The gold sector is a sea of red on Wednesday, but one ASX 200 gold stock is falling more than most.
That gold stock is Gold Road Resources Ltd (ASX: GOR), which is down 8% to $1.80.
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Why are investors selling this ASX 200 gold stock?
Investors have been selling Gold Road shares today following the release of a production update from the 50%-owned Gruyere operation.
According to the release, Gruyere produced approximately 74,653 ounces of gold during the December quarter. This was down sharply from the previous quarter's production of 88,668 ounces, which is particularly disappointing given the sky-high gold price.
Management advised that its production was lower quarter on quarter due to a disappointing mining performance arising mainly from unexpected labour availability issues during December.
This ultimately meant that 2023 annual production from Gruyere totalled approximately 321,978 ounces on a 100% basis. While this meets the lower end of annual guidance of 320,000 – 350,000 ounces, it was on course for a much stronger result prior to December.
In addition, the company wasn't in a position to provide an update on its costs, which appear likely to be higher than expected due to the softer production. Management will provide an update on costs later this month.
Gold Road's gold sales for the three months totalled 37,037 ounces at an average sales price of A$3,040 per ounce.
What else is weighing on its shares?
Also putting pressure on this ASX 200 gold stock is a broad weakness in the sector following a pullback in the gold price.
For example, Northern Star Resources Ltd (ASX: NST) shares are down 3% and Silver Lake Resources Ltd (ASX: SLR) shares are down 4%. This has led to the S&P/ASX All Ordinaries Gold index falling a disappointing 2.1% on Wednesday morning.
