viewGold Road Resources Ltd

Gold Road Resources completes final cost estimate for the Gruyere Gold Project

The company expects first gold to be produced during the June quarter of 2019.

construction of process plant
Construction of infrastructure for the SAG and ball mills at Gruyere

Gold Road Resources Ltd (ASX:GOR) has received the independent third party review of the definitive estimate for its Gruyere Gold Project, representing an estimate of costs to the end of project commissioning.

The review included the final forecast capital (FFC) cost estimate, which was revised to $621 million.

All long-lead items for the Gruyere process plant, including SAG and ball mills, have been transported to site from Perth and are awaiting installation by the EPC contractor Amec Foster Wheeler Civmec Joint Venture (ACJV).

READ: Gold Road Resources confirms gold mineralisation with further high-grade intersections at Yamarna and Gruyere

The revised FFC was increased by 10% from the $532 million capital cost estimate issued in June 2017, including $30 million in agreed scope changes and force majeure costs.

Gold Road anticipates funding a total share of the FFC of $284 million, representing an 8% increase on budget.

This is expected to be funded from Gold Road’s existing cash and working capital facilities.

The remainder of the increased capital cost will be funded by Gold Fields Ltd (JSE:GFI) under the terms of the joint venture, which was negotiated as part of Gold Fields’ acquisition of a 50% interest in the project in 2016.

Development activities progressing on schedule

Overall project engineering and construction is 94% and 61% complete, respectively, and process plant and associated infrastructure 39% complete.

The construction workforce comprises 440 workers and this is expected to peak at 600 during the current quarter.

Construction of the 198-kilometre Yamarna Gas Pipeline was completed by Nacap Australia Pty Ltd on behalf of APA Group ahead of schedule in June.

The pipeline has been connected to the 45-megawatt Gruyere power station, which was also completed this quarter.

READ: Gold Road Resources targeting multi million ounce gold deposits adjacent to Gruyere

MACA Ltd completed the main bulk earthworks in June and is now focusing on a second package of work, mostly associated with the lining of the tailings storage facilities.

Mining services contractor Downer EDI expects to complete construction of its mining and workshop facilities in the September quarter.

The bulk of the Downer workforce is scheduled to mobilise to site in the December quarter in time to start pre-strip activities on the Gruyere open pit in early 2019.

Quick facts: Gold Road Resources Ltd

Price: 1.585 AUD

Market: ASX
Market Cap: $1.39 billion

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