All right, thanks everybody. So, I'm here today with Wayne Bramwell. He is the CEO of Westgold Resources. Westgold is a 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 hair in Western Australia because of his beautiful locks, and he should flaunt them if he has them. So, if I could grow straight hair like that, I would do that, too. And we're very happy to have him here today. Westgold is a $5 billion Aussie-based company. It has 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 to mining in Western Australia. So, Wayne, thank you very much for being here today.
Pleasure to be here with you today, Chris.
Yes, yes, yes. 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 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, you know, how it all started?
Quick potted summary. I'm a West Australian by birth, born in Perth, grew up in Perth, studied in Perth, went to university to do metallurgy, mineral science, metallurgy. And WA is one of those fantastic locations. When we talk about WA as the Silicon Valley of mining. So, within the state, we have exposure to every commodity. So, stepping into a mining profession, your opportunities to work in different commodities all exist within Western Australia. So, in terms of choosing metallurgy as a degree was a bit of a happy accident. Didn't know much about the role, but clearly when I started studying in the early '90s, the Australian mining sector 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 it's been a great journey so far.
That's great. 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?
Sort of probably a similar transition to a lot of mining professionals. You know, you graduate green out of university with a mining degree or a surveying degree or geology and you get sent to a mine. So, as a metallurgist, you know, my first operational role was in iron ore with BHP in Port Hedland. And so, you get thrown straight into a processing plant. Spent 2 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, pyrometallurgy in the southwest of Western Australia. And that was operating an electric arc furnace to produce silicon.
So, that was sort of a journey through operations and then that 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 an explorer originally as the CEO, then a developer as the CEO, and now into this role at Westgold, which is an operating company.
Right. So, immediately before you joined the board of Westgold — so before you became the CEO, you were on the board, right? So, can you talk about why you joined the board, maybe what attracted you to Westgold when you did, and then how you made that transition to CEO?
It's maybe a little atypical in some sense. So, I was actually running a family office in Western Australia for an eccentric West Australian billionaire. 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, 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 hit Western Australia pretty much March or April. So, that was an interesting time to 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 to 2021, I 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 of organizational 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 MD happened in 2022.
Okay, great. And so, the family office was in Perth also. Okay, great. All right, yeah, you said. So, just if we can take a step back then. So, 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, we're saying when you're swimming, a fish swimming in the water, you might not realize that you're wet. But from our perspective looking at mining companies globally, it's really amazing to see what goes on in Western Australia, Perth and the Kalgoorlie region and all that. 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?
You know, I've been lucky during my professional career. I've worked overseas and I worked in Africa for 11 years. I worked 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 yeah, WA is a great place to operate for gold and as a statistic, today I think there's 42 operating gold mines in Australia.
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 are still coming out of a state where I grew up.
Yeah. Right. So, okay. Now, the other thing again that I find striking about it is that when I — so I was there and I visited one of your mines in November.
And 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. But you see people in the airport in their mining gear. And they're walking in their mining kit, you know what I mean? And there are people walking around the street in mining kit. And then you go to Kalgoorlie, which is like a 2-hour flight inland from Perth. And that's again a beautiful little town, you know, where it's a mining town, but I would've figured, you know, when I first went there, mining town, I figured I'd have to go to a bar and fight my way to the bar 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 it's a town of 20 or 30,000 people, and it's all mining. Like that's all anybody's doing, 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 Perth and in Kalgoorlie, and just that part compared to Africa or Russia or whatever?
Well, even on an Australian basis, I mean, WA understands mining. I mean, gold is now Australia's second largest revenue earner.
So, the bulk of that revenue is coming out of Western Australia. WA, because of its mineral endowment and resource endowment, you know, it is a 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 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, yeah, because they know that's what we do. The press talk 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 mind. On the east coast of Australia, probably not so.
Right. And you can 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 here in the northeast United States, where I grew up and everything, you don't really get it. Like mining engineering, forget it. Like nobody here would even think of doing that for a degree. And 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 talk a little bit — and like the skills that are embedded there?
Certainly, I can talk to that in some detail. I mean, in my later life, I did a 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 and I mean we call it the Harvard of 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 Mines for many years, Chris, I mean it didn't generate enough professionals for the industry. Now 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 I can tell you now the West Australian School of Mines intake for this year was something like 130 young people who are 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 — 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 have got a lot of employment and we're under-resourced for people. So I encourage 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.
