Mid-tier gold production and exploration company Gold Road Resources Limited (ASX: GOR) has provided a production update following significant rainfall in March.
Gold Road’s principal asset is a half-share in the Gruyere gold mine, in Western Australia’s north-eastern Goldfields. The Gruyere JV is a 50:50 joint venture with Gold Fields (JSE: GFI), which manages and operates the Gruyere gold mine. In addition, Gold Road also has a significant investment portfolio.
Following the substantial and protracted regional rain event reported in early March, the access roads to Gruyere were impacted by further significant and atypical rainfall in the second half of March. Roads in the Laverton and adjacent shires have been closed by the local authorities for an extended period. The Great Central Road, the main supply route to Gruyere, has been closed since March 5 because of areas of extensive flood damage.
As a result of the unforeseen circumstances and unprecedented road closures, reduced mining has occurred at Gruyere since March 5. Processing of low-grade stockpiles has continued through most of the rain-impacted period but plant operations were suspended from March 28, with a scheduled plant shutdown for maintenance brought forward to minimise the impacts on annual gold production.
Preliminary gold production for the March quarter totalled approximately 64,300 ounces (100% basis), with minor adjustments possible when refining of gold doré has been completed. Final gold production and all-in sustaining costs for the quarter will be released in Gold Road’s quarterly report in late April. The AISC is expected to be impacted by lower gold production and lower mining volumes.
The Gruyere JV has been collaborating with the Laverton shire, Yilka and other communities to complete repairs to the Great Central Road, utilising earthmoving equipment and personnel from Gruyere. Repairs through the flooded impassable sections of the road are likely to take some time.
It is anticipated operations at Gruyere will progressively resume during the first week of April.
As a result of the extended impact of the rainfall events, 2024 annual guidance for Gruyere is anticipated to be in the lower half of previous guidance of between 300,000 and 335,000 ounces (150,000 to 167,500 ounces attributable) and the upper half of attributable AISC of between A$1,900 and A$2,050 per ounce. As stated previously, mining rates improved significantly during February (prior to the rain event) and mining and production remain guided to continue to ramp up through the first half of the calendar year with stronger production performance anticipated for the second half of the year.
For the March quarter, Gold Road’s gold sales totalled 32,325 ounces at an average sales price of A$3,137 per ounce. Gold doré and bullion on hand on 31 March 2024 were approximately 1,825 ounces. Cash and equivalents at the end of quarter totalled $146.2 million, with no debt drawn.
