Gold Road Resources (ASX: GOR) has developed a well-earned reputation for being a company that delivers on what it sets out to do – with interest.
Gold Road Resources recently announced a 50:50 Joint Venture with a wholly-owned Australian subsidiary of Gold Fields Limited for the development and operation of the Gruyere gold project.
Under the terms of the Gruyere Joint Venture (GJV), Gold Fields will purchase a 50 per cent interest in the Gruyere gold project for the price of $350 million, comprising $250 million payable on completion of the transaction, expected in December, and $100 million contributed by Gold Fields to fund Gold Road’s initial cash calls during the construction phase.
“We started the JV process, formally, after the PFS was published in February,” Gold Road Resources managing director & CEO Ian Murray told The Resources Roadhouse.
“We had approaches from major companies last year who wanted to have a look at Gruyere and we discussed what options would suit us best and to look at potential JV partners in parallel with the project finance process.
“Gold Fields was there from the beginning, we had invited companies we thought we could work with and along the way there were certain companies that we didn’t think would fit.
“As we finalised the Feasibility Study that’s when the final negotiations were held on the JV.
“We can now say, hand on heart, Gruyere is a world-class deposit – the final proof of that being Gold Fields spending $350 million to participate in its development.”
The announcement of the JV quickly followed completion of a Feasibility Study on the Gruyere project, which confirmed it to be one of Australia’s most significant undeveloped gold deposits with an Ore Reserve in excess of 3.5 million ounces underpinning average annualised gold production of 270,000 ounces over an initial 13-year Mine Life with a 15 year project Life.
Following the completion of the transaction, and with around $79.1 million already in the bank, Gold Road is fully funded for its share of construction capital for the development of the Gruyere project and to conduct further exploration programs across its now-50 per cent owned Gruyere JV tenements, its 100 per cent-owned North Yamarna tenements and 50 per cent-owned South Yamarna JV tenements.
Gold Road has flagged further exploration on other deposits within the Gruyere JV tenements to supplement ore feed from the planned Gruyere open pit, with immediate attention on the Attila, and Alaric deposits, which contain a combined JORC 2012 Resource of 270,000 ounces of gold at an average grade of 1.59 grams per tonne gold.