Gold Road Resources Lowers Guidance, Share Price up 1% (ASX:GOR)
The Gold Road Resources Ltd [ASX:GOR] released a preliminary production update today for the September 2021 quarter.
Gold Road Resources is a gold producer with a 50% stake in the Gruyere Gold mine. Located in the Yamarna Greenstone Belt in Western Australia, the project is a 50-50 joint venture with Gold Fields Ltd and has been producing gold since June 2019.
Gold Road Resources production hit with equipment problems
For the September 2021 quarter, Gruyere produced around 59,371 ounces of gold, up from June’s 53,132 ounces.
A torn conveyor belt and delays in restarting the ball mill resulted in lower production during the June quarter. In the September quarter, production also took a hit from equipment problems.
This time though it was the ball mill trunnion bearing, which was reaching high temperatures. To find the cause of the problem they had to operate the plant at reduced capacity and turn off metallurgical recovery. As it turned out, the problem is due to a misalignment of the feed end trunnion bearing.
They got the ball mill operating again on the evening of 30 September and were able to ramp-up throughput rates over the weekend.
Gold Resources is planning to do more alignment work in October, for when they have scheduled a shutdown.
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Gold Road Resources lowers guidance
As a result of all the issues with equipment that caused lower production in both the June and September quarters, Gold Road Resources has had to lower their guidance.
They had originally forecasted they would be producing between 260,000–300,000 ounces of gold for the year. They now estimate production will be between 250,000–260,000 ounces.
They expect that production for the December 2021 quarter will come in higher, between 71,000–81,000 ounces of gold, mainly because of higher grades and softer oxide ore. They’re also reviewing guidance for all-in sustaining costs for the year and will be providing an update later this month.
While the company had to lower guidance, shares for Gold Road Resources are still up 1% today at time of writing and are trading at $1.25.
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