perth and in Kalgoorlie and just that part of it being in Western Australia compared to Africa or Russia or whatever.

Speaker B: Well even on an Australian basis, I mean WA understands mining. I mean it is the. Australia's gold is now Australia's second largest revenue earner. Uh, so the bulk of that revenue is coming out of Western Australia. WA because of its mineral endowment and uh, resource endowment, you know, is a uh, resource state. Whether it's gold, iron ore, critical minerals or oil and gas. That's what WA does. You know, we have an agricultural industry but it's, it's dwarfed by the resource sector. So as you say in Perth, which is on the far west coast of Australia, you walk down the main street and you see people wearing mining logos and we call high vis. You don't see that in Sydney on the east coast. You certainly don't see that in Victoria. So I guess the visibility and the understanding of the resource sector in WA is very front of mind to everyone in the community because they know that's what we do. But press talk uh, about mining stories every day. Sometimes positively, sometimes negatively. But you know, mining, the connection and the contribution of mining and resources in WA is very front of m mind on the east coast of Australia probably not so right.

Speaker A: And you could even see. So you know, again, you juxtapose all this for me being the. Maybe I'm the. I don't know, I was going to say I'm not a fish jumping in. Maybe I'm the squirrel trying to get a nut jumping into the water in Western Australia and, and um, here in the Northeast United States where I grew up and everything, um, you don't really get it. Like mining engineering, Forget it. Like nobody here would even think of doing that for a degree. And uh, geology, like no, you know, like maybe some kind of obscure thing, you know, like research, PhD but not real mining geology. And in Western Australia you have colleges which are dedicated, like universities dedicated to just mining engineering. Right. Can you, can you talk a little bit and like the skills that are embedded there?

Speaker B: Certainly I can talk to that in some detail. I mean in my later life I did a, uh, master's degree through the West Australian School of Mines. And it's a finishing school if you like, for mining professionals very well known. I mean, uh, could we call it the Harvard of the mining in wa. Certainly probably more akin to the Colorado School of Mines in a North American sense, but certainly the West Australian School of Min for many years, Chris, I mean it didn't generate enough professionals for the industry. The industry I think specifically gold, has been quite poor about showing young people about what the careers that you can have in it. That's changed in the last 10 years. And um, I can tell you now the West Australian School of Mines intake for this year was something like 130 young people who were doing degrees in mining engineering, metallurgy, surveying and geology. That's like a big number historically for this school. So it's been like a tide as the industry has been quite cyclical. But the tide very much at the moment is in people are seeing the career opportunities in it. And these schools are now generating more graduates. But still, even say 130 graduates coming out of that school this year is not enough to keep these industries going. And from a Westgold perspective, we're now bringing young graduates from the UK who have uh, um, maybe it's a North American story too, that those schools are generating a lot of mining graduates, but there's no jobs for them in Australia. And even Western Australia specifically we still uh, have got a lot of employment and we're under resourced for people. So I encourage, you know, young North American and Canadian graduates. If you're doing metallurgy, mining, surveying or geology, jump on a plane, come to Australia. It's a long way, but there's opportunities there.

Speaker A: Beautiful. It's a beautiful place. So great. And then, so I guess more specifically then if we Kind of hone in a little bit on Kalgoorlie, where you have. Where I visited your Beta Hunt mine. Um, can you talk a little bit about, uh, the benefit of being in Kalgoorlie specifically, and in terms of the infrastructure that's there. M. And how that even. And that was a, uh, relatively recent acquisition. Beta Hunt and kind of what you saw, what you liked about, um, Beta Hunt and Higginsville, uh, which Higginsville is close to Batehunt, near Kalgoorlie as well. But can you talk about what you see there in terms of an infrastructure perspective that makes it attractive to you

