The Gruyere Gold Project was discovered by Gold Road in October 2013 on the South Dorothy Hills Trend, 25 kilometres north-east of the Company’s original Yamarna Belt discovery, Central Bore.
Within 10 months of Gruyere’s discovery, Gold Road had defined a significant high-grade gold deposit and announced a maiden JORC 2012 Mineral Resource of 96.93 million tonnes grading 1.23 grams of gold per tonne for 3.8 million ounces of contained gold.
The Gruyere Mineral Resource has since grown to 144 million tonnes grading 1.3 grams per tonne for 5.9 million ounces of contained gold, making it one of the largest undeveloped gold deposits in Australia.
After completing positive Pre-Feasibility and Feasibility Studies on Gruyere, Gold Road announced in November 2016 it would sell 50% of the Project to leading international gold producer Gold Fields Ltd for A$350 million in cash plus a 1.5% Net Smelter Return royalty on production over 2 million ounces.
The transaction fully funds Gold Road for its 50% share of development capital and de-risks the Project to a significant degree through the introduction of a partner highly experienced in the development and operation of open-pit gold mines that has agreed to cover any cost overrun up to 10% of the total development budget.
Under the Joint Venture Agreement, Gold Fields will manage the development of Gruyere and will also manage the operation of the mine. Gold Road retains responsibility for exploration on the Joint Venture tenements.
Construction of the Project commenced at the beginning of 2017 and since then the project team has achieved a number of significant milestones and is scheduled to deliver first gold pour at the beginning of the 2019 June quarter.
In the 2019 calendar year Gruyere is expected to produce between 170,000 and 230,000 ounces. Once steady state production is achieved the annual production should average 270,000 ounces.
The Project milestones achieved over the past year included:
Construction of mining infrastructure commenced in the March 2018 quarter and mining activities are scheduled to begin in the December 2018 quarter. At the peak of the mining services contract, Downer expects to deploy 170 personnel at Gruyere charged with moving approximately 31 million tonnes of material per year to produce on average 270,000 ounces of gold annually.