Join our daily newsletter At The Bell to receive exclusive market insights
- Gold Road Resources (GOR) has released its June quarterly report, showing it is on track to hit its CY20 guidance of up to 285,000 ounces
- The gold producer had a record quarter in terms of production, with more than 71,000 ounces of gold produced
- Each ounce costs $1233 to produce, while it was sold for an average price of $2498 per ounce, with more than 28,000 ounces sold this quarter
- Those sales generated $71.8 million for the company, who ended the quarter with more than $109 million in the bank
- Gold Road also paid off around $55 million in debt over the June quarter, which, coupled with recent payments, means the company is now debt-free
- Shares in the company are trading slightly down, for $1.93 per share
Gold Road Resources (GOR) has released its June quarterly report, showing it’s on track to hit its CY20 guidance of producing up to 285,000 ounces of gold, after a strong quarter.
The mid-tier gold producer had a record June quarter in terms of production, with 71,865 ounces of gold produced, it’s the biggest total yet.
Each ounce of gold had an all-in sustaining cost (AISC) of $1,233 per attributable ounce. It was sold for an average price of $2,498 per ounce.
Gold Road said it sold 28,700 ounces of gold at that price during the quarter, walking away with $71.8 million in profit.
Cash at hand
At the end of the June quarter, the company had a total of $109.1 million in the bank.
The company also repaid $55.4 million off its $100 million lines of credit during the quarter, reducing its drawn debt position to $25 million.
Since the end of the June quarter, the company has repaid the remaining $25 million, on July 21, to leave itself in an enviable debt-free position.
This means its cash in the bank has reduced from the quarter end figure of $109.1 million, but it still has around $85 million to play with.
Cost of gold
Today’s report shows that the cost of producing gold is estimated to increase slightly this year.
The AISC for 2020 has been readjusted, to fall between $1150 to $1250 per ounce, slightly up on the previous guidance of $1100 to $1200 per ounce.
The company said the increased cost was due to “higher royalty payments, increased maintenance costs, tailings dam expenditure and some COVID-19 related expenditure”.
Around 2.1 million tonnes of ore was mined during the June quarter, at an average grade of 1.06 grams per tonne of gold for 72,362 contained ounces.
All of the ore comes from the Gruyere Gold Mine, which is a 50/50 joint venture with Gruyere Mining Company, a member of the Gold Fields Group.
Located in WA’s goldfield region, the Gruyere mine recently celebrated its first year of production.
While this quarter saw 2.2 million tones of ore processed.
Looking ahead
Along with the financial update, Gold Road also provided an update on its explorations works.
The focus was on the Yamarna Terrain, located east of Laverton in WA, where 23,249 metres of air core, 6775 metres of reverse circulation (RC), and 1968 metres of diamond drilling was completed.
Results from these drillings were also received this quarter, with several anomalies identified requiring follow-up work. Drilling is scheduled to run for the rest of the year, assessing high-ranked targets first and then the best anomalies
Along with the drilling at Yamarna, Gold Road’s also finished a 6,505-metre aircore programme along the Dorothy Hills Shear Zone near its current Gruyere mining lease.
Assessment results from the program are due in the September quarter, and depending on the results, follow-up drilling will begin sometime this year.
Finally, Gold Road’s met earn-in requirements to secure a 75 per cent interest in the Lake Grace project — a joint venture with Cygnus Gold.
The company said drilling at Lake Grace was stopped temporarily due to COVID-19, but resumed in June this quarter, and will wrap up in the September quarter.
Following today’s report, Gold Road’s share price is slightly in the red, down 0.77 per cent, selling for $1.93 per share at 11.27 am AEST.