Speaker B: just for context and maybe for your listeners? Kalgoorlie is, uh, the epicenter of the West Australian gold, gold industry. You could even look at Kalgoorlie, and there is a similar town on the east coast where, you know, when you think about gold, you may think about Ballarat or Bendigo in Western Australia. Kalgoorlie, if you like, is the epicenter of the gold sector. And our appeal to, um, assets that we acquired south of Kalgoorlie really was. It was, you know, it was prime real estate. I mean, if it's a tier one address for gold. And the gold fields in Kalgoorlie, I mean, they've been mining gold in one shape or another since the early 1800s. You know, there's still. Even though it's a very. What you would think is a very mature, uh, gold field, there's still a lot of opportunity down there. And again, much similar to maybe some North American mining fields. You know, there's. It's been gone through periods of people of consolidating land packages and then breaking it up. And so there's ownership changes, but within the ownership changes, there's always opportunities to grow. And, um, the gold fields for us was the mineral endowment of the gold fields. Whether it's the northeastern gold fields north of Kalgoorlie or the southern gold fields where we work, the mineral endowment in those two belts is probably the biggest endowment within Western Australia, hence the appeal.

Speaker A: Right. And we can talk about that. And the other thing is that it's. Right, um, you can drive to site, like you could completely. I mean, you know, have a nice espresso for breakfast.

Speaker B: And, you know, Australians are like quite, you know, have certain standards around coffee. I mean, thank you. The Italians brought coffee to Australia in the 40s, and we have taken to that coffee like demons. But the real appeal for Kalgoorlie is it's such a Strong service base. You know, it's a mining town. All the resources you need to run mining, run and operate mining mines in that region are there. Whether it's labor, uh, heavy equipment, underground equipment, um, people to um, do surveying or exploration companies there. There's a resource base there which makes doing business around Kalgoorlie much easier than some of the other parts of Australia.

Speaker A: Yeah, I was talking to somebody else at a conference here and they um, are operating a mine in British Columbia, like kind of remote British Columbia. And they had one part of uh, a coupler on a gearbox. And um, it took him eight days to get that one piece of equipment. Right. To put it on the, um, to be able to remove it, you know, whatever it broke. And um, whereas you guys, you know there's something right in town, right. I mean like there'd definitely be like another couple or you know, 20 of them in inventory right in town.

Speaker B: And certainly, I mean it's a small, it's a small town, Kalgoorlie, it's you know, five hours drive from Perth. But you know, it's well resourced and well serviced. I mean it's a town now which is being regenerated in some sense. You know, there's plenty of work there. You know, the government's putting more services into Kalgoorlie to try and bring people back into the town. Because much of our Australian mining industry now is really fly and fly out, where you can live in Perth and you can fly to a remote project and work for seven days, eight days and then fly home. You know that that thematic is in some sense no one really wants to run well, no one really wants to work on a fly and fly out basis. I mean really, those regional towns have suffered over the many years when fly and fly out has become more prevalent. I mean as a young professional I worked in Port Hedland, it wasn't fly and fly out, it was a mining town. You know, there was a stronger community.

Speaker A: Yeah, it's nicer. Yeah, yeah. So hopefully that'll uh. Do you think there's the potential for that to start coming back into.

Speaker B: I think so. I think so. Certainly in Australia now there's, you know, there's far more focus on trying to re reactivate a lot of these regional towns and mining's key to it. You know, as the sector is strong, these projects are getting bigger. So you know, if that drags more people into these regional towns like uh, Kalgoorlie, where there's plenty of employment and that's the key. Plenty of employment. Often the struggle in these towns is accommodation.

Speaker A: Yeah.

Speaker B: You know, and that's where uh, government and industry are working together now to try and remove uh, some of these hurdles so that more people can come to these regional centers and live.

Speaker A: Yeah. Okay, great. So. Right. So kind of, you know, continuing with that point. There's, There's a lot of. There are a lot of people in Australia. There's an enormous, uh, I mean in Western Australia who are capable of doing mining. Great skills base, but there's still a shortage. So you have these highly skilled, you know, highly technical individuals and also management, but not enough of them. Um, can you kind of talk about how you then from a mining perspective, how you're able to kind of deal with that in terms of a uh, high cost of labor but then how you're able to balance that with. With high efficiencies?

