On eve of first gold from Gruyere, BlackRock lifts stake in Gold Road to 9.34%
The world’s largest investor in mining stocks, BlackRock Group, has used weakness in the share price of Gold Road Resources (ASX: GOR) during the week to significantly top up its holding in the Perth company.
A change in substantial shareholding notice filed by BlackRock on Thursday disclosed that its stake in Gold Road had increased from 7.54% to 9.34%, mostly of the result of strong on-market buying by the investor on Tuesday.
The BlackRock buying coincided with a weak performance by Gold Road’s share price on Tuesday, triggered by profit taking and index reshuffling, that saw the stock fall almost 9% to 99.5c. BlackRock used that dip to boost its stake, its shareholding update shows.
The increased support from BlackRock comes as UK broker Numis talked up Gold Road’s exploration potential across the Yamarna Greenstone Belt, highlighted by the latest results from the Gimour-Morello target, and the fact first production from the world-class Tier 1 Gruyere gold mine was imminent.
Numis has a $1.20 a share target price and buy recommendation for Gold Road.
Gold Road managing director Duncan Gibbs told shareholders at the company’s annual meeting on Wednesday that first production from Gruyere - in Western Australia’s north-eastern Goldfields - was imminent, in line with past market guidance of late in the June quarter.
Gruyere, a $621 million development in joint venture with Gold Fields, is targeting average annual production of 300,000 ounces over a 12-year life, with all-in sustaining costs of $1025 an ounce.
Gold Fields is Gold Road’s largest shareholder, with 10%, followed by BlackRock.
Notwithstanding the sell-off on Tuesday, Gold Road remains one of the best performing stocks on the ASX this year. Shares began 2019 at 65c before running as high as $1.135 this week before the profit-taking set in.
Gold Road shares closed at 99.5c on Friday, up 0.5c for the day.