Gold Road Resources (ASX: GOR) today provided its activities report for the quarter ending 30 September 2020.
HIGHLIGHTS
Production and Guidance
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Gruyere produced 55,919 ounces of gold (100% basis) during the quarter (June quarter: 71,865 ounces) in line with updated quarterly guidance of 53,000 to 57,000 ounces. Gruyere is on track to meet 2020 annual guidance of 250,000 to 270,000 ounces (100% basis).
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Gold Road delivered its September 2020 quarter production at an AISC of A$1,488 per attributable ounce (June quarter: A$1,233 per ounce) below the revised quarterly guidance of A$1,540 to A$1,590 per ounce. Annual AISC for 2020 is maintained at between A$1,250 to A$1,350 per ounce.
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Gruyere ore tonnes processed totalled 1.9 Mt at a head grade of 1.03 g/t Au and a gold recovery of 91.5%. Plant utilisation was below target at 87% due to additional downtime to configure the milling circuit as the plant transitioned to fresh rock processing and the previously reported failure of a ball mill motor bearing late in the quarter.
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As guided, the September 2020 quarter was higher cost as the operation transitioned from oxide to fresh rock ore processing. The December 2020 quarter is anticipated to be a stronger quarter aligning with annual guidance.
Financial and Corporate
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Gold Road’s gold sales totalled 31,480 ounces at an average price of $2,420 per ounce and included delivery of 8,605 ounces at an average price of $1,790 per ounce into hedges as they fell due. Gold doré and bullion on hand at 30 September 2020 totalled 1,811 ounces.
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Free cash flow of $48.7 million was generated for the quarter, prior to the repayment of debt and includes proceeds from the sale of listed investments. Underlying free cash flow (before sale of investment) for the quarter was $22.2 million (June quarter: $23.8 million).
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The Company ended the quarter in a strong position with cash and equivalents of $103.0 million (June quarter: $109.1 million) and no debt (June quarter: $25 million) asthe remaining $25 million of debt was repaid.
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Gold Road announced a dividend policy during the quarter. Subject to Board discretion, it is anticipated that an inaugural dividend will be declared for the six month period ended 31 December 2020.
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As part of an ongoing capital management strategy to ensure a liquid and flexible balance sheet, Gold Road increased its revolving corporate debt facilities to $250 million3 . This facility remains undrawn and is reserved for general corporate purposes and potential growth opportunities.
Discovery
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In line with our strategy of making meaningful discoveries, aircore, RC and diamond drilling continued to focus on new targets in the relatively underexplored 100% owned Southern Project Area, including the Savoie, Beefwood, Hirono, and Kingston prospects.
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Assays were returned from Gilmour drilling completed earlier in the year which include 4.0 metres at 16.58 g/t Au and 6.78 metres at 5.33 g/t Au.
