Gold Road Reports $43.1m First-half Net Profit, Maintains Dividend Run

Mid-tier gold production and exploration company Gold Road Resources (ASX: GOR) has released its financial results for the six-month period to 30 June 2024.

Gold Road’s principal asset is a half-share in the Gruyere gold mine, in Western Australia’s north-eastern Goldfields. The Gruyere JV is a 50:50 joint venture with Gold Fields (JSE: GFI), which manages and operates the Gruyere gold mine. Gold Road also has a significant investment and exploration portfolio.

Highlights:

Half-year performance and profit

• Revenue from gold sales for the six months totalled $211.7 million (June 2023: $229.0 million)
• Gold sales of 63,542 ounces (June 2023: 80,115 ounces), with reduced production in March and April following an unprecedented and protracted regional rain event
• Operating cash flow for the six months to 30 June 2024 was $68.5 million (June 2023: $110.3 million) due to the impact of the rain event
• Group free cash outflow was $4.2 million (June 2023: $74.6 million inflow) following a $22.6 million tax payment associated with the record profit in 2023
• EBITDA totalled $94.2 million (June 2023: $122.6 million)
• EBITDA margin was 44% (June 2023: 54%)
• Consolidated net profit after tax for the six months was $43.1 million (June 2023: $55.7 million)
• Basic earnings per share were 3.98 cents (June 2023: 5.17 cents)

Strong liquidity with cash and listed investments

• Gold Road ended the half-year with cash and short-term deposits of $79.4 million (31 December 2023: $143.8 million), doré and bullion valued at $6.1 million and no debt
• Strategic listed investments valued at $478.4 million on 30 June 2024 (31 December 2023: $465.0 million)

Fully franked interim dividend

• Fully franked dividend of 0.5 cents per share determined for six months to 30 June 2024 (June 2023: 1.2 cents)
• The record date for the dividend is August 30, with payment (or issue of shares under the DRP) scheduled for September 27

Production outlook

• Gold Road’s 2024 annual gold production guidance remains at 290,000 to 305,000 ounces (145,000 to 152,500 ounces attributable) following a revision in July 2024
• Gold Road’s 2024 annual AISC guidance remains at A$2,050 to A$2,200 per attributable ounce
• Gruyere production ramping up through the second half of 2024

Growth and Exploration Portfolio

• Scoping studies underway to assess Gruyere underground potential. Golden Highway studies continue on schedule
• Drilling and studies delivering encouraging results from Gilmour as part of the Yamarna Mine Readiness project
• Encouraging early-stage results from Gold Road’s exploration programs at Balter, Galloway, Mallina and Greenvale with drilling programs to commence in the second half of 2024.

Commenting on the first-half result, Gold Road managing director Duncan Gibbs said:

“The first half of 2024 was challenging with gold production and exploration efforts impacted by the regional rain events that forced the seven-week closure of the main access road to Gruyere. Fortunately, Gold Road’s unhedged production benefitted from record-high gold prices.

"Gruyere is now well set to deliver against our expectations of this high-quality orebody. I expect to see a ramp-up in gold production through the remainder of 2024 with a sustained improvement in mining rates to support higher levels of gold production in future years.

"The company continues to return income to shareholders, and the board has determined to pay a dividend for the six months to 30 June 2024 of 0.5 cents. In determining the dividend, your board has shown confidence in future cash flow generation following the impact on cash flow from unprecedented weather events experienced in the first half of 2024.”

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