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Gold Road Resources Focus now firmly on WA expansion

THE CONFERENCE CALLER: Having helped establish a Tier 1 gold operation in its home state of Western Australia, Gold Road Resources (ASX: GOR) is seeking more ounces through increased production and the discovery of enough new ore bodies to establish another mine. By Mark Fraser

Following the first pour at the company’s 50 per cent-owned Gruyere project in June last year, Gold Road and its Joint Venture partner (and operator) Gold Fields (JSE and NYSE: GFI) produced 230,590 gold ounces during the mine’s first 12 months at an all-in sustainable cost of $1,155 per ounce.

The 2020 annual guidance is currently 250-270,000 ounces at an AISC of $1,250-1,350 per ounce.

Located in WA’s north east Goldfields on the under-explored Yamarna Greenstone Belt, Gruyere has a 12-year life based essentially on what was a six million ounces discovery by Gold Road back in 2013.

As it stands the deposit has a total mineral resource of 154 million tonnes grading 1.34 grams per tonne gold for 6.62 million ounces, as well as an ore reserve of 93 million tonnes at 1.24g/t gold for 3.72 million ounces.

Gold Road is now confident it can find more ore to feed the Gruyere mill, and has subsequently put aside $26 million to explore the 4,500 square kilometres it holds in the Yamarna belt.

The company is also looking at increasing plant throughput and deepening the current pit.

Speaking during the Diggers & Dealers Mining Forum in Kalgoorlie-Boulder, Gold Road managing director and chief executive Duncan Gibbs suggested a rise in output could involve expanding plant operating times, mining at a higher rate and reducing unit operating costs.

“We believe if we put those elements together, along with some steepening of the pit walls, we can drive the pit to a deeper level than the one which came out of the bankable feasibility study,” Gibbs said.

“Conceptually we think we can get the pit down to somewhere like 400-450 metres below surface – that becomes one of the deepest pits in Western Australia.

“Of course, to get that right we need to understand the geotechnical parameters as well; we’ve done some geotechnical and metallurgical drilling under the pit, so we have that information.

“We really want to get an understanding of the fresh rock exposure in the mine before we start to lock in the commitment and the understanding of what the life of mine reserve looks like for Gruyere.”

In terms of exploration, Gibbs said around 75 per cent of the $26 million put aside for the Yamarna belt would be channelled towards the 800sqkm southern project area, where the high priority targets were Kingston (with its diamond hole of 1m at 10.4 g/t), Hirono, Savoie and Beefwood as well as Gilmour and Gilmour South.

The other project area is at Yandina in WA’s south west Yilgarn, which sits within an under-explored greenstone belt near the farming community of Lake Grace.

Here, Gold Road and Cygnus Gold control 3,400sqkm of land covering two joint venture areas, with the former planning to take over the role of operator.

Some 20,000m of aircore drilling targeting crustal scale shear zones have already been completed, while a field program consisting of another 8,500m of aircore, 750m of RC and 500m of diamond drilling is now underway.

“What we see is the opportunity here for a large scale, regional geochem corridor stretch over about 15 km, and the opportunity really is to follow up the aircore results that we have,” Gibbs said.

“And hopefully we can make a discovery in this part of the Australia.”

Gold Road became debt free in July, while it also has $65 million of franking credits as a consequence of its 50 per cent sale of Gruyere to Gold Fields.

Given this, Gibbs added, the resources house was now, “in a position to pay fully franked dividends.”

 

 

Email: perth@goldroad.com.au

 

Web: www.goldroad.com.au

 

THE DAILY ROADHOUSE

 

Cassini Resources and OZ Minerals Deliver PFS for Low-Carbon, Long-Life, Low-Cost Mine

THE BOURSE WHISPERER: OZ Minerals (ASX: OZL) and Cassini Resources (ASX: CZI) finally delivered the long-awaited results of the West Musgrave, Nebo-Babel Pre-Feasibility Study (PFS).

