Gold Road Resources and Goldfields have revealed ambitious plans to extend the life of their Gruyere gold mine in WA.
After asking for a trading halt on Tuesday because of what it called a ‘material’ announcement about the reserves at Gruyere, the halt was lifted yesterday when details of the announcement were made public in the company’s September quarter report.
The news about the reserves and the new mining plan confirmed the surprise trading halt was probably a good idea.
No cost was given in the release yesterday of the expansion. The extra area for handling increased ore production and tailings will cost a bit though.
As a result, the Gruyere gold mine will become one of the deepest open cut gold mines in Australia through the design of an open pit comprising two additional mine stage areas.
That will see Gruyere will deepen to an approximate depth of 500 metres below the surface and see the mine’s life extended until 2032 with an annual average gold production of 350,000 ounces a year.
The plan was announced along with the upgraded ore reserves for Gruyere.
As of the end of September, the Gruyere open pit ore reserve totalled 110.4 million tonnes at 1.28 grams a tonne of gold for 4.54 million ounces, up 31% or 1.07 million ounces after the 210,000 ounces produced in 2020-21. Updates reserves for other areas of Gruyere will be released in the march, 2022 quarter.
Gold Road said its attributable Ore Reserve (50% share) has increased by 31% from 1.74 million ounces to 2.27 million ounces of gold (after mining depletion).
According to Gold Road CEO, Duncan Gibbs “This is a material increase in ore reserves that further establishes Gruyere as a Tier 1 gold mine.” The update is the culmination of multiple comprehensive high-quality studies undertaken by the Gruyere joint venture.”
Gold Road said on Wednesday that it and Goldfields have been working since 2019 looking at reserves, at other technical data and working out how to drive the existing open pit deeper.
Two companies conducted metallurgical work and test drilling and confirmed consistent grades within the orebody at depth.
Deepening will be done by the steepening of Gruyere’s overall fresh rock slope angles by four degrees. The average gold price in the calculations is $A1,750 an ounce. The current gold price is around $A2,400
Gold Road and Gold Fields say they will look at implementing two independent dual lane ramping systems to support Gruyere’s deepening, enabling increased operational flexibility.
Options studies have been completed to assess potential expansions of tailings storage capacity to meet the increased mine production.
Gruyere produced 59,371 ounces of gold in the latest quarter, up from 53,132 ounces in the June quarter.
The company said September quarterly production was impacted by low plant utilisation including the unscheduled ball mill maintenance as announced on 29 September 2021 and further updated on 4 October 2021.
“As previously announced, normal production resumed on 30 September 2021 with production guidance provided for the December 2021 quarter of between 71,000 and 81,000 ounces (100% basis) and 2021 calendar year guidance was revised to between 250,000 and 260,000 ounces (100% basis) (previously between 260,000 and 300,000 ounces (100% basis).
“All-in-Sustaining Cost for the 2021 calendar year is now anticipated to be between A$1,450 and A$1,525 per attributable ounce (previously between A$1,325 and A$1,475 per attributable ounce),” the company said.
In the September report the company revealed that it had more than $123 million in cash and no debt ($128 million at June 30).
The shares eased 0.7% to $1.345.
