The Gruyere gold mine could become one of the deepest pits in Western Australia if the stars align, Gold Road Resources managing director Duncan Gibbs told delegates on stage at Diggers and Dealers yesterday.
It has been a prosperous year for Gold Road, having signed off on its first full year as a gold producer following its inaugural pour in June 2019 and delivering about 230,000 ounces of the precious metal, which generated a net profit of $23 million for the six months to 30 June 2020.
Mr Gibbs said that in looking at Gruyere in the longer term, Gold Road sees enormous opportunity of the operation through increasing the plant throughput capacity.
He said Gold Road has the potential to get the pit to a deeper level than what came out of the Bankable Feasibility Study.
“Conceptually, we think we can get the pit down to somewhere around 450 metres below surface,” he said.
“That would make Gruyere one of the deepest pits in Western Australia.
“Of course, to get that right, we need to understand the geotechnical parameters well. We’ve done some geotechnical and metallurgical drilling under the pit, so we have that information in hand.”
The early success of Gruyere, a 50:50 joint venture between Gold Road and South African miner Gold Fields, led the Perth-based company to flag in its recent annual report the release of fully franked dividends to its shareholders; a milestone that was reiterated by Mr Gibbs yesterday.
“We became debt-free back in July and we’re building our capacity towards around $100 million net cash,” Mr Gibbs said.
“That means we’ve got the capacity to do mine development or invest in value-accretive opportunities.
“We’ve also recently put a dividend policy in place. It’s quite an exceptional position for a company that really only got a mine up and going a little over a year ago to be able to start paying dividends back to shareholders.”
The miner has forecasted it will produce up to 270,000oz over the course of 2020, at an all-in sustaining cost (AISC) of between $1,250 and $1,350 per oz.
