Gold Road Resources Limited (ASX: GOR), a gold production and exploration company, has issued a production update in response to significant rainfall affecting operations at the Gruyere gold mine — located in Western Australia’s north-eastern Goldfields.
The Gruyere gold mine is a joint venture (JV) between Gold Road Resources and Gold Fields (JSE: GFI), with each holding a 50 per cent interest.
Gold Fields manages and operates the mine, while Gold Road Resources maintains a significant investment portfolio.
Following substantial and prolonged rainfall in early March, the region experienced further significant and atypical rainfall in the second half of the month.
This led to the closure of access roads to Gruyere, including the Great Central Road — the main supply route to the mine — which has been closed since 5 March 2024 due to extensive flood damage.
As a result of the road closures, mining activities at Gruyere have been reduced since.
Processing of low-grade stockpiles continued for most of the rain-impacted period but was suspended from 28 March 2024, with a scheduled plant shutdown for maintenance brought forward to minimise the impact on annual gold production.
Preliminary gold production for the March quarter totalled approximately 64,300 ounces (100 per cent basis), with minor adjustments possible upon completion of gold doré refining.
Final gold production and all-in-sustaining costs (AISC) for the quarter will be released in Gold Road’s quarterly report in late April.
The AISC is expected to be impacted by lower gold production and mining volumes.
The Gruyere JV has been working with local authorities and communities to repair the Great Central Road, utilising equipment and personnel from Gruyere.
However, repairs in the flooded impassable sections of the road are expected to take some time.
Operations at Gruyere are anticipated to resume progressively during the first week of April.
The extended impact of the rainfall events is expected to result in the 2024 annual guidance for Gruyere being in the lower half of the previous guidance range of between 300,000 and 335,000 ounces (150,000 to 167,500 ounces attributable) and the upper half of attributable AISC of between $1,900 and $2,050 per ounce.
For the March quarter, Gold Road’s gold sales totalled 32,325 ounces at an average sales price of $3,137 per ounce.
Cash and equivalents at the end of the quarter totalled $146.2 million, with no debt drawn.
Gold Road Resources stated that the company remains committed to its exploration and production activities, with a focus on delivering long-term value for its shareholders.
