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Gold Road Resources (GOR) has announced its first-ever dividend after a year of gold production at the Gruyere mine in WA sent profits soaring.
The company released its full-year annual report for the 2020 calendar year today, highlighting an annual profit after tax of $80.8 million. For reference, Gold Road posted a loss of $4.7 million over 2019.
The profit jump was underpinned by the first full year of production from the Gruyere mine in the Yamarna Greenstone Belt in Western Australia. Gold Road owns half of the top-tier mine in a joint venture with Gold Fields.
With Gruyere forecast to produce an average of 300,000 ounces of gold per year for at least 11 years, the project is one of the biggest gold mines in Australia.
Gold Road produced just over 258,000 ounces of gold from the flagship project over 2020, resulting in almost $295 million in revenue for the full year. This translated to $170.6 million in earnings before interest, tax, depreciation and amortisation (EBITDA), underpinning the sturdy annual profits.
On top of this, Gold Road paid off all remaining debt in 2020, with the company officially debt-free as of July 21, 2020.
Now, the billion-dollar gold stock has announced a fully franked 1.5-cent dividend determined for the six months to December 31, 2020. This represents a half-year dividend yield of 1.42 per cent.
Gold Road Managing Director and CEO Duncan Gibbs said the company experienced no material production impacts from the COVID-19 crisis over 2020, paving the way for the "excellent performance" over the year.
"The year 2020 was Gold Road's first full year as a producer. It was a year where we were able to pay down all our borrowings and generate over $105 million in free cash flow," Duncan said.
"Following 18 months of production experience, in February 2021 we announced our three-year outlook at Gruyere that sees the operation lifting from 258,173 ounces in 2020 to a sustainable 350,000 ounces by 2023 (100-per-cent basis). Gruyere is a Tier-1 gold mine and we are only beginning to unlock its potential," he said.
Investors who own shares in Gruyere before March 25, 2021, are eligible to receive the 1.5-cent dividend payment. The payment will be made on April 14.
Gold Road said it ended 2020 in a strong cash position, with cash and short-term deposits at $126.4 million compared to the $101.3 million at the same time in 2019.