Shire of Coolgardie identifies potential sale of Bluebush Village to Westgold Resources for $22 million

The debt-ridden Shire of Coolgardie is poised to select a preferred buyer for its workforce accommodation facility in Kambalda — with any sale likely to reduce the local government’s financial embarrassment significantly. A meeting agenda item report to Tuesday’s shire council meeting recommends awarding preferred tenderer status to Westgold Resources, which has offered to buy Bluebush Village for $22.055 million. “The preferred tenderer has submitted an offer price that exceeds the shire’s independent valuation of the Bluebush accommodation village,” the report stated. “Should council ultimately proceed with the disposal and the land transaction settles as anticipated in March 2026, the shire will receive a one-off revenue payment that exceeds the value of all loan liabilities currently attributed to the Bluebush accommodation village.” The shire’s total debt was $27.52m at June 30, down from $30.49m a year earlier, with most of that having been driven by the construction of Bluebush Village in 2022. This shire’s own financial recovery plan released in August said the facility was financed through $22.5m in loans and $5.64m in lease-to-buy arrangements — which created a brutal repayment scenario. “Over the last three financial years alone, total interest payments have totalled $4.07m,” the plan said. “When combined with borrowing repayments of $17.67m over the same period, this results in a total of $21.47m directed solely to debt servicing.” The shire restructured its loans earlier this year to include interest-only periods to relieve the pressure on cash flow. The debt crisis prompted Local Government Minister Hannah Beazley to issue a show-cause notice in August, giving the council 21 days to explain why it should not be suspended. This move followed her calling for the shire and the City of Kalgoorlie-Boulder to consider a joint proposal for a “boundary readjustment”, which would essentially see the city take over the shire. Ms Beazley last month decided not to suspend the Coolgardie council, giving it 12 months to get its financial affairs in order. The sale of Bluebush Village shapes as an important step in that process — without the sale the shire’s financial recovery plan estimated it would take 10 years to repay the debt. The report to Tuesday’s meeting said three tenders were submitted for the purchase of the village — from mining company Astral Resources, an organisation called Goldfields Investments, and Westgold Resources. Westgold operates the nearby Beta Hunt underground mine and Higginville mines and processing plant, while Astral Resources is developing its Mandilla gold project in the area. The report said Westgold’s alternative offer — which also includes buying the rest of Lot 501 not included in the fenced-off village area — received the highest assessed score of 80 per cent, compared with its original offer (74 per cent), Astral (65 per cent) and Goldfields Investments (37 per cent). The tender evaluation panel’s criteria was price and offer, 60 per cent; similar experience, 15 per cent; demonstrated understanding, 10 per cent; and social and community value, 15 per cent. The report said Westgold’s alternative offer demonstrated strong operational capability, proven regional presence, financial certainty, and the lowest overall risk profile. “With the offer also including the purchase of the remaining portion of Lot 501, (an) additional approximately 10,600sqm, it removes the need for boundary realignment and provides a clear and straightforward transaction structure,” the report said. The report said preferred tenderer status did not commit the shire to selling the village, as the council must still consider public submissions on the business plan before making a final decision. “The shire is still required to complete the statutory process under section 3.59 of the Local Government Act 1995 (WA),” the report stated. “A final decision to dispose of the Bluebush accommodation village can only be made once the business plan has been prepared, publicly advertised for a minimum of six weeks, any submissions have been considered, and council has resolved whether to proceed with the disposal.” A time line in the report indicated a decision of whether to sell or not could be made in January — and, if approved, the sale could take place in March. “If council elects not to proceed with the disposal, the shire will retain ownership of the Bluebush accommodation village, continue operating the facility, and will therefore retain responsibility for any operational profits or losses arising from the ongoing management of the village,” the report said. “While the disposal would generate a significant one-off revenue for the shire, there are costs associated with running a thorough, compliant tender process. “Prior to commencement of the tender, it was estimated that the high-level estimated costs included approximately $2000 for statutory advertising, up to $40,000 for marketing (depending on the level of promotion undertaken), valuation costs of up to $30,000, probity costs of up to $10,000, settlement costs of approximately $10,000, and optional sales agent fees of up to 2 per cent of the offer price if council elected to appoint an agent. “These figures represented a full-scope, maximum-exposure estimate rather than anticipated expenditure. “In practice, the shire took a significantly streamlined approach: marketing was limited to approximately $6500, valuation and probity costs were lower than the upper estimates, and no sales agent was engaged. “As a result, actual expenditure to date is approximately $25,000, and total costs for the tender process are expected to remain well below the initial full-scope estimates.”