Westgold Resources (ASX: WGX) has confirmed its commitment to the Cue Expansion Plan (CXP), a capital-light initiative designed to increase throughput at the company's Cue processing hub in Western Australia's Murchison district — a region with a long history of gold production that has seen renewed investment interest as mid-tier producers prioritise asset utilisation over greenfield development.

The expansion will raise the hub's processing capacity from a current run rate of 1.4 million tonnes per annum (Mtpa) to 1.7 Mtpa by FY28. Managing Director and CEO Wayne Bramwell described the plan as part of a broader strategic shift toward processing hub optimisation across Westgold's operations, an approach that aims to spread fixed operating costs over greater volumes to lower per-tonne processing costs.

The CXP is underpinned by growing underground mine output from the Big Bell and Great Fingall mines, both located near Cue.

"Bigger mines need bigger mills. Westgold's underground mine outputs are growing across all the Murchison operations and building ore stockpiles from FY27 onwards," Bramwell told shareholders.

"In addition, open pit mining is now underway at Cue and Meekatharra, with this organic growth underpinning the incremental expansion of our Cue business. This simple upgrade and modest capital investment at the Cue hub reflects a deliberate shift towards processing hub optimisation and expansion, with lower operating costs and higher cashflow the objective."

The plan also includes the development of small open pits at Cue, along with near-hub open pit resource development opportunities at Big Bell South and Cuddingwarra.

"These targets are larger, are within approximately 50km of our Cue hub and if drilling is successful, can add significant additional ore sources in FY28," Bramwell said.

Additional ore supply could come from existing sources currently in production, including the Fender underground mine and smaller open pits near Cue. Bramwell also noted potential for third-party ore supply through existing ore purchase agreements, as well as from Westgold's brownfields open pit resource targets at Big Bell South and Cuddingwarra, subject to successful drilling results.

On the technical side, study work indicates that increasing the mill motor power from 2.9MW to 4.2MW — achieved through a replacement liquid-cooled motor and variable speed drive, along with associated system and pumping upgrades — will support operation at the higher duty. The process plant upgrade is designed to raise milling circuit throughput from the current nominal 170 tonnes per hour (t/h) to 200 t/h.

The expansion is scheduled for completion in late FY27, with the higher installed capacity expected to support an increase of approximately 15,000 ounces per annum (15kozpa) from the Cue hub beginning in FY28.

Westgold said it will now progress detailed engineering, procurement planning, and execution sequencing for the CXP, while continuing brownfields drilling at near-mill opportunities to define future ore optionality.

At the time of reporting, WGX shares were up 2.27% at $4.96, with a market capitalisation of $4.557 billion.