It's 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 I visited your Beta Hunt mine. Can you talk a little bit about the benefit of being in Kalgoorlie specifically and in terms of the infrastructure that's there and how that even — and that was a relatively recent acquisition, Beta Hunt, and kind of what you saw, what you liked about Beta Hunt and Higginsville, which is close to Beta Hunt, near Kalgoorlie as well. But can you talk about like what you see there from an infrastructure perspective that makes it attractive to you?
Just for context and maybe for your listeners, you know, Kalgoorlie is the epicenter of the Western Australian gold industry. You could even look at Kalgoorlie and there is a similar town on the East Coast where when you think about gold you might think about Ballarat or Bendigo. In Western Australia, Kalgoorlie if you like is the epicenter of the gold sector and our appeal to assets that we acquired south of Kalgoorlie, it really was prime real estate. It's a tier one address for gold and the goldfields 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 goldfield, there's still a lot of opportunity down there and again much similar to maybe some North American mining fields. You know, it's been gone through periods of people 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 the goldfields for us was the mineral endowment of the goldfields, whether it's the northeastern goldfields north of Kalgoorlie or the southern goldfields where we work, the mineral endowment in those two belts is probably the biggest endowment within Western Australia. Hence the appeal.
Right. And we can talk about that. And the other thing is that it's right — you can drive to site like you could...
Yeah, completely. I mean...
you know, have a nice espresso for breakfast and you...
You know, Australians are like quite, you know, have certain standards around coffee. I mean, we think 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 and operate mining mines in that region are there. Whether it's labor, heavy equipment, underground equipment, people to do surveying or exploration companies. There's a resource base there which makes doing business around Kalgoorlie much easier than some of the other parts of Australia.
Yeah, I was talking to somebody else at a conference here and they are operating a mine in British Columbia, like kind of remote British Columbia. And they had one part of a coupler on a gearbox and it took him eight days to get that one piece of equipment, right? To be able to remove it, you know, whatever it broke. And whereas you guys, you know, there's something right in town, right? I mean, like there'd definitely be like another coupler, you know, 20 of them in inventory right in town.
And certainly, I mean, it's a small town, Kalgoorlie. It's, you know, 5 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-in fly-out where you can live in Perth and you can fly to a remote project and work for 7 days, 8 days and then fly home. You know, that thematic is in some sense no one really wants to run or no one really wants to work on a fly-in fly-out basis. I mean, really those regional towns have suffered over the many years when fly-in fly-out has become more prevalent. I mean, as a young professional I worked in Port Hedland. It wasn't fly-in fly-out. It was a mining town. You know, there was a stronger community.
Yeah. It's nicer. Yeah, yeah. So, hopefully that'll — do you think there's the potential for that to start coming back into...
I think so. I think so. Certainly in Australia now there's, you know, there's far more focus on trying to re-activate 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 Kalgoorlie where there is plenty of employment and that's the key. Plenty of employment. Often the struggle in these towns is accommodation. You know, and that's where government and industry are working together now to try and remove some of these hurdles so that more people can come to these regional centers and live.
Yeah, okay, great. So, kind of, you know, continuing with that point, there are a lot of people in Australia, there's an enormous — 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. 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 high cost of labor, but then how you're able to balance that with high efficiencies?
And very much, you know, 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 only behind iron ore. This is an industry which continues to need people. So, what do we do in a scenario where our demand for labor 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 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 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 develop, bring new people into the industry and train them, show them that the career 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 the world's at and certainly within Australia the broader society starting to understand the contribution of the sector.
And is starting to see it now more as a positive force for change, not something which is destructive to the environment.
Right.
And you guys are able — I think you were telling me before this interview started that you get around 700 m per month in development. And that is a high number and you guys are really experts in underground development and being able to do it efficiently, which I think is a huge benefit. Can you talk a little bit about — Westgold's a little bit different also in terms of it having an employee-based workforce that works underground as opposed to most others in Western Australia, which are contractor-based? What the positive and negatives of that are, and also what you're doing specifically to kind of help lower your turnover and also how you might be positioned relative to others in terms of getting your turnover maybe lower than others.
It's a key point, Chris, and certainly in North America or Canada, quite typical that you're an 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 over 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 4 years, whereby when I first started, we had seven underground mines running, and we operated all of them. So, we were an owner-operator, 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 exposure to the equipment. As a contract miner, you're not exposed to that workforce directly. You as the contractor are bringing those people, they're yours, and you're bringing your equipment. So, we are as the owner only exposed to the people and the capital via your monthly charge. So, in some sense, not being an owner-operator normally reflects in a smaller workforce, and 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 as we start to change that balance from 100% owner to a more hybrid model of 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, but certainly 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...
short, you know, that's a problem.
