Mid‐tier gold producer and exploration company Gold Road Resources (ASX: GOR) and Gold Fields have announced that commercial production was attained at the end of September 2019 at the Gruyere Gold Mine, located approximately 200 kilometres east of Laverton in Western Australia.
· Gruyere attains commercial production at the end of September 2019
· Annual guidance for 2019 gold production (100% basis) now anticipated at the upper end of guidance range of 75,000 to 100,000 ounces
· All-in Sustaining Cost unchanged for December 2019 quarter between A$1,050 to A$1,150 per ounce, as guided in February 2019
Commercial production was attained slightly ahead of guidance for mid-way through the anticipated ramp-up period of 6 to 7 months. The ramp up commenced after the commissioning of the ball mill in early August 2019.
Management determined commercial production based on a pre-determined minimum total process plant throughput rate of 70% of nameplate capacity, and a minimum average gold recovery of 85% of expected life of mine metallurgical recovery, measured over a month, with the expectation that these metrics will continue to be met or exceeded in the future.
Costs incurred in developing and commissioning the Gruyere Project, including the process plant and associated infrastructure, have been capitalised to the balance sheet up to the point of commercial production. Having attained commercial production, reporting of All-in Sustaining Cost (AISC) and other financial metrics will commence.
As throughput rates and gold recoveries during ramp-up have been above expectations, the Gruyere Joint Venture now anticipates gold production for calendar 2019 to be at the upper end of guidance of 75,000 to 100,000 ounces (100% basis).
AISC for the December 2019 quarter is guided between A$1,050 and A$1,150, slightly higher than forecast life-of-mine average (A$1,025 per ounce) as production continues to ramp-up to full nameplate capacity.
This AISC range is in line with guidance released in February 2019. The Final Forecast Capital Cost remains within the previously announced A$621 million (100% basis, +/- 2%).
Gruyere is a global Tier 1 gold mine with a long operating life and forecast high margins. Life-of-mine average annual production is forecast at approximately 300,000 ounces per annum at average AISC over a 12-year life of approximately A$1,025 per ounce.