The Gold Road Resources Ltd (ASX: GOR) share price dipped slightly this morning before bouncing back after the mid‐tier gold producer and exploration company released its 2020 production guidance and resource upgrade to the market. Gold Road shares are currently up 0.31% to $1.60 at the time of writing.
Resource upgrade details
Gold Road initially reported a 1.2-million-ounce upgrade to measured and indicated resources for the Gruyere Joint Venture (Gruyere JV) within its annual mineral resource and ore reserve statement (as at December 2019).
The Gruyere JV is a 50:50 joint venture with Gruyere Mining Company Pty Ltd, a member of the Gold Fields Ltd Group (Gold Fields), which manages and operates the Gruyere gold mine.
Gold Road reported that drilling completed in 2019 resulted in a 1.23 million-ounce (29%) increase in measured and indicated (M&I) resources to 6.1 million ounces at the Gruyere JV through the upgrade of inferred resources to indicated resources.
Gruyere JV's total mineral resource came in at 154 million tonnes at 1.34 g/t Au for 6.6 million ounces after mining depletion of 0.19 million ounces using an $1,850 per ounce gold price assumption.
Gold Road notes that the resource upgrade now provides the basis for an updated evaluation of open pit reserves during 2020. Gold Road attributable mineral resources increased from 3.3 million ounces to 3.6 million ounces (post depletion), largely through the addition of 100% owned Resources in 2019.
Gold Road's 2020 guidance and exploration budget
Gold Road stated that Gruyere 2020 gold production for the calendar year is forecast between 250,000–285,000 ounces (125,000–142,500 ounces attributable), while Gold Road all in sustaining costs for Gruyere are guided between $1,100–$1,200 per ounce. Construction of a tailings dam raise will commence in the March 2020 quarter and be concluded in late 2020.
The miner reports that its ramp‐up to full production will continue with a number of scheduled plant shutdowns in the March 2020 quarter allowing the operations team to improve plant availability, operating efficiencies, and conduct wear and maintenance program.
Gold Road noted that it has commenced mining fresh rock ore. The proportion of fresh ore mined is expected to steadily increase to predominately fresh rock ore late in the June 2020 quarter. A second mining fleet is scheduled to commence in mid‐2020, allowing for continued mining of ore from the Stage 1 open pit while continuing to cut‐back on the Stage 2 open pit.
Gold Road's 2020 exploration budget was increased by $3 million to $26 million to support increased aircore and diamond drilling, which is designed to provide initial testing of exploration target programs.
