Australian Gold Miner Gold Road Resources Limited (ASX:GOR) has successfully completed stage 1 of its two-part Pre-Feasibility Study of the Gruyere Gold Project. The announcement marks a milestone for this 5.5m ounce Gold project in Western Australia.
Gold Road Resources as well as the entire gold mining industry is currently under pressure due to the lowest gold prices in nearly 6 years. However, the decline of the Australian Dollar (AUD) against the US Dollar (USD) partially offsets the sharp fall in gold prices. In fact the strength of the USD is one of the main reasons that gold is now trading below US$1100 per ounce.
GOR is trading at $0.345 this morning at 11:30 am (AEST), up 3% from Friday’s close. Whilst the decline in the fast few weeks was significant GOR remains on schedule to complete its Pre-Feasibility Study in the first quarter of 2016. The share price is still well above its low from December 2014.
All projections and estimates in GOR’s study were based on a gold price of A$1,400/oz, which is conservative given the fact that the spot gold price in Australia hovered around the A$1,500 mark in tthe past few weeks. This indicates that the company as well as most analysts expect further declines over the upcoming 12 months.
The highlights of the study included an estimated throughput of 7.5m tonnes per annum giving Gruyere an initial life of mine (LOM) of 10 to 15 years. The average gold production of 250,000 ounces per annum totals 2.5m to 3.7m ounces total gold for the entire lifetime.
Ian Murray, Gold Road’s Executive Chairman is pleased with the study and highlights the “the detailed work that our team has undertaken”, which lead to the estimated production rate of 7.5m tonnes per annum. He continues saying that “since completion of the Scoping Study the Gruyere Gold Mineral Resource has grown by 44%. (…) With the upgrade of the Gruyere Resource we are pleased to report that the Gruyere Project has the critical mass to support the larger scale 7.5Mtpa operation over a longer mine life.”
The market is pleased with the outcome as well as GOR trades 3% higher this morning. The stock has gained 15% in the past 12 months and is up 40% YTD. Wise-owl will continue to provide updates on GOR exclusively for our paid members.
Author: Simon Herrmann
Aug 03, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.