Speaker B: Yeah. And very much no. The total population in Australia today is 28 million people. We're a big island with not many people down there. You know, the mining sector now and the gold sector specifically, second largest earner of export revenue, uh, only. Only behind uh, iron ore. This is a uh. Is an industry which continues to need people. So what do we do in a scenario where our demand for labour is very high but the supply is short? We have to go to technology. I mean speaking to that, you know, over generations now within our sector we've had to some sense, had no choice but to start. Substitute technology for labor because we couldn't get the labor. So Australian mines now are quite different than North American mines that I've been to, whereby there's a lot more use of equipment, whether it's drills, trucks, or the way we go about mining. And a smaller uh, physical workforce in Australia that's been driven because we just couldn't get the labor. We've been a net importer of mining skills for a long time because our schools haven't been able to generate the volume that we needed. And you know, companies are trying to work around that in two ways now. Spending more capital on trying to um, develop, bring new people into the industry and train them, show them that the career is. Is um. Has. Has opportunity. And then the other thing is trying to retain the talent that we've got. So yeah, it's an ongoing struggle. Labor. But I think at the moment where, where the world's at and certainly within Australia, the broader society, starting to understand the contribution of the sector and starting to see it now more as a change, as a positive force. For change, not something which is destructive to the environment.

Speaker A: And you guys are able, ah, I think you were telling me before this interview started that you get around 700 meters per month in development, um, and which is a high number and you guys are really experts in underground development and being able to do it efficiently um, which, which I think is a, is a huge benefit. Can you talk a little bit about um, West Gold's a little bit different also in terms of having an employee based workforce that works underground as opposed to most others in Western Australia which are contractor based. What the positive negatives that are and also what you're doing specifically to kind of help your uh, help lower your turnover and also how you might be positioned relative to others in terms of getting your turnover maybe lower than others.

Speaker B: It's a key point Chris, and certainly in North America or Canada, quite typical that you are an uh, owner operator, that the people who are mining your bodies are employees of the company. In Australia it's probably the other way around. There's been a shift at the moment in the last probably two decades towards the owner of the ore body having contract miners, a separate company mining that ore body for the owner. Westgold's gone through this sort of transition in the last four years whereby when I first started we had um, seven underground mines running and we operated all of them. So we were an owner operator which, and the negatives in that is because you're an owner operator, you're running a much larger workforce and you've got a much larger capital export exposure to the equipment. As a contract miner you're not exposed to that workforce directly. You, you as the contractor are bringing those people, they're yours.

Speaker A: Right.

Speaker B: And you, you're bringing your equipment. So we uh, are as the owner only exposed to the people and the capital via your monthly charge.

Speaker A: Right.

Speaker B: So in some sense not being an owner operator normally reflects in a smaller workforce.

Speaker A: Yeah.

Speaker B: And, and so sometimes a higher operating cost. Where we are now in the Westgold journey, still seven mines running, five we operate ourselves and now we have two smaller assets run by contractors. So what we're trying to do now is uh, as we start to change that balance from 100% owner to a more hybrid model of uh, some owner, some contractor is put more variable cost into our business and try and increase our productivity. So I'm not sure what the right answer here is here, but certainly as when we were full owner in all of our mines our cost structure was higher because we're exposed to more people which in an environment where labor is um, short, that's a problem.

Speaker A: Right. Okay.

Speaker B: And with seven underground mines running, every truck, every drill, every loader, we would have to purchase ourselves. So there's a capital exposure and a cost exposure to the people.

Speaker A: Do you think it helps at all from a turnover perspective if you're an employee of the company or not so much?

