LA Private

Gold Road downgrades gold mine production

Shares in Gold Road Resources (ASX:GOR) fell more than 8 per cent at one stage on Thursday after it downgraded 2022-23 production from the 50 per cent owned Gruyere gold mine in WA.

Gold Road owns half the company that operates the mine – the other half is held by Gold Fields of South Africa.

In a statement to the ASX on Thursday, Gold Road said the downgrade followed wet weather and a shortage of blasting material and drills.

While production for the June quarter is expected to be 72,000 to 76,000 ounces (100 per cent a basis) “with the range contingent on recovery from the rain event.”

That’s well down on the 82,604 ounces produced (on a 100 per cent basis) in the March quarter.

Based on anticipated outcomes of the recovery plan, Gold Road said it is now guiding 2023 annual production at between 320,000 and 350,000 ounces (100 per cent basis) (previously 340,000 to 370,000 ounces).

“The lower gold production rate and revisions to total mining movement will impact all- in sustaining cost per ounce guidance for the year. Gold Road will review AISC per ounce guidance with its June 2023 quarterly report.”

The forecast All In Sustaining Cost was $A1,399 an ounce for Gold Road. That forecast will no longer apply.

“Reliability and utilisation of the production drills and availability of blasting resources were below expectations for the quarter. These factors, together with a recent significant rain event, have negatively impacted ore and waste mining at Gruyere.

“The situation has resulted in reduced availability of Run-of-Mine grade ore to the processing plant, with production being supplemented by the processing of low-grade ore stockpiles.”

The partners are looking at grabbing back lost tonnes and ounces in a stepped-up campaign early in the new financial year.

“A recovery plan is currently being developed with Gold Fields and the mining contractor, and will include the mobilisation of new drilling equipment, additional blasting resources, and an additional mining fleet during the September quarter.

“The timing for the mobilisation and commissioning of these resources will impact total mining movement for the year,” Gold Road said on Thursday.