Emerging producer Gold Road Resources (ASX: GOR) has signed off on the June 30 half-year with $160.4m of cash and equivalents as efforts focus on completing construction of the world-class Gruyere gold mine development in the north-eastern Goldfields. As at August 31, Gruyere project engineering and construction was 95% and 68% complete, respectively. First gold is forecast for the June 2019 quarter.
The Directors present their interim report on Gold Road Resources Limited (Gold Road or the Company), which comprise the Company and the entities it controlled during the period and its share of Joint Operations for the six months ended 30 June 2018, and the review report thereon.
The names and details of the Directors of Gold Road during the period and until the date of this report, unless otherwise indicated, are:
Timothy Netscher, Non-executive Chairman
Ian Murray, Managing Director and Chief Executive Officer (CEO)
Justin Osborne, Executive Director – Exploration and Growth
Sharon Warburton, Non-executive Director
Brian Levet, Non-executive Director
Hayden Bartrop, Joint Company Secretary, General Manager – Corporate Development & Legal
Carol Marinkovich, Joint Company Secretary
REVIEW OF OPERATIONS AND FINANCIAL RESULTS
The net loss before income tax for the six months ended 30 June 2018 was $3.0 million (six months ended 31 December 2017: $3.4 million loss). Included in the loss before income tax is the impairment of exploration expenditure of $0.5 million (six months ended 31 December 2017: $1.9 million).
Loss after tax for the six months ended 30 June 2018 was $2.3 million (six months ended 31 December 2017: $2.5 million loss).
At the end of the six month period the Company had total current assets of $163.7 million (31 December 2017: $256.9 million) which includes cash and cash equivalents of $160.4 million (31 December 2017: $236.8 million), and current receivables of $2.5 million (31 December 2017: $19.2 million).
Capitalised mineral exploration and evaluation expenditure at the end of the period is $54.4 million (31 December 2017: $38.7 million) and the expenditure incurred during the six month period, before any impairment charges, is $16.2 million. Property, plant and equipment at the end of the period is $207.8 million (31 December 2017: $130.6 million) and the expenditure incurred during the six month period is $74.2 million relating to assets under construction but excluding the increase in the rehabilitation asset.
REVIEW OF DEVELOPMENT
Despite disruptive above-average rainfall in February 2018, there was significant progress in construction at the Gruyere Project. Gruyere’s development is being managed by Gruyere Management Pty Ltd, a wholly owned subsidiary of Gold Fields. As at 31 August 2018, overall project engineering and construction was 95% and 68% complete, respectively, with EPC construction 49% complete, with the Gruyere Project forecast first gold production in the June 2019 quarter.
All long-lead items for the Gruyere process plant, including SAG and Ball mills, have been transported to site from Perth with installation well underway by the EPC contractor, Amec Foster Wheeler Civmec Joint Venture.
The 198 kilometre Yamarna Gas Pipeline was completed in June ahead of schedule. Integrity testing and commissioning of the 45 MW Gruyere Power Station is in progress and expected to be completed in the September 2018 quarter.
During the period, MACA Limited completed the main bulk earthworks package and is now busy with a second package of work, largely associated with the lining of the TSF.
Construction of Downer EDI’s mining and workshop facilities are nearing completion ahead of the scheduled mining workforce mobilisation in the December 2018 quarter. Downer EDI, which was awarded a five-year mining services contract, is anticipating completing pre-strip activities and commencing mining ore on the Gruyere open pit in early 2019.