Speaker B: I think so. I think with our own workforce over the last four years, certainly we've changed the way we remunerate, um, our employees and now they can buy shares in our company. So I very much see that the employees who, they love these mines and often they love the people they work with. Now that they've become shareholders of the company, they are very, they're already invested emotionally, now they're invested physically.

Speaker A: Yeah.

Speaker B: You know, it's harder to generate that level of, I guess, loyalty in people who are contractors who uh, you know. And this is how transient some of the workforce can be in our state because there's so much work. Like for argument's sake, if you're a Westgold employee today and you and I have a fight and you want to leave, well then the next day you'll have a new shirt and a new job and you can move on to any one of a multitude of mines. So that level of demand for labor makes parts of the workforce very transient, can impact um, employee costs.

Speaker A: Right, Interesting. Okay, that's cool. But the big picture, okay, it's interesting because another way to think about it, which I hadn't really thought about before is it's almost like a capital light model in Western Australia. And we've noticed also that a difference between say, North American, um, mining and development companies and Western Australia specifically is that in North America they all tend to um, delineate a very big project, um, and then with a lot of exploration spending and then show that to the market and then try to raise all the capital at the get go, which is typically a big chunk of change, uh, to build the whole thing. And in Western Australia it seems like the model is a little bit different in that because it is capital light, um, you can get started pretty quickly. So you find, you might not have found the whole deposit, but you found some of the deposit, um, and you can get in there quickly, start developing it, especially if you have the mills already. So can you talk about how that kind of that model and um, that idea of like, um, of finding a resource and then maybe uh, and mining it without having it be like a long mine life might be a benefit and then how the market Might be missing some of the full value there.

Speaker B: It's a really um, good point. You speak to. And when investors look at North American gold companies and Australian gold companies, they see two very different things. And specifically to your point, a North American gold, uh, company or a gold operation, you know, maybe it has a minimum of a 10 year mine life.

Speaker A: Yeah.

Speaker B: And North American investors will go if it doesn't have a 10 year mine life. Well, why they look at Australian gold companies and they may.

Speaker A: Wow.

Speaker B: All of these companies and these projects on face value may like have uh, like a three year mine life. And why, why is it so different? Is there no gold there? Yeah, not, not the case. It's more about that. You're right. Maybe the Australian company's approach is let's, let's drill out a project where maybe it's got a seven year life of which maybe the first three or four years is a measured and indicated. And we can get started because we know that once we make that transition from explorer to producer, once we've got a cash flow, we can reinvest that money into drilling to extend the mine life as against the North American ways. As you say, take all the money up front. De risk it up front.

Speaker A: Yeah.

Speaker B: Which is much more heavy in terms of capital or equity where the Australian way might be. Okay, let's not take all that dilution up front. Let's get on the park. Let's get this thing running where we've got a revenue stream and then instead of going to the market for the equity to continue to drill, maybe that business becomes more reliant on its own funding. So there is, the Australian approach is very, very different. I mean equity is always available. But yeah, on face value, Australian gold assets may look very different to North American gold assets in terms of mine life. And a case in point would be one of our smaller west gold mines. So the Starlight mine, which it started in 1998, has had and has been and is running today in 2026. I think over all its journey it might have only ever had on paper, um, a three or four year mine life. Because as an underground mine you're limited to what you can drill. Where we are today in that mine, it's got a seven year mine life. The only thing we did differently is probably taken a North American approach to it. Once we were operating it, we just drilled it intensively and we kept drilling it to the extent where now it screens differently than a typical Australian asset where people look at it and go seven years. Well that's atypical for Australia but may look still atypical for a North American investor who would say well why isn't it 10? Yeah there is some nuances in the markets which may um, provide opportunities for investors who look through and try and understand why typically uh, an Aussie company may screen differently than a Canadian or North American.

