The 50:50 JV with Gruyere Mining Company Pty Ltd, part of Gold Fields Limited (NYSE:GFI) (JSE:GFI), is on schedule for the first production in the June quarter and commercial production in the second half of 2019.
A 2019 production target of 100,000-120,000 ounces has been established by the Gruyere JV partners.
Gold Road chairman Tim Netscher said: “It is good to see the Gruyere project develop from conceptual plans through feasibility study to a well-designed large-scale, long-life, low-cost operation that is on the threshold of delivering substantial value for our shareholders.
“We look forward to pouring first gold in the June 2019 quarter.”
Gold Road is pioneering development of Australia’s newest goldfield, the Yamarna Belt, 200 kilometres east of Laverton.
Mining is underway and a substantial stockpile of ore is planned in preparation for initial production in order to facilitate a smooth ramp-up.
The Yamarna tenements with Gold Road 100% tenements in blue and Gold Road-Gold Fields tenements in yellow.
Ramp-up to full nameplate capacity is expected to be completed within six to seven months of first gold.
Once commercial production is declared, all-in sustaining costs for the remainder of 2019 are expected to be between A$1,050 and $1,150, slightly higher than forecast life-of-mine average of $1,025 per ounce.
Prior to commercial production being declared, production costs, net of revenue from any gold sold, will be capitalised.
Capital cost estimate unchanged
Final forecast capital cost estimate for the project remains at $621 million and Gold Road anticipates funding a total share of this cost of $284 million.
At December 31, 2018, the company’s remaining share of capital development costs was approximately $40 million while the remaining share of JV management costs was approximately $10 million.
Gold Road’s board has made several visits to the project site during the construction process.
In late January, board members viewed the impressive, large-scale and well-designed project nearing construction completion.
Gold Road’s Board, from left, Justin Osborne, Sharon Warburton, Duncan Gibbs, Brian Levet and Tim Netscher on site.
Gold Road holds interests in tenements covering around 6,000 square kilometres in the Yamarna region, which is historically underexplored and highly prospective for gold mineralisation.
In November 2016, Gold Road entered a 50:50 joint venture with Gold Fields for the Gruyere JV covering 144 square kilometres.
The Yamarna leases contain a gold mineral resource of 6.6 million ounces, including 5.8 million ounces at the Gruyere deposit and an ore reserve of 3.92 million ounces.
An operational plan for Gruyere indicates that these reserves support average annual production of 300,000 ounces for at least 12 years.