Gold Road has been one of the earliest reporters of how its key asset – in this case, the 50% of the Gruyere gold mine in WA – performed in the preceding quarter and it didn’t disappoint yesterday with the news that the mine did better than forecast by many analysts in the three months to December and over all of 2022.
The company said yesterday that Gruyere outperformed 2021 significantly, lifting gold output over the year by a massive 25%.
Gold Road owns the WA mine with Gruyere Mining Company, a subsidiary of the Gold Fields group of South Africa.
Gold Road produced its usual one-page data release around two weeks after the quarter’s end – it then follows up with a more detail quarterly report on production and exploration late in the same month.
For the company 2022 saw a significant change though – it acquired DGO and its shareholdings in a few rival miners, led by 14% of De Grey, the owner of the highly prospective Mallina gold prospects (including the rich Hemi project) in the Pilbara region of WA.
Gold Road built that stake to 19.75% which gives it effective control of this rich prospect and its estimated 10.5 million or more ounces of gold.
In several years’ time it’s very likely the performance of the Mallina mine or mines will be a bigger interest to Gold Road than the 50% of Gruyere.
In the meantime, Gruyere had a very strong year in 2022.
Gold Road said on Thursday that annual production from the 50% Gruyere mine was in line with its 2022 full year guidance and higher than the bottom of the range.
In total, Gruyere produced 315,647 ounces of gold in 2022 which was in line with the full year guidance of 300,000 to 340,000 ounces set in January last year.
But it was more than 25% above the 246,529 ounces produced over 2021 when the mine was hit by Covid restrictions and labour shortages.
In the December quarter, the mine produced 74,201 ounces of gold, which is less than the 83,635 ounces produced in the September quarter, but significantly higher than the 67,813 ounces produced in the December, 2021 quarter.
It processed 2.1 million tonnes of ore at a head grade of 1.18 grams per tonne (g/t) gold, for a yield of 92.1% of contained gold recovered during the quarter.
Gold Road said it sold 37,295 ounces of gold at an average price of $2,A476 an ounce in the quarter, and delivered 6,480 ounces at an average of $A1,735 into the last remaining forward sales contracts. That means Gold Road’s share of Gruyere’s production is now unhedged.
The company ended the December quarter with $80.7 million in cash and equivalents following a $26 million investment in De Grey Mining shares in October.
Gold Road shares were down 2.9% to trade at $1.785.
