Mid‐tier gold producer and exploration company Gold Road Resources (ASX: GOR) has presented its activity report for the quarter ending 30 September 2019. The Gruyere gold mine is a global Tier 1 gold mine with a long operating life and forecast high margins, located approximately 200 kilometres east of Laverton, in Western Australia.
HIGHLIGHTS
· Production and Guidance
· Gruyere ramp‐up is progressing well, with commercial production attained at the end of September 2019, slightly ahead of guidance
· Gruyere produced 29,107 ounces during the quarter (100% basis)
· 2019 annual guidance range reaffirmed at the upper end of 75,000 to 100,000 ounces (100% basis)
· AISC unchanged for December 2019 quarter between A$1,050 to A$1,150 per ounce
· Financial and Corporate
· As at 30 September 2019:
· Gold Road had cash of $65.3 million and bullion of A$5.8 million on hand
· Gold Road had a net debt of A$9.3 million, with A$80.4 million of its A$150 million facility drawn
· Gold Road has hedged 125,300 ounces at an average price of A$1,837 per ounce for delivery between 1 October 2019 and 30 September 2022
· Gold Road sold 12,461 ounces of its share of gold from Gruyere at an average price of A$2,052 per ounce.
· On 22 August 2019, Gold Fields Ltd sold its 9.9% shareholding in the Company as part of a broader debt reduction strategy
· Gold Road joined the ASX200 Index and the GDXJ ETF1 in September 2019
· Discovery
· Diamond drilling is near‐complete at Gruyere to enable conversion of a significant portion of the current Inferred Resource to Indicated Resource status in support of future optimisation of the mine plan and mine infrastructure. Results include 36.2 metres at 2.44 g/t Au from 282.8 metres, 44.9 metres at 1.80 g/t Au from 270.1 metres and 73.4 metres at 1.80 g/t Au from 288.6 metres.
· At Yaffler South (100% owned), bedrock RC drilling intersected coherent and consistent mineralisation. Better results include; 11 metres at 5.94 g/t Au from 74 metres, 12 metres at 3.40 g/t Au from 116 metres and 12 metres at 2.71 g/t Au from 59 metres. Drilling continued during the quarter with assays expected in the December 2019 quarter.
Life‐of‐mine average production is forecast at approximately 300,000 ounces per annum at an average All‐in Sustaining Cost (AISC) over a 12‐year life of approximately A$1,025 per ounce. Gruyere is a 50:50 joint venture with Gruyere Mining Company Pty Ltd, a member of the Gold Fields Ltd group (Gold Fields), who are the operators and managers of Gruyere.
Gruyere delivered another quarter of milestones as project development was completed within budget, commissioning of all processing circuits was completed, and commercial levels of production were attained at the end of the quarter and slightly earlier than guidance.
The excellent safety performance at Gruyere continued with a zero Total Recordable Injury Frequency Rate (TRIFR) at 30 September 2019. As at 30 September 2019, Gold Road’s (100% owned) exploration operations rolling 12 month TRIFA was 16.6 (22.1 at 30 September 2018) with one recordable injury during the quarter.
