Australia’s newest quality gold producer, Gold Road Resources (ASX: GOR), says the production and cost performance at the Tier 1 Gruyere mine 1000km north-east of Perth was on track to meet full-year targets following a solid March quarter.
Releasing its quarterly report this morning, Gold Road said the 50%-owned Gruyere mine had produced 59,595oz in the three months to March 31, on track to meet the full-year guidance of 250,000oz to 285,000oz.
Gold Road’s share of the ounces – Gruyere is operated by the other 50% owner, Gold Fields – were delivered at all-in sustaining costs of $1135/oz, with the full-year cost target of $1100 to $1200/oz on track to be achieved. Gruyere produced first gold in June 2019 and has been ramping up to life-of-mine average production of 300,000oz per year. Gold Road said it had acted early and proactively to deal with the coronavirus pandemic, developing plans to protect its people.
It also took the opportunity during the March quarter to pre-deliver 5800oz of its hedge book, ahead of their June quarter due date, to mitigate potential COVID-19 related delivery risks. Gold Road ended the March quarter with $115 million of cash and bullion for net cash of $35 million.
HIGHLIGHTS:
COVID-19
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Gold Road was an early mover in taking a proactive approach in developing a comprehensive response to the COVID-19 pandemic, focusing on supporting the health and welfare of our people and the surrounding community, and enabling the continuity of our core activities.
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Our business continues to operate in full compliance with the COVID-19 Framework developed in consultation between the WA Chamber of Minerals and Energy and the Government of Western Australia.
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The situation is evolving, and whilst there is currently no revision to annual production and cost guidance, there remains some uncertainty and risk to potential impacts on the Gruyere operation and our exploration programmes. Production and Guidance
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Gruyere produced 59,595 ounces of gold (100% basis) during the quarter and year to date, and remains on track to meet annual guidance (250,000 to 285,000 ounces – 100% basis).
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Gold Road delivered its March 2020 quarter production at an AISC of A$1,135 per attributable ounce and remains on track to meet annual AISC guidance (A$1,100 – A$1,200 per ounce).
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Gruyere ore tonnes processed totalled 1.9 Mt at a mill head grade of 1.05 g/t, and a gold recovery of 94.1%. Throughput rates were at or above design, offset by low plant availability at 83.4%. Metallurgical recovery remained 1 – 2% above expectations.
Financial and Corporate
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Attributable gold sales totalled 31,700 ounces at an average price of A$2,001 per ounce during the quarter. Bullion on hand at the end of the quarter totalled 257 ounces.
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The $50 million Working Capital Facility was repaid and retired during the quarter
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The Company ended the quarter in a strong liquidity position with cash and bullion on hand of $115 million, and the $100 million Revolving Credit Facility drawn to a total of $80 million, resulting in a net cash position of $35 million.
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Active management of gold forward sales obligations included pre-delivery of 5,800 ounces scheduled for the June 2020 quarter, to mitigate potential COVID-19 related delivery risks.
Discovery
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A significant increase of 1.2 million ounces (29%) to the Gruyere JV Measured and Indicated Resources to 6.1 million ounces was achieved through the upgrade of Inferred Resources.
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In line with our clear strategy to make meaningful discovery, early stage drilling is now focused on the relatively underexplored 100% owned Southern Project area.
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Diamond drilling at the Gilmour Deposit intersected high-grade mineralisation including 5.62 metres at 36.64 g/t Au and 4.64 metres at 43.78 g/t Au.
