Gold Road Resources (ASX:GOR) has closed out a 50,000 ounce forward sales program, realising a A$11.92 million pre-tax profit. The forward sales program was established as part of planned financing for Gruyere. Following the transaction with Goldfields, this was no longer a requirement and the facility was closed. The Company is open to new forward programs where it can lock in significant price rises.
Highlights
- Gold Road closes out its 50,000 ounce gold Forward Sales facility with the Commonwealth Bank of Australia
- Realising a pre‐tax profit of A$11.92 million
- Facility was to support potential Gruyere Project Financing activities ‐ no longer required post Gruyere Joint Venture with Gold Fields Ltd.
Gold Road Resources Limited (Gold Road or the Company) is pleased to advise that it has closed out its margin gold Forward Sales facility with the Commonwealth Bank of Australia for a pre‐tax profit of A$11.92 million. A total position of 50,000 ounces at an average gold price of A$1,791 per ounce had been secured in support of potential Project Finance for the Gruyere Gold Project.
The completion of the Gruyere Joint Venture (GJV) with Gold Fields Limited*, which fully funds Gold Road to production, reduced the requirement for the Company to have forward sales facilities in place so far in advance of gold production. In particular, as no Project Debt with associated mandatory hedging is required, Gold Road deemed it appropriate to close out its forward sales position given the changed funding circumstances associated with the GJV, thereby locking in immediate profits and reducing the risk associated with delivery of future gold.
Gold Road remains open to revised forward sales programmes to complement its share of the future Gruyere Gold Project production and plans to develop an appropriate strategy aligned with its risk management programme.
The Company recognises the contribution of Noah’s Rule in providing advisory services for these current activities, and Commonwealth Bank of Australia for the flexibility offered in setting up the original facility.