Can WGR Overcome Funding Challenges to Deliver on Gold Duke’s Promising Economics?

Strategic Toll Milling Agreement

Western Gold Resources Limited (ASX – WGR) marked a significant milestone in the June 2025 quarter by signing a binding toll milling agreement with Wiluna Mining Corporation Limited (WMC). This 24-month contract, effective from mid-June 2025 and potentially extendable by six months, secures processing capacity at WMC's fully operational Wiluna Processing Plant, located just 46 kilometres from WGR's 100% owned Gold Duke Project. The proximity and existing haulage infrastructure position WGR to transition rapidly into production with a low-cost, open-pit mining approach.

Robust Project Fundamentals

The Gold Duke Project benefits from shallow, free-milling ore bodies that metallurgical testing confirms are highly amenable to conventional carbon-in-leach processing, with gold recoveries reaching up to 95% for oxide material. The project’s Mineral Resource Estimate stands at 3.25 million tonnes grading 2.1 grams per tonne gold, equating to approximately 214,000 ounces. Importantly, the project holds all necessary mining approvals for its initial pits, including Eagle, Emu, Golden Monarch, and Gold King deposits, clearing the path for development.

Economic Outlook Enhanced by Rising Gold Prices

WGR is updating its scoping study to reflect current gold prices, which have surged to around A$5,000 per ounce, well above the previous base case of A$3,500. The earlier study highlighted an exceptional internal rate of return of 617% and a net present value of A$35.1 million at an 8.5% discount rate based on a 34,000-ounce production target. The forthcoming update is anticipated to further strengthen these economics, underpinning the project's viability and attractiveness to investors.

Advancing Towards Production

Alongside the milling agreement, WGR has progressed grade control and infill drilling plans, issuing a Request for Pricing to experienced contractors familiar with the Western Australian Goldfields. These efforts aim to refine orebody definition and support efficient mine scheduling. The company has also selected SSH Group Limited as its preferred mining contractor, benefiting from a deferred payment arrangement designed to ease cash flow pressures during the project ramp-up.

Capital and Corporate Developments

Financially, WGR raised approximately A$1.05 million through a share placement in April 2025, attracting strategic long-term gold investors such as the Investius Microcap Fund. Additionally, $500,000 in convertible notes were converted into shares, bolstering the company’s equity base. Despite these injections, cash on hand was reported at $608,000 at quarter-end, with management actively planning further funding to support ongoing development and corporate costs.

Looking Ahead

With the updated scoping study expected next quarter, WGR is poised to mobilise drilling activities and continue extending the project’s life of mine through exploration and resource modelling. Engagement with local stakeholders, including the Martu People, remains a priority to ensure sustainable development. While no mining or production occurred in the quarter, the groundwork laid positions Western Gold Resources on a clear trajectory towards becoming a gold producer in the near term.