S&P/ASX 200 Index (ASX: XJO) gold stock Westgold Resources Ltd (ASX: WGX) is having a day to forget today.
Shares in the West Australian gold producer closed yesterday at $2.93. In morning trade on Thursday, they crashed to $2.64, down 9.9%. At the time of writing, they have recouped some of those losses, changing hands for $2.71 apiece, down 7.5%.
For some context, the ASX 200 is down 0.6% at this same time.
As you can see on the chart above, longer-term shareholders shouldn't have much to complain about. Despite today's tumble, the ASX 200 gold stock remains up 38% since this time last year.
Here's what's happening today.
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ASX 200 gold stock tumbles on production update
The Westgold share price is taking a beating following the release of a preliminary production update.
The ASX 200 gold stock reported producing 80,886 ounces of gold in the second quarter of FY 2025, up from 77,369 ounces produced in Q1. This brings Westgold's total half-year production for FY 2025 to 158,255 ounces of gold, which management said was consistent with its guidance.
The miner has previously flagged that it expected to see stronger gold production in the second half of the year. That should be driven by Westgold's South Junction, Big Bell Deeps and Great Fingall projects, which are expected to ramp up production.
But investors may be pressuring the ASX 200 gold stock today, with first half-year gold production coming in at well below half the miner's full-year guidance range of 400,000 to 420,000 ounces. Indeed, to meet the upper end of that range, Westgold will need to produce more than 260,000 ounces of gold in H2.
This isn't to say that Westgold might not achieve that target.
In today's update, the miner noted that the ramp up at both its Bluebird and Beta-Hunt underground mines was continuing apace. And with the development of its Great Fingall mine on track, Westgold is anticipating the first ore from the mine Q4, FY 2025.
What did management say?
Commenting on the preliminary results that look to be pressuring the ASX 200 gold stock today, Westgold CEO Wayne Bramwell said, "Q2, FY 2025 saw Westgold continue to optimise its expanded, post-merger business."
Bramwell added:
Production increased whilst we continued to heavily invest in the long-term capacity of our mines in the Murchison and Southern Goldfields. Investment to support increased and sustainable production from our principal mines was the key focus of our activities over H1, with multiple growth projects advancing in parallel across the expanded group…
To drive our long-term cost base down, plant expansion studies at Higginsville, Bluebird and Fortnum are advancing with initial capital estimates to be reported shortly.
To extend mine lives, our underground drilling fleet is fully deployed across the group and surface drill contractors are active at Peak Hill and Higginsville.
Turning to the balance sheet, on 31 December, Westgold had cash, bullion and liquid investments of $152 million. Adding in the $250 million undrawn from its $300 million corporate facility, the ASX 200 gold stock reported financial liquidity of $402 million at hand.