Speaker A: And also it's Right so, and maybe to focus a bit more on westgold, the benefit to you guys of having the installed capacity that, that, that milling. So you have four mills, right you have four processing facilities throughout Western Australia and um, you're benefiting from. There's another company, New Murchison, right Which is feeding ore to you and that's extremely capital light for them but it benefits you because you have that installed capacity. Can you talk about kind of and even in terms of your own exploration how um having that sunk capital helps

Speaker B: um you guys very much. And this is not me speaking as a metallurgist, it's me speaking as the, as the leader of the business. I see certainly in the Australian gold landscape the owners of the processing plants now have strategic power. You know if you are trying to build a new processing plant in a Australia depending where you are, you know if you are an explorer moving to producer that that journey can be 10, 12 years. I mean if you're an advanced explorer uh, and you've got a very good resource, maybe there's a three to six year timetable to go through permitting native title, environmental approvals, financing, raising debt to the point you can get a revenue stream. So the strength I see within the westgold business is we have all this sunk capital in four processing plants and what we've tried to do now in the last several years is to look at how do we leverage that sunk capital. We've got strategic power in the Murchison having these three processing plants and we've got a large one in the southern gold fields. But we've looked to ways to leverage that through actually what I call coopetition. We look at some of the junior explorers around our uh, processing plants and go and Newmerchison is the case study. We're drilling an explorer, drilling ah an open pit target we really liked. We took a small equity stake in their company and had a very frank discussion with the management. Their ore body was getting bigger and we said guys look we're small shareholders in your company now but where you are in the journey is you're at a crossroads. You can choose the typical model of a three to six year um, process to get to a revenue and become a producer. Or we can give you an alternative. Here's an ore purchase agreement where you go mining, we'll buy the ore and we'll basically both groups of shareholders benefit. We got the access to a soft oxide high grade ore which made our um, processing plants run faster and increase our output. But it also injected cash into this explorer which very quickly went from a market cap of I think Chris, it might have started at 50 or 60 million Australian dollars to sitting at around 350 million market cap today. Most importantly that company has uh, um, at the end of March quarter about $150 million of cash inside it. So what has this agreement done for them? It's provided them capital to continue to uh, explore and expand their operations in terms of mining output knowing that they don't have to go and build a processing plant that will happily buy this ore from them. And both groups of shareholders benefit as well.

Speaker A: Right. So if they find more you guys could you know will probably uh, process it and just make some very low risk.

Speaker B: And so we as a company Westgold have zero risk uh exposure to the mining risk. They mine, um, they screen the ore and sample it, we buy it. So it works for us. It's been very positive in terms of generating cash for our shareholders but also for theirs and on which we are now one. I think Westgold is 16% shareholders and new M merchants and I really really like this model of sort of not competition but coopetition. It's helping that company with effectively westgold has been the catalyst to generate a new gold producer um in Australia. So single handedly by this then having access to our ah, processing plant they become a producer and we're starting to replicate this model with others.

Speaker A: Okay, great. And that's still a very small part of your business. The real, the real big important thing is like the exploration that you're doing and with you know you have all these expiration targets and I guess also in terms of the sun capital like one story that's a good one is the Bluebird south junction and now Polar is Polar Star which is right very close to your mill. And again you were able to get that into production with a small resource but the resource has grown pretty substantially. Could you talk about that for a sec?

Speaker B: It's also another way of um, a model which is very common in Australia, maybe not so common in North America which we call hub and spoke. The hub is the processing hub and when we talk about the spokes it's, it's remote mines Feeding the hub, that's really common in Australia and often some of those, you know that the hub being the processing hub in some cases you can truck ore 200km away if it's got grade to that. That bakes in high costs into people's business. So a really optimized model is a very big hub with a very short spoke. And specifically to um, Bluebeard South Junction which is one of which is now our largest mine in Makatharra. This was two open pits that were mined in the 1980s, 1990s which were run by open pit operators. Those mines closed not because they run out of gold, but because as soon as the ore started to get into fresh ore and it was hard, the open pit operator just moved to the next shallow pit. Westgold very much has been investing in Bluebird south junction now for four years. Specifically because the mine is within 600 meters of our processing plant. Up until the time we started to develop um, this underground mine, we were still hauling ore from 200 km away to feed this processing hub. Now literally we direct haul from Bluebird South Junction 600 meters up the ramp to our uh, run of mine pad. And that's starting to down slow our cost base fall in Mekatharra. So specifically to our uh, exploration programs over the last 12 to 24 months the focus has been very much to shift our cost base. We need assets or mine operations much closer to our hubs. So there's been a very strong focus on infill drilling of our existing undergrounds or shallow targets which are much closer to our mills.

