The Westgold Resources Ltd (ASX: WGX) share price is trading lower on Friday despite the release of an impressive full year result for FY 2020.
At the time of writing the gold miner's shares are down 1% to $2.07.
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How did Westgold perform in FY 2020?
For the 12 months ended 30 June 2020, Westgold recorded gold sales of 235,196 ounces, up 7% on the prior corresponding period.
The miner didn't benefit fully from the sharp jump in the gold price due to hedging 200,000 ounces at an average of $2,062 per ounce. However, this was still 13% higher than a year earlier, underpinning an 18% increase in revenue to $492.3 million.
And while the company's all-in sustaining cost (AISC) increased to $1,518 an ounce, it couldn't stop its earnings growth from accelerating. Net profit after tax rose a sizeable 145% over the 12 months to $34.6 million.
This led to Westgold finishing FY 2020 with a cash and equivalents balance of $137.6 million. Management notes that this means it is in a position to deal with future issues or interruptions to operations such as those presented by the COVID-19 pandemic.
A great improvement.
The company's Executive Chairman, Peter Cook, was very pleased with Westgold's improving performance.
He said: "These numbers depict great improvement for a Company emerging from a heavy development phase. Delays in the ramp-up at Big Bell resulted in that mine having less impact on total outputs for the year. However, this shows the robustness of the other assets in the Group, generating good profit and delivering a dramatically improved cash balance at year end, despite $178 million of capital expenditure."
"Further, corporate debt (gold loan of approx. $26m) was fully repaid and our hedge position is approx. 8% of ore reserves with the average hedged price improving significantly ($235/oz) over the previous year," he added.
FY 2021 guidance.
Mr Cook appears very positive on the company's prospects in FY 2021.
He said: "Westgold is primed for a big FY2021 with Big Bell ramp-up enabling consistency and growth in gold output. The long-term outlook is even more positive with substantial leverage from our long-term production profile underwriting massive opportunity for our shareholders to create real wealth."
Management has provided guidance for production of 270,000 to 300,000 ounces with an AISC of $1,460 to $1,560 per ounce.