Gold Road Releases 2020 Gruyere Guidance and Resource Upgrade

THE DRILL SERGEANT: Gold Road Resources (ASX: GOR) reported 2020 production guidance and a Resource upgrade for the Gruyere Joint Venture.

Lithium Australia Subsidiary Awarded Federal Battery Development Grant

THE BOURSE WHISPERER: Lithium Australia (ASX: LIT) 100 per cent-owned subsidiary VSPC is to participate in a federal government Co-operative Research Centres Projects (‘CRC-P’) program.

 

Gold Road Releases 2020 Gruyere Guidance and Resource Upgrade

THE DRILL SERGEANT: Gold Road Resources (ASX: GOR) reported 2020 production guidance and a Resource upgrade for the Gruyere Joint Venture.

The Gruyere JV is a 50:50 deal with Gruyere Mining Company Pty Ltd, a member of the Gold Fields Ltd Group, which manages and operates the Gruyere gold mine.

Drilling completed by the JV in 2019 resulted in a 1.23 million ounce (29%) increase in Measured and Indicated Resources to 6.1 million ounces at the Gruyere JV through the upgrade of Inferred Resources to Indicated Resources.

The Gruyere JV Total Mineral Resource now stands at 154 million tonnes at 1.34 grams per tonne gold for 6.6 million ounces after mining depletion of 0.19 million ounces using an $1,850 per ounce gold price assumption.

The Resource upgrade is expected to provide the basis for an updated evaluation of open pit Reserves during 2020.

Gold Road’s attributable Mineral Resources increased from 3.3 million ounces to 3.6 million ounces (post depletion) largely through the addition of 100 per cent-owned Resources in 2019 from its satellite projects.

2020 annual guidance anticipates Gruyere gold production of 250,000 to 285,000 ounces (125,000 to 142,500 ounces GOR).

Gold Road’s all‐in‐sustaining costs (AISC) should fall between $1,100 to $1,200 per attributable ounce.

The company’s upcoming exploration budget sits at an impressive $26 million.

“The purpose of our 2019 drilling program beneath the Gruyere pit shell was to convert Inferred Resources into Indicated Resources,” Gold Road Resources managing director and CEO Duncan Gibbs said in the company’s announcement to the Australian Securities Exchange.

“The increase in Measured and Indicated Resources by 1.2 million ounces is meaningful and very encouraging.

“The Gruyere JV focus will now move to reviewing Reserves with the goal of growing mine life whilst maintaining a low AISC.

“2020 production and cost guidance affirms Gruyere’s position as a Tier 1 operation with significant cash generation.

“Our exploration team is well supported as we look to make meaningful discoveries in a surprisingly underexplored part of Western Australia.”

 

Email: perth@goldroad.com.au

Web: www.goldroad.com.au

 

THE DAILY ROADHOUSE

 

Gold Road Estimates New Wholly-Owned Yamarna Gold Resources

THE DRILL SERGEANT: Gold Road Resources (ASX: GOR) reported the first 100 per cent company‐owned resource addition since it entered the Gruyere Joint Venture.

Encounter Resources Identifies New Copper-Gold Drill Targets at Lamil

THE DRILL SERGEANT: Encounter Resources (ASX: ENR) recently completed IP and AEM surveys at the company’s 100 per cent-owned Lamil copper-gold project in the Paterson Province of Western Australia.

 

Gold Road Estimates New Wholly-Owned Yamarna Gold Resources

THE DRILL SERGEANT: Gold Road Resources (ASX: GOR) reported the first 100 per cent company‐owned resource addition since it entered the Gruyere Joint Venture.

The Mineral Resource of 3.5 million tonnes at 2.62 grams per tonne gold for 297,600 ounces was estimated at the Gilmour and Renegade deposits, both 100 per cent-owned by Gold Road.

The Gilmour Maiden Mineral Resource totals 2.6 million tonnes at 3.09g/t gold for 258,400 ounces, with 0.8 million tonnes at 5.2g/t gold for 120,000 ounces, or 46 per cent of contained ounces, classified as an Indicated Resource.

