Gold Road Resources Ltd (ASX:GOR) and joint venture partner Gold Fields Limited (NYSE:GFI) (JSE:GFI) are on schedule and within budget for first production at the Gruyere Gold Project in WA during the June quarter of 2019.
Construction and commissioning activities at the 50:50 JV project, around 200 kilometres east of Laverton, are continuing.
First ore was mined earlier this month as scheduled.
A significant amount of ore is expected to be stockpiled in advance of first gold production as the JV takes steps to de-risk the project.
Primary crusher to coarse ore stockpile circuit.
At January 18 overall construction of the Gruyere process plant and infrastructure had reached 91% completion.
Primary crusher nears completion
Gold Road said construction in the primary crusher area was substantially complete and ore commissioning of the primary crusher to coarse ore stockpile circuit was in progress.
Remaining process plant construction works are concentrated in the milling, CIL and elution areas.
This work includes piping, electrical and instrumentation installations and progressive commissioning of systems and equipment through these areas.
Conveyor to the pebble crusher.
Within cost estimates
The company said the Gruyere project remained within forecast total cost estimates.
Project operator Gruyere Mining Company Pty Ltd, a Gold Fields subsidiary, plans to employ a team of about 350 fly-in, fly-out workers with many on an eight-day-on, six-day-off roster.
Gold Road discovered Gruyere in October 2013 and later partnered with Gold Fields to develop the project.
The latter paid $350 million for its stake, $250 million of that upfront and $100 million to fund Gold Road’s share of cash calls during construction, along with up to $51 million of any construction cost overruns.
CV01 transfer station to CV02.
Gold Fields now operates the venture.
Annual production of 300,000 ounces
The partners are hoping for annual production of about 300,000 ounces over a 12-year mine life, for total annual sales revenues of $540 million.
Revenues over the mine life would be $6.48 billion, with both partners taking a $3.24 billion share.
Total initial capital expenditure forecast at $621 million, with Gold Road’s share being $284 million.
Gruyere’s inventory includes ore reserves of 3.7 million ounces with the deposit suitable for simple open pit mining and ore processing.
Ongoing exploration in the Yamarna region has potential to add to 6.5 million ounces of resources and this year Gold Road plans to spend between $17 million and $20 million on exploration.
There are 40,000-50,000 metres of reverse circulation drilling proposed along with diamond drilling while funds will also be allocated to aircore geochemistry across 40-60 square kilometres of unexplored tenure.