Mid-tier gold production and exploration company Gold Road Resources Limited (ASX: GOR) has released its activities report for the quarter to 31 December 2022 as well as its annual 2022 Mineral Resource and Ore Reserve statement.
The December quarter highlights included achieved full-year guidance at Gruyere, significant investments and exploration success. The Gruyere JV is a 50:50 joint venture with Gruyere Mining Company Pty Ltd, a member of the Gold Fields Ltd group which manages and operates the Gruyere gold mine in Western Australia’s north-eastern Goldfields.
Production and Guidance
- Gruyere produced 74,201 ounces of gold (100% basis) at an AISC of A$1,622 per attributable ounce during the December 2022 quarter (September quarter: 83,635 ounces at an AISC of A$1,426 per attributable ounce).
- Production was reduced quarter on quarter due to lower process plant availability resulting in lower plant throughput and delays in accessing and processing higher-grade portions of the Stage 3 pit.
- 2022 annual production from Gruyere totalled 314,647 ounces meeting annual guidance of 300,000 – 340,000 ounces. Gold Road’s attributable production of 157,324 ounces was delivered at an AISC of A$1,447 per ounce falling within annual guidance of between A$1,270 – A$1,470 per ounce.
- 2023 annual production is set to increase to between 340,000 – 370,000 ounces (170,000 – 185,000 ounces attributable) at an attributable AISC between A$1,540 and A$1,660 per attributable ounce. Grades are expected to lift into 2023 as mining progresses through fresh ore from the higher-grade Stage 3 and 4 pits. AISC costs are modelled in the current inflationary environment and include the capital cost for the third pebble crusher and a tailings dam lift during the year. No additional growth capital expenditure is guided.
Financial and Corporate
- Gold Road’s gold sales totalled 37,295 ounces at an average price of A$2,476 per ounce and included delivery of 6,480 ounces at an average price of A$1,735 per ounce into the last remaining forward sales contracts. Gold Road’s production is now fully unhedged.
- Gold doré and bullion on hand on 31 December 2022 decreased slightly to 2,387 ounces.
- Gold Road’s attributable operating cash flow from Gruyere for the quarter was $47.3 million.
- Free cash flow was $16.5 million for the quarter (September quarter: $15.7 million) before a $26.0 million investment in De Grey Mining Ltd shares acquired through an institutional placement and Share Purchase Plan in October 2022 to maintain a 19.75% interest.
- Cash and equivalents decreased to $80.8 million (September quarter: $91.4 million) with no debt drawn.
- At 31 December 2022, Gold Road held listed investments with a market value of approximately $407 million.
- Gold Road’s attributable Mineral Resources of 4.79 million ounces have increased slightly (0.08 million ounces, 2%), as a result of an extension of the Gruyere Underground Mineral Resource offsetting mining depletion at the Gruyere pit and some minor downward revisions to various open pit resources. Gold Road’s attributable Ore Reserves have decreased by 0.21 million ounces to 2.02 million ounces since 31 December 2021, mostly as a result of mining depletion.
- Drill rigs continued to operate across Yamarna (Gold Road 100%) and Golden Highway (Gold Road 50%) project areas as the company continues to actively explore for a meaningful discovery.
- Positive results continue to be returned from the Golden Highway, the focus of RC and diamond drilling during the quarter, including 6.95 metres at 4.92 g/t Au from 258.55 metres (GHDD00003) from the Attila Deposit (Gruyere JV). Positive results have also been returned from the Khan Prospect (Gold Road 100%) along strike to the north of the Golden Highway and include 11 metres at 1.68 g/t Au from 50 metres (YMRC00406).