This makes Gilmour the third largest and second highest grade deposit so far discovered on the Yamarna Belt.

The Gilmour Maiden Mineral Resource is located 55 kilometres, by road, south of the Gruyere Mine, which means the open pit and underground Mineral Resources could be developed by Gold Road and processed at Gruyere via toll treatment provisions under the Gruyere JV agreement.

The Gruyere development option provides a pathway to monetise the discovery and realise value from Gold Road’s exploration program.

The Renegade deposit, previously reported as Khan North, has been re‐estimated as an Inferred Mineral Resource of 0.9 million tonnes at 1.3g/t gold for 39,200 ounces.

The new resource estimate follows detailed geological interpretation and optimisation for open pit extraction, applying appropriate modifying factors and a gold price assumption of $1,850 per ounce.

Renegade is located just 35 kilometres by road from the Gruyere Mill, and is adjacent to the Gruyere Main Access Road.

Like Gilmour, Renegade could also potentially add value to Gold Road through toll treatment in accordance with the terms of the Gruyere JV agreement.

“The Maiden Mineral Resource for Gilmour represents the first gold deposit identified at Yamarna outside of the original discoveries on the Golden Highway, and our Gruyere discovery which is now being mined in Joint Venture with Gold Fields,” Gold Road executive director ‐ exploration & growth Justin Osborne said in the company’s announcement to the Australian Securities Exchange.

“The significance in being the third largest, and second highest grade deposit so far discovered at Yamarna is considerable.

“The relatively high‐grade demonstrates a diverse endowment consistent with our belief in the Belt having potential to host multiple deposits varying in style, size and grade as seen in other major Greenstone Belts in Western Australia ‐ the main difference at Yamarna is it remains significantly underexplored.

“We are now applying the improved understanding from our Gilmour exploration programme to assist our ongoing targeting of greater than one million ounce deposits on the considerable Yamarna tenement holding.”

 

Email: perth@goldroad.com.au

Web: www.goldroad.com.au

 

THE DAILY ROADHOUSE

 

 

Calidus Resources Confirms Robustness of Warrawoona Pit

THE DRILL SERGEANT: Calidus Resources (ASX: CAI) announced further results from within the planned open pit at the company’s Warrawoona gold project in the Pilbara region of Western Australia.

Gold Road Resources Completes Healthy Gruyere Quarter

THE BOURSE WHISPERER: Gold Road Resources (ASX: GOR) released its activity report for the quarter ending 30 September 2019.

Perseus Mining Shuffles Seats at Boardroom Table

THE DRILL SERGEANT: Perseus Mining (ASX: PRU) made its intentions known that it will be proposing the appointment of David Ransom to the role of non-executive director at the company’s upcoming Annual General Meeting.

 

Gold Road Resources Completes Healthy Gruyere Quarter

THE BOURSE WHISPERER: Gold Road Resources (ASX: GOR) released its activity report for the quarter ending 30 September 2019.

Unsurprisingly the report focused on the company’s Gold Fields Joint Venture Gruyere gold mine, which is a global Tier 1 gold mine with a long operating life and forecast high margins, located east of Laverton, in Western Australia.

“Gruyere delivered another quarter of milestones as project development was completed within budget, commissioning of all processing circuits was completed, and commercial levels of production were attained at the end of the quarter and slightly earlier than guidance,” Gold Road Resources said.

The report declared the Gruyere ramp‐up to be progressing well, hitting commercial production at the end of September 2019, slightly ahead of guidance, producing 29,107 ounces of gold during the quarter.

This allowed the 2019 annual guidance range to reaffirmed at the upper end of 75,000 to 100,000 ounces and for All-In-Sustaining-Costs (AISC) to also remain unchanged for December 2019 quarter of between $1,050 to $1,150 per ounce.

As at 30 September 2019 Gold Road had cash of $65.3 million and bullion of $5.8 million on hand, net debt of $9.3 million, with $80.4 million of its $150 million facility drawn.

