Gold Road Resources Gets Back to Exploration Basics in 2017

THE INSIDE STORY: Gold Road Resources is proving that although time is, by nature, an abstract concept, it is also a valuable commodity and the more you have on your side the better.

Gold Road Resources (ASX: GOR) struck the 50:50 Gruyere Joint Venture (GJV) deal in 2016 with an Australian arm of international gold producer Gold Fields Ltd.

The company completed a Feasibility Study for the development of the 6.2-million-ounce Gruyere gold project in October 2016, just before signing the JV agreement with Gold Fields.

The Feasibility Study confirmed the Gruyere gold project to be one of the longest life, lowest cost, undeveloped gold deposits in the world, supporting average annualised gold production of 270,000 ounces over life-of-mine of 13 years.

On the strength of the Feasibility Study, the Gold Road Board recommended progressing Gruyere to construction, opting to develop through establishing the Gruyere JV with Gold Fields.

The deal is worth, in monetary terms, around $350 million, but just as importantly it has delivered Gold Road the time to spend that money wisely by advancing other projects and prospects it has identified on the Yamarna Greenstone Belt in Western Australia.

“As soon as we discovered Gruyere we decided right there and then to explore it with development in mind leading to construction,” Gold Road executive director – exploration and growth Justin Osborne told The Resources Roadhouse.

“We’re doing that now, it’s just that we have a world-class gold miner building the project for us.

“That allows us to explore far more rapidly and aggressively than we would ever have been able to contemplate had we paid for the construction of the mine ourselves.

“It has basically moved us ahead four years – we would not have been at this point until around 2020-21 until after we had paid off all the bank debt.”

Under the terms of the JV deal, Gold Road received $250 million in December 2016, part of which has been swiftly allocated across its exploration timetable.

The company has allocated $12 to 15 million for exploration across the 100 per cent‐owned North Yamarna tenements.

Over $5 million has been earmarked for exploration across the Gruyere JV  tenements, with Gold Fields contributing an equal amount.

A further $1.5 to 2 million will be spent on exploring the South Yamarna JV tenements held 50:50 with Sumitomo Metal Mining Oceania Pty Limited, with Sumitomo also contributing an equal amount.

Simple mathematics brings total expenditure across North Yamarna, Gruyere JV and South Yamarna JV tenements for 2017 for Gold Road to around $22 million, with the provisional total spend including contribution from both JV partners across the Yamarna Belt hitting $30 million.

“A big part of that budget will be focused on bedrock drill testing anomalies and targets we have identified over the past three years outside of the Gruyere deposit,” Osborne said.

“We have spent a lot of time and effort gaining some understanding of the other Camp Scale Targets – particularly at Corkwood in the north and at Wanderrie.

“The big focus now is to get drilling into the bedrock associated with these anomalies, see what is causing them, and hopefully make some more discoveries.”

The upcoming work is off the back of a strong exploration performance in 2016 across the company’s tenement package, which included an update to the Ore Reserve for the Gruyere Gold Project to 91.6 million tonnes at 1.2 grams per tonne gold for 3.52 million ounces of contained gold, including 14.9 million tonnes at 1.09 grams per tonne gold for 0.52 million ounces in the Proved category.

Other news from the Gruyere JV included exciting high‐grade results from 4 metre composite aircore samples received from YAM14 in the South Dorothy Hills Camp Scale Target (Camp #1) within the Gruyere JV tenements.

The results included

16DHAC0665 
8m at 6.8g/t gold from 32m, including 4m at 12.11g/t gold from 32m; and

16DHAC0666
17m at 2.61g/t gold from 96m.

The company considers these results indicate the potential to double the strike length of the deposit with further drilling.

RC drilling conducted on the North Yamarna tenements returned assay results from the Ibanez prospect within the Pacific Dunes‐Corkwood Camp Scale Target (Camp #3) and the Santana and Satriani prospects within the Sun River‐Wanderrie Camp Scale Target (Camp #4).

The drilling confirmed the continuation of high‐grade bed rock mineralisation at:

Ibanez
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19m at 2.52g/t gold from 94m, including 3m at 13.41g/t gold; and

Santana
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8m at 3.12g/t gold from 234m, including 2m at 8.24g/t gold.

Assay results from RC and aircore drilling programmes completed on the Riviera‐ Smokebush Camp Scale Target (Camp #5) within the South Yamarna JV tenements were highlighted by high‐grade RC results at the Smokebush prospect, which returned a best intersection of:

16SYRC0087
19m at 3.17g/t gold from 55m, including 2m a 8.76g/t gold.

Exploration-wise 2017 is shaping up as a big year for Gold Road, as the company gets back into doing what it does best – exploring for new gold discoveries.

The year’s exploration activities are scheduled to kick off in March with the programmes planned for the year doubling the company’s efforts for 2016.

On the North Yamarna tenements infill aircore drill testing will take place within the South Dorothy Hills Regional (Camp #1), testing the southern extension of the Dorothy Hills Shear Zone at Monteith. 

Full field aircore programmes will be conducted over the newly named Hopwood Camp Scale Target testing a 25 kilometre strike length of the Dorothy Hill Shear Zone south of Monteith and at Corkwood South, the southern half of the Pacific Dunes‐Corkwood Camp Scale target.

At Sun River‐Wanderrie (Camp #4) a follow-up programme of aircore drilling will focus on the Gilmour and Morello Targets, while the recent high-grade bedrock mineralisation encountered at the Santana prospect will be tested by follow‐up RC drilling.

Pacific Dunes‐Corkwood (Camp #3) will see more infill and extensional RC and diamond drilling this time following the high-grade bedrock mineralisation achieved at the Ibanez prospect. Infill aircore programmes have been planned to test and progress the Stratocaster and Mesaboogie targets.

Gruyere won’t miss out with deep diamond drill testing the underground potential of the down‐plunge extension.

Priority RC testing will be carried out on the northern mineralisation extension to YAM14.

Riviera‐Smokebush (Camp #5), within the South Yamarna JV tenements will undergo RC follow‐up of an aircore anomalism at the Riviera Target as will the Kingston North and Yaffler South Targets at Breelya‐Toppin Hill (Camp #2), while first pass aircore drilling will test the Mt Carlon Target.

“We’ve got quite a bit of work to follow up at South Yamarna and some first-class drilling targets to focus on throughout the year,” Gold Road Exploration Manager, Clayton Davy’s explained.

“The Gruyere JV will be a mixture of deep testing activity at Gruyere to identify that we really do have an underground position there.

“We need to confirm that and we want to get that done before the mine infrastructure gets put in place.

“Other work will focus on the potential satellite feed deposits, such as YAM14 and bringing them to the stage where we can do some more Resource work and get Reserves generated on them and look for extensions at depth – potential underground positions.”

Gold Road Resources (ASX: GOR)
…The Short Story

HEAD OFFICE
Level 2
26 Colin Street
West Perth WA 6005

Ph: +61 8 9200 1600

Email: perth@goldroad.com.au

Website: www.goldroad.com.au

DIRECTORS
Tim Netscher, Ian Murray, Justin Osborne, Martin Pyle, Sharon Warburton