The Gold Road Resources Ltd (ASX: GOR) share price has been all over the map this year.
After falling 54% from 24 February through to 16 March during the COVID-driven market panic, shares surged 144% to reach an all-time high of $1.98 by 22 July. Since that high, shares have retraced by 35%, currently trading at $1.26.
Following on a renewable energy upgrade announcement at its Gruyere gold mine this morning, and a slight uptick in the price of gold, the share price is up 1.2% in morning trade.
What does Gold Road Resources do?
Gold Road is an Australian gold producer. The company has a Tier 1 mine and exploration projects in the Yamarna Greenstone Belt in Western Australia’s north-eastern Goldfields.
Gold Road owns 50% of the Western Australia Gruyere gold mine, developed in joint venture with Gold Fields Ltd. According to the company, Gruyere is one of Australia’s biggest and lowest-cost gold mines, expected to produce 300,000 ounces per year over the next 11 plus years.
Gold Road is part of the S&P/ASX 200 Index (ASX: XJO).
What’s driving the Gold Road share price higher?
In an announcement to the ASX this morning, Gold Road revealed a major hybrid renewable power expansion initiative at its jointly held Gruyere Gold Mine.
APA Group (ASX: APA) will install a 4-megawatt (MW) reciprocating gas-fired engine by the middle of next year. APA will also construct, own and operate a 13MWp solar farm and a 4.4MW battery energy storage system. That’s expected to be complete by the end of 2021.
The company estimates the cost between $32–38 million. The benefits include increased power capacity to 64MW; reduced carbon emissions; 5% energy cost savings; and increased throughput to 10 million tonnes per annum.
Commenting on the new initiatives, Gold Road CEO Duncan Gibbs said:
Gold Road is proud to be part of this green energy initiative… The power expansion at Gruyere provides an elegant technical solution that reduces greenhouse gas emissions, decreases costs and enables an increase in plant capacity up to a targeted 10 Mtpa from the current nameplate design of 8.2Mtpa.
This will, not only see increased annual cash flow generation for the business, but it will help drive additional unit cost reductions as Gruyere is further defined as a tier one, low cost and long life gold producer.