Gold Road Secures Forward Sales Facility up to 100,000 ozs
Gold Road Resources (ASX:GOR) has entered into a margin gold forward sales facility with the Commonwealth Bank of Australia (CBA) for up to 100,000 ounces of gold from its Gruyere Gold Project in Western Australia. To date, the Company has locked in forward sales contracts for 50,000 ounces at an average price of A$1791 an ounce. There is an option to increase the size of the facility to 150,000 ounces on satisfactory completion of the Gruyere Feasibility Study.
Gold Road Resources Limited (Gold Road or the Company) is pleased to advise that it has entered into a margin gold Forward Sales facility with Commonwealth Bank of Australia (CBA) for up to 100,000 ounces of Australian dollar denominated forward sales, in order to take advantage of the current historically high gold prices. The Company has the option to increase the facility size to 150,000 ounces on the satisfactory completion of the Feasibility Study for the Gruyere Gold Project.
The Company is required under the margin facility to lodge A$1 million as cash security for every A$1 million the mark to market difference exceeds A$15 million. The facility is otherwise unsecured with a negative pledge condition.
To date the Company has locked in forward sales contracts for 50,000 ounces at an average price of A$1,791 per ounce.
Should Project financing be selected as the preferred funding solution for the development of the Gruyere Gold Project, the forward sales executed with CBA, at close to record high Australian dollar prices, are expected to be rolled into a longer dated hedging program, enhancing the debt carrying capacity for the Project.
If a Joint Venture is the selected development route for the Project, then the forward sales will support a strong operating margin on Gold Road’s share in the gold produced from the Gruyere Gold Project.