Gold Road [ASX:GOR] Shares Fall on June Quarter Update

Gold Road Resources [ASX:GOR] saw gold sales reach 44,526 ounces at an average price of $2,496 per ounce during the June quarter.

GOR ended the quarter with cash totalling $161.3 million, up from $138 million in the March quarter.

Year to date, however, the GOR stock is down 25%, mirroring the moves of other ASX gold stocks.

For instance, Evolution Mining [ASX:EVN] is down 40% year to date and Regis Resources [ASX:RRL] is down 23%.

Commodity stocks have sold off heavily in recent days as fears of a global economic downturn mount.

Gold hasn’t been spared, with the gold price falling below US$1,800 this month.


Gold Road’s record production

GOR provided a June quarter production update for its joint venture Gruyere Project.

Gruyere is a 50:50 JV with Gruyere Mining, who manages and operates the gold mine.

Gold Road announced that the Gruyere mine produced a record 85,676 ounces of gold — 14,541 ounces more than the March quarter and in line with expectations.

Gruyere processed 2.4 Mt of ore at a head grade of 1.22 g/t and gold recovery of 91.3%.

GOR reported this was the ‘highest throughput and highest average head grade achieved at Gruyere to date’.

Gold Road said production rates ‘remain in line with annual guidance’ of 300,000 to 340,000 ounces.

Unlike some of its peers, GOR said COVID-19 did not have a ‘material impact’ on its gold production.

Exploration into its 100%-owned Yamarna site has begun with four drill rigs, as well as its 50%-owned Golden Highway site.

Financial run-down

With record quarterly production came record quarterly sales.

Gold sales totalled a record 44,526 ounces at the average price of AU$2,496 an ounce.

The sales included delivering 8,700 ounces at an average price of AU$1,977 an ounce into forward sales contracts.

GOR said it ended the quarter with cash and equivalents of $161.3 million — up from the March quarter’s $138 million.

More than $11 million in one-off cash payments were made to fund the settlement of a DGO finance facility.

How to pick winning ASX gold stocks

It’s a tricky time for gold at the moment, with the price of gold falling below US$1,800 an ounce.

The strength of the US dollar isn’t helping, which is trading at 20-year highs against the euro.

Investors are potentially seeing in the greenback as a better safe-haven asset than gold at the moment.

But given the growing fears of a likely recession — coupled with bets central banks won’t be able to tame inflation for a while — the safe-haven appeal of gold isn’t likely to die.

But if gold has its moment once more, what gold stocks should you look for?

How do you go about evaluating the dozens of gold stocks on the ASX?

Our gold guru Brian Chu just recently put together a report that should help answer these questions.

In his report, Brian outlines what to look for in a winning gold stock and the types of gold stocks to consider according to your risk profile.

If you’re interested in reading Brian’s report, access it — for free — here.



Kiryll Prakapenka,

For The Daily Reckoning Australia