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Addressing shareholders at the company’s annual general meeting yesterday, Mr Gibbs said ore commissioning at the $621 million Gruyere project, 200km east of Laverton, had begun.
The imminent production comes 51/2 years since the Gruyere deposit was discovered and after three million man-hours of work to build the mine.
The cost of Gruyere, originally estimated at $507 million, blew out twice owing to weather-related delays and scope changes by Gold Road and its South African joint venture partner and project operator Gold Fields.
The open pit operation, which comprises an 8.2Mtpa processing plant, is expected to produce up to 120,000 ounces this year and about 300,000oz a year after that over an initial 12-year mine life.
Mr Gibbs said he expected it would take up to seven months for the plant to reach nameplate capacity, with commercial production expected in the middle of the ramp-up. The mine, which has almost 4Moz in reserve, is expected to operate at all-in sustaining costs of about $1000/oz.
Gold Road is expected to spend about $20 million this year targeting new 1Moz-plus discoveries over its 6000sqkm footprint across the Yamarna greenstone belt as well as drilling out the resource at Gruyere.
Mr Gibbs noted Gruyere had a further 2Moz of inferred resource below the current life-of-mine open pit design, which could extend mine life or boost annual production.
The company has more than 150 greenfields exploration targets with drilling focused on the southern end of its tenement.
After repaying $65 million in project debt, Mr Gibbs said about 20-25 per cent of its revenue from Gruyere could be reinvested in the company for organic growth or returned to shareholders in the form of dividends.
“Ultimately it’s a decision as to what is the best wealth generation option,” he said.
Mr Gibbs said Gold Road, which yesterday had a market capitalisation of about $875 million, was “not far away” from joining the S&P/ASX200 index.