Paving the yellow brick road
GOLD Road Resources has had a fantastic start to the year, with the first gold pour occurring from the Gruyere Project in the June quarter – just weeks after gold prices in Australia hit a high of $2050/oz.
The pour consisted of $2.2m worth of gold, which Gold Road business development and investor relations manager Duncan Hughes said was a testament to the company doing what it said it would do.
“We’ve built a project, we’ve paid for it and our balance sheet is still strong,” Mr Hughes said.
Mr Hughes said that, with the support of 50:50 joint venture partner Gold Fields, the company’s share price has risen from 5 cents in 2013 to $1.36 today on the back of production.
“There’s no use putting a hole in the ground if you don’t return something to shareholders,” Mr Hughes said.
At the current gold price, Mr Hughes said that after paying to keep the lights on, paying for production and paying taxes and royalties, and paying for exploration, there’s still 25 -35c to the dollar free cash flow.
“That’s free cash flow value to shareholders that can be invested in growth,” he said.
“We’re not going to sit on our hands. We’ve got a great asset in Gruyere and we’re going to optimise it.”
The focus now turns to commissioning of the final components of the process plant, the ball mill, which is anticipated to be completed early in the September 2019 quarter.
Commencement of the operation of the ball mill will mark the start of an anticipated ramp-up period of six to seven months.
Gold Road forecasts that the JV should attain commercial production mid-way through the ramp-up period and anticipates 2019 production at between 75,000 and 100,000oz.
“We’re set up to ramp up and deliver the cash flow we’ve promised,” Mr Hughes said.