Gold Road Resources all-in sustaining cost has risen to $1659 per ounce in the June quarter after facing processing plant issues at the Gruyere joint venture in Western Australia.
Gruyere is operated under a joint venture between Gold Road and Gold Fields.
In June, Gruyere’s processing plant faced a torn mill feed conveyor belt, causing temporary repairs and lower processing rates.
This caused the milling circuit to be shut down while personnel and materials for the belt replacement were sourced.
After replacing the conveyor belt, Gruyere’s ball mill failed forcing processing to continue at a lower rate leaving only the semi-autogenous grinding (SAG) in operation.
Gold Road stated that ball mill repairs were completed on June 25 with the processing plant returning to its normal operations over the weekend.
“The root cause of the coupling failure is under engineering investigation, with the objective of preventing potential future failures,” Gold Road stated in June.
This inflated its AISC from $1386 in the March quarter to $1659.
Following the mill shutdown, Gold Road anticipated lower production in the June quarter.
The Gruyere mine produced 53.132 ounces of gold on a 100 per cent basis during the June quarter, compared to 66,213 ounces in the March quarter.
An updated ore reserve for Gruyere is on track for the second half of 2021, as Gold Road celebrates its first two years of gold production at the site.
Since starting operations in 2019, Gruyere has produced 476,648 ounces of gold at an average AISC of $1307 per attributable ounce to Gold Road.
The company sold 28,425 ounces in the June quarter at an average price of $2145 per ounce, which included 10,300 ounces at $1823 per ounce into forward sales contracts.
Two million tonnes of ore was processed at Gruyere during the June quarter at a head grade of 0.92 grams per tonne of gold and a gold recovery of 89.8 per cent for 53,132 ounces of gold produced.
Gold Road is confident it will lift throughput to increase production in 2022 and 2023.
Despite the lower production levels and higher AISC, Gold Road was trading higher following the announcement at $1.30 per share on the ASX.