Target: $0.75 Stop: $0.30
Overview
Gold Road Resources Ltd (GOR) is an Australian minerals company focused on gold exploration in Western Australia. Its primary asset is the Gruyere Project near Laverton, WA, where the Pre-Feasibility Study (PFS) has determined a Maiden Ore Reserve totalling 81.1million tonnes (Mt) grading 1.24 g/t for 3.2million oz of gold. Gruyere is part of a regional exploration license holding covering 5000km2. Catalysts
With the Pre-Feasibility Study complete and ore reserves determined, Gold Road is now targeting completion of the Feasibility Study (FS) and project execution. The PFS indicates a financially viable project generating in excess of A$1billion in free cash-flow over a 12 year project life. The Gruyere project has potential to attract interest from established miners. Hurdles Gold Road is reliant on external capital and requires further funding to develop a mining operation in the Yarmana district. There is no guarantee that the bankable feasibility study or future mining operations can replicate or achieve the parameters outlined in the PFS, nor that gold prices won’t continue to trend lower in the long-term. Investment View Gold Road offers speculative exposure to the domestic gold mining industry. We are attracted to the magnitude of its land package in the Yarmana region, existing reserves at Gruyere, and track record of low discovery costs. Funding requirements and the volatile gold price are principal risks. Following completion of the PFS and Maiden Ore Reserves declare, we expect takeover interest to build up and reiterate our ‘spec buy’ recommendation.
GOR Price at posting:
53.0¢ Sentiment: None Disclosure: Held
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