Page 10 - gmj147-Apr-Jun-mag-web-neat

NEWS

Road looking

brighter at Gruyere

by Michael Washbourne

Gold Road and Gold
espite suffering second-year production blues at Gruyere,
Fields have guided
DGold Road Resources Ltd will still issue shareholders with a
production of at
fully-franked 1c/share dividend for 2021. least 300,000oz
It was a year to forget for Gold Road as the Gruyere JV fell short from the Gruyere
of hitting the revised production guidance of 250,000-260,000oz JV in 2022
due to major operating issues inside the processing plant,
including a torn mill feed conveyor belt and unscheduled ball mill Maiden resources are expected for Gilbey’s North and Archie
maintenance. Rose this quarter, along with an updated estimate for Plymouth.
The Gruyere JV – jointly owned and operated by Gold Road Gascoyne is also expecting to achieve record production at
and Gold Fields Ltd – was initially targeting output of 260,000- Dalgaranga for the March quarter.
300,000oz for the full calendar reporting year before encountering “Over the last three months, we have been working on a multi-
the performance problems during the June and September faceted strategy to increase mine life and ore feed grades at the
quarters. Dalgaranga gold mine and reposition Gascoyne as an investable
Almost every financial metric was down on the maiden full year mid-tier gold producer with a clear growth strategy,” Gascoyne
of production in 2020, including revenue (down 6.7% to $274.8 managing director Simon Lawson said.
million), EBITDA (down 47% to $120.2 million), NPAT (down 54% “Our goal is to create a debt-free gold producer which is able
to $36.8 million), operating cash flow (down 37% to $89.2 million) to leverage its amazing infrastructure and strong team centred
and free cash flow (down 79% to $22.1 million). around a 3-5 year low-risk, hard-outcome production runway and
Gold Road confirmed in late March it would issue a fully-franked 10-year resource visibility.”
dividend of 0.5c/share for the six months to December 31, having Meanwhile, maligned producer St Barbara Ltd expects to
already paid the same amount for the first six months of 2021. produce just 25,000-30,000oz at an AISC of $3,200-3,600/oz
The company delivered a maiden dividend of 1.5c/share in 2020. from its Simberi gold mine in Papua New Guinea for FY2022
The Gruyere JV expects production to increase to 300,000- after withdrawing guidance in February due to alarming rates of
340,000oz at an attributable AISC of $1,270-1,470/oz in 2022 COVID-19 infections across Tabar Island.
before hitting a steady-state 350,000 ozpa from 2023. St Barbara has struggled to ramp up operations at Simberi after
Despite a challenging 12-month period for his company, Gold six months on care-and-maintenance and the outbreak, which
Road managing director Duncan Gibbs chose to focus on the at its peak forced 270 of the 600-strong workforce into isolation,
positives. did not help matters. A combination of limited operators and
maintainers during this period resulted in low truck availability,
“The year 2021 saw a significant increase in attributable reserves
reducing the amount of material mined and hauled.
(2.23 moz) and resources (4.1 moz) and positive progress from
our exploration efforts at Yamarna,” Gibbs said. Production for the March quarter is now expected to be circa
11,000oz. The face positions in the pits are also significantly
Other highlights noted in the full-year ASX announcement
behind schedule, leading to reduced oxide ore being available in
included Gold Road achieving 90% power generation for its
this final quarter of FY2022.
Yamarna exploration project from the 100%-owned solar and
battery farm. Construction of the 13MW solar farm at Gruyere “Notwithstanding the restoration of national workforce numbers,
was nearing completion at the time of print. the company has determined that ramp-up rates will be slower
than previously anticipated,” St Barbara said in an ASX release.
Also in late March, fellow emerging producer Gascoyne
“The ongoing difficulties with securing expatriate maintenance
Resources Ltd pocketed $19 million from a placement and SPP
specialists and operations management is expected to impact
which will clear the company’s existing debt burden and allow it to
Q4 FY22 and the new guidance range reflects that assessment.”
move into a new phase of growth at the Dalgaranga mine.
Guidance for the company’s Leonora (WA) and Atlantic (Canada)
Following repayment of a $10 million convertible note to entities
operations remains unchanged.
controlled by Deutsche Balaton AG, Gascoyne will deploy funds
into accelerated exploration drilling at the new Gilbey’s North St Barbara, which is in the process of acquiring stalled developer
discovery as well as the Archie Rose and Plymouth prospects. Bardoc Gold Ltd, was also reported to have held potential merger
talks with Ramelius Resources Ltd in March.

Page 10