Gold Road Resources Ltd has released results for the first half of the 2017 financial year, reporting a net profit before tax of A$313.4 million and earnings result of 26.57 cents per share, which Managing Director Ian Murray described as transformational. He said the decision to partner with Gold Fields on Gruyere had not only fast‐tracked and de‐risked that low‐cost and long‐life gold deposit, but also allowed the Company to accelerate its evaluation of the broader Yamarna tenements through its A$22 million greenfields exploration budget.
HIGHLIGHTS
- Net profit before tax for the period was A$313.4 million
- Net profit after tax for the period of A$232.5 million
- Earnings result of 26.57 cents per share
- Total cash, term deposits and short term receivables of A$434.2 million
- Fully‐funded for 2017 accelerated exploration programme and Gruyere Joint Venture commitments
- Funding and construction of flagship Gruyere Project significantly de‐risked
Well‐funded mid‐tier gold development and exploration company, Gold Road Resources Limited (Gold Road or the Company), is pleased to release results for the half‐year ended 31 December 2016. The A$350 million Joint Venture transaction with Gold Fields Limited (Gold Fields) over the Gruyere Gold Project (Gruyere) has positioned the Company for future growth through its gold production and accelerated exploration programme.
This milestone half‐year result for Gold Road was achieved primarily through the successful completion of the transaction with Gold Fields for the development of Gruyere under a 50:50 Joint Venture with Gold Fields as Project Manager, which resulted in a diluted earnings per share of 26.57 cents compared to a loss per share of 0.38 cents in the 2015 corresponding period.
The Company posted a net profit for the half‐year, before tax, of A$313.4 million, which included the gain from the sale of the Gruyere tenements of A$314.3 million as well as the profit on closure of forward sales contracts of A$11.9 million. The profit after tax for the period was A$232.5 million.
At the end of the first half, Gold Road had a total current cash, term deposits and receivable of $434.2 million, up almost 500% on the 30 June 2016 position. This provides a strategic surplus over and above the Company’s contributions to the Gruyere development budget, which was A$514 million in the Feasibility Study (ASX announcement dated 19 October 2016), and its accelerated greenfields exploration budget commitment of A$22 million for 2017.
Gold Road Managing Director and CEO Ian Murray said: “The first half of the 2017 financial year was transformational for Gold Road. The decision to partner with Gold Fields on Gruyere has not only fast‐tracked and de‐risked that low‐cost and long‐life gold deposit towards production, but also allowed us to accelerate our evaluation of the broader Yamarna tenement holding ‐ committing A$22 million to doing what we do best, greenfields exploration.”
“Our strengthened balance sheet will not change Gold Road’s disciplined and systematic approach to exploration, but it will allow us to pursue multiple high‐priority targets across both our 100% owned and joint venture tenements, where we are targeting the discovery of additional standalone deposits in the current financial year. We have secured the dominant land position on the Yamarna Greenstone Belt as a result of our early mover status in the region, which we will fully leverage to our advantage.”
“The current strength of our balance sheet will allow us to easily fund our share of the Gruyere development as well as evaluate our highly prospective tenement package which will underpin the continued growth of Gold Road into a cash generative mid‐tier gold development and exploration company.”
The transition of the Gold Road Project Team to the Project Manager, Gold Fields, was completed in the March 2017 quarter without interruption to the Early Works programme, which commenced in the December 2016 quarter with the relocation and construction of the 300‐person construction camp and associated works.
The total exploration budget across the Yamarna Greenstone Belt for 2017 will be A$30 million, including contributions from joint venture partners, with Gold Road committing A$15 million for exploration on its 100% owned North Yamarna tenements; A$5.5 million for exploration on the Gruyere JV tenements (50% Gold Fields); and up to A$2 million for exploration on the South Yamarna Joint Venture tenements (50% Sumitomo Metal Mining Oceania Pty Limited).
The exploration programme commenced in the March 2017 quarter, with a Reverse Circulation and diamond drilling campaign focused on the high priority Ibanez Prospect located in the north‐eastern part of the Pacific Dunes‐Corkwood Camp Scale Target, within the Company’s 100% owned North Yamarna tenements, approximately 55 kilometres north‐west of the Gruyere Deposit.