Name of the Project
Gruyere gold project.

Location
The project is located in the Yamarna greenstone belt, about 200 m east of Laverton, in Western Australia.

Project Owner/s
The project is a joint venture (JV) between Australia’s Gold Road Resources and South Africa’s Gold Fields.

Gold Road and Gold Fields entered into a 50:50 JV over the Gruyere project in November 2016. The South Africa-based major paid A$350-million for its share in the project.

Project Description
A feasibility study has confirmed it as one of the longest-life, lowest-cost undeveloped gold deposits in the world, with an estimated mine life of 12 years. The expected ounces of gold recovered over the life of the project are estimated at 3.47-million ounces.

The project has total proven and probable reserves of 91.6-million tonnes grading 1.2 g/t gold. The Gruyere JV has also awarded mining leases over additional mineral resources at Central Bore and Attila-Alaric, which do not form part of the Gruyere project feasibility study.

Development of the project is based on a large openpit mine, conventional semiautogenous grinding/ball mill circuit and gravity/carbon-in-leach (CIL) plant, with throughput of 7.5-million tonnes of fresh ore a year and up to 8.2-million tonnes of oxide ore a year.

A mining contractor will undertake activities, with Gold Road providing technical and managerial direction.

The feasibility study proposes that the pit be mined in four stages. Stages 1 and 2 comprise two independent pits at the northern and southern ends of the deposit. Stage 3 will combine the two starter pits and Stage 4 will cut back to the final pit design.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value (NPV), at an 8% discount rate, of A$486-million and an internal rate of return (IRR) of 24% at a A$1 500/oz gold price. At a A$1 750/oz gold price, the NPV increases to A$910-million, with an IRR of 35%.

Capital Expenditure
In July 2018, an independent third-party review of the definitive estimate for the Gruyere gold project increased the capital cost estimate to A$621-million, up from A$532-million.

The updated capital cost included scope changes and force majeure costs of A$30-million, as well as a A$30-million contingency.

Key contributors to the increased capital cost included a range of scope changes that will improve the operability and maintainability of the process plant and infrastructure, as well as advance operating and capital expenditure, including the buying of additional equipment previously intended to be hired.

Costs will be funded from existing cash and working capital facilities.

Planned Start/End Date
Gruyere poured its first gold at the start of July 2019; the project is now ramping up to nameplate capacity.

Latest Developments
Gold Road Resources and Gold Fields have started ramping up the Gruyere gold project to nameplate capacity.

The JV partners have completed the commissioning of the final components of the process plant, with the ball mill and gravity circuit now operational.

The project is expected to produce between 75 000 oz and 100 000 oz of gold in the 2019 calendar year.

Cost guidance for the year will be reviewed once commercial production is declared, which is currently expected to be midway through the six- to seven-month ramping-up period.

Life-of-mine average production at Gruyere is expected to be 300 000 oz/y at an average all-in sustaining cost of about A$1 025/t over the 12-year mine life.

Key Contracts and Suppliers
Amec Foster Wheeler and Civmec (EPC), APA Group (pipeline and gas-fired power station), MACA (airstrip) and MACA and ACJV (Yeo borefield construction), Amec Foster Wheeler Civmec JV (EPC contractor).

On Budget and on Time?
The project remains on schedule for first gold production in the June 2019 quarter and within previously announced total cost estimates.

Contact Details for Project Information
Gold Road Resources, tel +61 8 9200 1600, fax +61 8 9481 6405 or email perth@goldroad.com.au.