Speaker A: Yeah, makes sense. Okay, great. So could you. So Westgold again a very solid balance sheet, a net cash position. I forget how much, but how much is it?

Speaker B: Again at the end of our March quarter, sort of circa 850 million in cash, liquid investments and bullion.

Speaker A: Yeah. So a huge cash balance, a very solid position, big free cash flow generator with growth. Can you just kind of sum it up now in terms of what the Westgold proposition is?

Speaker B: This business now is 10 years old and for the first seven years it sort of established itself. In the last three years it went through ah, a turnaround and now it's on this growth path with the balance sheet we've got. The reason we've been growing this balance sheet so strongly is what we want to do is be able to uh, internally fund the growth for the next three to five years. So the cash we've got now is really funding a transition in the business. And the transition in the business has been A business which was mine constrained. Which means our mines didn't generate enough output to keep our mills filled. So the gap in our production was made up of low grade stockpiles that was driving our costs up through four years of solid drilling now. And now that our mines are starting to be more productive, we've shifted from being mine constrained to mill constrained. Now we've got too much ore for the milling capacity we've got. So the transition of the business now is about plant expansion and expanding our hubs. With the Higginsville hub in the southern goldfields, the first um, processing plant which has been approved for expansion. We've got four. I can certainly see there'll be another uh, at least another two plant expansions over the next two to three years. Ounce production up and our unit costs down.

Speaker A: That's great. Okay, great. That's fantastic. And so it's just going to be continuing free cash flow growth and um, to the benefit of all of us North American shareholders.

Speaker B: Very much it's about the portfolio of assets. We've got a very deep M. Again, we understand the portfolio we're operating now. I mean we keep finding new opportunities in our business through drilling so we don't have to look outside the box of assets we've got. So in terms of organic growth, that's our focus. And then fully funded to bring those things on.

Speaker A: That's great. Okay, thanks Wayne. I really appreciate it.

Speaker B: It's been fantastic.

Speaker A: Chris, thank you. Okay, see you soon.

Speaker B: Thank you.

Speaker C: This interview was recorded on June 12, 2026. Christopher Mancini is the Associate Portfolio manager of the Gabelli Gold fund. As of March 31, 2026, Westgold Resources accounted for 2.85% of the fund's net assets. Investors should carefully consider the investment objectives, risks, charges and expenses of the fund before investing. The prospectus and summary prospectus contain more complete information about this and other matters should be read carefully before investing. To obtain a prospectus or summary Prospectus please call 800 GABELLI or visit. Returns represent past performance and do not guarantee future results. Current performance may be lower or higher than the performance data. Quoted investment return and principal value will fluctuate so upon redemption, shares may be worth more or less than their original cost. To obtain the most recent month end performance information and a Prospectus, please call 800 Gabelli or visit www.gabelli.um com. Investments related to gold and other precious metals are considered speculative and are affected by a variety of worldwide economic, financial and political factors. Investing in foreign securities involves risks not ordinarily associated with investment in domestic issues. Funds concentrating in specific sectors may experience greater fluctuations in value than funds that are more diversified. Not FDIC insured, not bank guaranteed may lose value. Distributed by G Distributors, LLC, a registered broker, dealer and FINRA member firm. One Corporate Center, Rye, NY 10580.