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Gold Road weathers plant troubles to deliver dividend

gold production

Gold Road Resources has managed a barrage of processing plant issues at the Gruyere gold joint venture in Western Australia to achieve $129.6 million in revenues during the first half of 2021.

The company’s revenue was lower than the $135.1 million it recorded in the six months to June 2020.

However, its earnings before interest, taxes, depreciation, and amortisation (EBITDA) of 46 per cent was a percentile higher than last year at $59.6 million.

Gold Road’s revenue is attributable to 60,525 ounces of gold in the first half of the year.

The company is expecting stronger performance in the second half of the year, having dealt with plant issues in June at the Gruyere gold mine in Western Australia, which is a JV with Gold Fields.

Gruyere’s processing plant suffered a torn mill feed conveyor belt, causing temporary repairs and lower processing rates, resulting milling circuit to be shut down.

The operation’s ball mill then failed following the replacement, forcing processing to continue at a lower rate leaving only the semi-autogenous grinding (SAG) in operation. It returned to normal operations in early July.

Gold Road managing director and chief executive officer Duncan Gibbs said the board has decided to pay a dividend of $0.50 per share in the six months to June 2021.

“Gruyere has now produced 476,648 ounces (100 per cent basis) since first pouring gold on 30 June 2019,” Gibbs said.

“Despite a one-off production interruption in the June quarter, Gruyere continued to deliver a strong half year profit and EBITDA to Gold Road, and the board has determined to pay a dividend for the six-months to 30 June 2021 of $0.50 per share.”

The company’s previously announced three-year outlook will see production at Gruyere lift to 350,000 ounces by 2023 on a 100 per cent basis.

“The already extensive mine life looks set to grow further with our reserve update later this year,” Gibbs said.

“Geotechnical work on this reserve update has shown the potential to steepen fresh rock open pit slopes by up to four degrees which should have a favourable impact on mine life.”

Gold Road’s exploration activity has also revealed underground potential beneath the open pit resource.

The company’s share price at the time of writing was $1.28 per share.

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