Gold Road has hedged 125,300 ounces at an average price of $1,837 per ounce for delivery between 1 October 2019 and 30 September 2022.

Gold Road sold 12,461 ounces of its share of the gold from Gruyere at an average price of $2,052 per ounce.

Further work has continued on the exploration front diamond drilling near‐completion at Gruyere to enable conversion of a large portion of the current Inferred Resource to the Indicated Resource category in support of future optimisation of the mine plan and mine infrastructure.

Recent drilling results include:

36.2 metres at 2.44 grams per tonne gold from 282.8m;
44.9m at 1.8g/t gold from 270.1m; and
73.4m at 1.8g/t gold from 288.6m.

At Gold Road’s 100 per cent-owned Yaffler South prospect, bedrock RC drilling intersected coherent and consistent mineralisation, yielding results of:

11m at 5.94g/t gold from 74m;
12m at 3.4g/t gold from 116m; and
12m at 2.71g/t gold from 59m.

This drilling program continued during the quarter and assays are expected in the December 2019 quarter.

 

Email: perth@goldroad.com.au

Web: www.goldroad.com.au

 

THE DAILY ROADHOUSE

Golden Rim Resources Accelerates Kouri Exploration

THE DRILL SERGEANT: Golden Rim Resources (ASX: GMR) is making exploration campaign progress at the company’s Kouri gold project in Burkina Faso.

Cygnus Gold and Gold Road JV Operating Smoothly

THE DRILL SERGEANT: Cygnus Gold (ASX: CY5) has been kept busy of late at the company’s Joint Ventures with Gold Road Projects, a wholly-owned subsidiary of gold producer Gold Road Resources (ASX: GOR).

Comet Resources Identifies Priority Graphite Targets

THE DRILL SERGEANT: Comet Resources (ASX: CRL) has had an aerial electromagnetic survey (EM) carried out over the company’s Springdale graphite project in southern West Australia.

AMEC’s Overtures Result in WA Government Lithium Sector Review

IN THE LOBBY: The Western Australian lithium sector received a recent boost in the form of a supportive announcement from the State government.

Cygnus Gold and Gold Road JV Operating Smoothly

THE DRILL SERGEANT: Cygnus Gold (ASX: CY5) has been kept busy of late at the company’s Joint Ventures with Gold Road Projects, a wholly-owned subsidiary of gold producer Gold Road Resources (ASX: GOR).

The Cygnus Gold – Gold Road JVs include the Lake Grace JV and the Wadderin and Yandina JVs covering an area of more than 5,000 square kilometres in the Wheatbelt region of Western Australia along the Yandina Shear, a largely unexplored regional structure interpreted to control the location of gold deposits such as Tampia, Griffin’s Find and Lake Magenta.

The current focus on the Lake Grace JV is the Hammerhead prospect, a target identified from regional aircore drilling of a zone of surface gold anomalism coincident with the prospective Yandina Shear Zone.

Recent aircore drilling at the Hammerhead prospect returned additional widespread, anomalous gold including:

LGAC0058
3 metres at 0.35 grams per tonne gold from 52m; and

LGAC0091
6m at 0.28g/t gold from 56m to end of hole.

Cygnus explained these intersections are associated with widespread anomalous gold pathfinder elements such as arsenic, copper, and molybdenum, and are in addition to the results reported in earlier announcements.

Anomalous gold and pathfinder anomalism have now been returned from four of eight broad spaced drill lines through transported cover over nearly 15km strike length of interpreted greenstone rocks at Hammerhead.

Work being carried out at the Wadderin and Yandina JVs is also targeting gold mineralisation associated with the regional Yandina Shear.

Due to the sparse outcrop in these large tenement packages exploration has been driven by detailed geological interpretation of geophysical datasets to map out the geology and structures thought to control gold mineralisation.

In addition to ongoing targeting at Hammerhead, recent exploration activity has included regional targeting on the Wadderin and Yandina JVs, which has identified a number of high priority targets for drill testing.

