A different profit story for Ramelius (ASX:RMS) compared to Gold Road Resources (ASX:GOR), but only due to the way the company’s 50% owned Gruyere mine was significantly impacted by the wet weather across the WA goldfields during the first four months of this year.
Revenue for the six months ending June 30 totaled $211.7 million, down 7.6% from $229 million in the same period last year.
The absence of any hedging allowed Gold Road to limit the damage from the production slump by selling metal at prices close to the rising global gold prices, particularly in the final months of the year.
CEO Duncan Gibbs stated in Monday’s report, “The first half of 2024 was challenging, with gold production and exploration efforts affected by regional rain events that led to a seven-week closure of the main access road to Gruyere. Fortunately, Gold Road’s unhedged production benefited from record-high gold prices.”
Gold sales totaled 63,542 ounces (June 2023: 80,115 ounces), with reduced production in March and April due to a series of unprecedented and protracted regional rain events.
EBITDA fell to $94.2 million from $122.6 million for the same period in 2023, with the company’s EBITDA margin dropping to 44% from 54%.
Consolidated net profit after tax for the six months was $43.1 million, down from $55.7 million a year earlier.
The interim dividend was set at half a cent per share, down more than half from 1.2 cents per share a year earlier. Despite this, the company remained committed to its shareholders.
Gold Road confirmed it ended the half-year with cash and short-term deposits of $79.4 million (December 2023: $143.8 million), doré (a type of gold) and bullion valued at $6.1 million, and no debt.
Strategic listed investments were valued at $478.4 million as of June 30 this year (December 31, 2023: $465.0 million), mostly comprising a 20% stake in De Grey Mining, which owns the rich Hemi gold find in the Pilbara and recently secured a $150 million loan from the Federal Government’s Northern Australian Fund.
Gold Road affirmed that its 2024 annual gold production guidance remains at 290,000 to 305,000 ounces (145,000 to 152,500 ounces attributable) following a revision in July 2024.
The company’s 2024 annual AISC guidance remains at $2,050 to $2,200 per attributable ounce.
Gold Road expects gold production to increase as Gruyere output and processing recover from the first-half slump through the six months to December. The company and its partner, Gold Fields of South Africa, have scoping studies underway to assess the possibility of an underground operation at Gruyere.
Additionally, Gold Road plans to enhance exploration of its own interests near Gruyere. "Drilling and studies are delivering encouraging results from Gilmour as part of the Yamarna Mine Readiness project and early-stage results from Gold Road’s exploration programs at Balter, Galloway, Mallina, and Greenvale, with drilling programs set to commence in the second half of 2024."
