Gold Road Resources Limited has completed the Pre‐Feasibility Study (PFS) for the development of its 5.62 million ounce5 (Moz) Gruyere Project, located 200 kilometres east of Laverton in Western Australia.
The completion of the PFS included detailed economic analysis and further technical work building on the findings of the first stage Options Study which determined that the best go‐forward case was a large‐scale open‐pit mine utilising a conventional 7.5 Mtpa SAG/Ball Mill Circuit gravity/carbon‐in‐leach processing facility, powered by a pipeline‐supplied, gas‐fired power generation plant.
The full PFS confirms the Project as one of Australia’s best undeveloped gold deposits and indicates a technically sound and financially viable project generating over A$1 billion in free cash flow (pre‐tax) over an initial 12‐year project life.
Gold Road’s Executive Chairman, Ian Murray said: “Following the detailed work undertaken last year in the Options Study that determined the best development case for the Gruyere Project, the PFS has now confirmed the Project’s robust economics and technical simplicity.”
“While the PFS suggests a substantial 12‐year project life, the demonstrated exploration potential of Gruyere and the surrounding Yamarna region means there is significant potential to extend the life beyond that initial term,” he said.
The total forecast capital cost is estimated to be A$455M, which includes a Project contingency of A$35M. The PFS produced a Whittle‐optimised open pit shell and Ore Reserve modelled at A$1,400/oz. All financial analysis was undertaken using a A$1,500/oz gold price, representing the five‐year historic average.
As a key outcome of the positive completion of the PFS, the Company has declared a Maiden Ore Reserve for Gruyere of 3.17 Moz, which supports an average annual gold production of 265,000 ounces over the LOM.
Production at this rate would elevate Gold Road into the ranks of Australia’s mid‐tier gold producers.
Based on the positive PFS outcome, the Gold Road Board has approved the immediate progression to a Feasibility Study on the Project to further define and support the case for project funding and development.
“We are now aiming to complete the Feasibility Study on Gruyere by the end of 2016 which will allow Gold Road to make an investment decision in early 2017. Opportunities to optimise and enhance the financial performance of the Project will be thoroughly assessed during this feasibility stage.”
The PFS was compiled with the assistance of a number of independent, reputable Western Australian‐based engineering companies as well as other industry experts and Gold Road personnel.