Cygnus indicated it is now planning a program to extend and infill the AC drill coverage at Hammerhead as well as deeper reverse circulation (RC) drilling under the best results to date.

The AC program will include first pass traverses across the higher priority Wadderin and Yandina targets.

These programs are planned to commence immediately post-harvest in late Q4.

“Even though early stage, the Hammerhead prospect is now a focus area on the Lake Grace JV where drilling programs are planned to commence over the coming months,” Cygnus Gold managing director James Merrillees said in the company’s announcement to the Australian Securities Exchange.

“Other targets on the Wadderin and Yandina JVs fill a pipeline of Joint Venture funded projects to be tested over the coming 6 to 12 months.

“I’d like to thank our partners Gold Road and acknowledge their support as we aim to emulate their success at Yamarna in the Southwest, an equally underexplored area within the prolific Yilgarn Craton.”

Gold Road has now reached the expenditure required to earn 51 per cent of the Lake Grace Earn-in project, and has elected to form a JV to earn an additional 24 per cent interest (75% in total) in the project by spending a further $500,000 within 18 months.

On the Wadderin Earn-in project, Cygnus and Gold Road have agreed to extend the minimum expenditure time required to achieve the $900,000 until December 31 2019 and extend the earn in period to 31 December 2020 where Gold Road is required to spend $1.6 million on exploration expenditure to earn 51 per cent.

All other terms remain unchanged.

The Hyden group of tenements were granted during September and these will be added to the existing Yandina JV.

 

Email: info@cygnusgold.com

Web: www.cygnusgold.com

 

Gold Road Resources Keeps Exploration Drills Spinning

THE DRILL SERGEANT: Gold Road Resources (ASX: GOR) reported on diamond and reverse circulation drilling underway across the company’s exploration tenements in Western Australia.

In the Southern Project Area of the company’s 100 per cent-owned Yamarna project a total of eight diamond and 13 RC drill holes were undertaken to support the estimation of a potential Maiden Mineral Resource at Gilmour.

Gold Road reported the program extended its knowledge of mineralisation both along strike and at depth and defined the detail of the geology adjacent to the Waters Fault.

The mineralisation was predictably intersected confirming initial geological interpretations.

Visible gold has been observed in association with a laminated quartz vein in six of the new eight diamond drill hole.

Best intersections returned included:

19WDDD0046
2.06 metres at 12.4 grams per tonne gold from 357.2m;

19WDRC0239
4m at 4.96g/t gold from 199m;

19WDRC00240
7m at 2.2g/t gold from 146m; and

19WDDD0038A
2.78m at 5.25g/t gold from 401.43m.

At the company’s 50 per cent-owned Gruyere Mine Joint Venture a drilling program was commenced to extend the Indicated Resource below the current Ore Reserve pit design, and delineate the limits of mineralisation at the southern end of the Gruyere Porphyry.

Extending the limits of the Indicated Resource will allow for strategic evaluation and mine optimisation applying improvements to modifying factors such as improved pit‐slope angles, operational cost reductions, and gold price.

Commencing these studies now will position the JV to potentially bring forward additional value in the mine plan.

This information will be used in Ore Reserve updates planned for later this year.

Confirmation of the southern limits of economic mineralisation will enable finalisation of infrastructure locations, such as the ROM Pad or waste dumps.

“Our first drilling for 2019 has given us a greater understanding on the geological controls to economic gold mineralisation on the Gilmour and Morello prospects which we are now applying to make further discoveries along the same trend,” Gold Road Resources executive director ‐ exploration & growth Justin Osborne said in the company’s announcement to the Australian Securities Exchange.

“At Morello we identified several potential shoots to be assessed with further drilling.

“We are embarking on a new drilling program at Gruyere to allow us to further optimise and increase the near-term value to be delivered from the mine as we edge closer to our initial gold pour and subsequent commercial production.”

 

Email: perth@goldroad.com.au

Website: www.goldroad.com.au