Gold Road maintains two-pronged focus on Gruyere

Not too long after this, Gold Road completed a JORC 2012-compliant update to the company’s 100 per cent-owned Yamarna Mineral Resources, which includes Gruyere as well as the historic resources at Central Bore and Attila Trend.

The combined updated Resource reported in at 134.31 million tonnes at 1.41 grams per tonne gold for a total of 6.07 million ounces of gold, which includes 128.38 million tonnes at 1.36g/t gold for 5.62 million ounces at Gruyere alone.

This represents a three per cent decrease in tonnes, an eight per cent increase in grade and a seven per cent increase in metal compared to the previous Resource.

The updated Resource also includes 100.03 million tonnes at 1.4g/t gold for 4.5 million ounces in the Measured and Indicated resource categories, representing 74 per cent of the total resource metal.

“We have the final Resource model for the PFS,” Gold Road Resources executive director Justin Osborne told The Resources Roadhouse.

“We are currently completing the detailed design work for the pit as well as detailed design work for the plant.

“By the end of the year we will have finalised the technical work for the 7.5 million tonnes per annum plant.

“We are expecting an open pit of around 80 to 90 million tonnes with a head grade of around 1.2 grams per tonne giving us annual production of around 250,000 to 260,000 ounces of gold per annum with a potential mine life of around 11 to 13 years.”

The other major aspect being examined by the PFS is finalising power supply options for the project.

After consideration was given to the alternatives of diesel and trucked LNG fuelled power supply, the preferred option to emerge from the completed Stage 1 of the PFS is gas powered on‐site generation with a gas pipeline to be constructed under a Build Own Operate (BOO) arrangement.

“We have settled on a gas pipeline, we are just in the process of finalising which route we will take for the pipeline and finalising potential contract structures with third parties,” Osborne said.

With the Gruyere PFS well and truly underway, Gold Road is also focusing its exploration efforts around the project with the aim of increasing the already established longevity of the mine.

“There are two budgets for that,” Osborne said.

“There is our own budget and what we anticipate spending on exploration, and there is also the Joint Venture spend from our JV partners Sumitomo.”

Over the next 12 months, Gold Road will be busy as it ramps up its regional exploration program with a fully-funded $10 to $12 million spend, including drilling across its 100 per cent-owned northern Camp Targets at Dorothy Hills, Sun River-Wanderrie and Pacific Dunes-Corkwood.

On top of this, JV partner Sumitomo has committed to an additional $2.9 million spend, having earnt its 30 per cent interest in the JV after spending $5 million by March 2015.

Gold Road recently completed a Western Australian Government Exploration Incentive Scheme (EIS) co‐funded deep diamond drill hole (15EIS001), which confirmed gold mineralisation in the Gruyere deposit extends to more than 1,150 metres below surface, and 680 metres below the current Resource.

The hole achieved a final depth of 1,701.6m, as it returned an intersection of the Gruyere porphyry of 92.5m at 0.62 g/t gold from 1,390m (57 gram.metres).

Of interest to the company was that the intersection was generally consistent with the Resource and drill intercepts it had previously achieved almost 700 metres up‐dip.

Best internal intercepts returned include:

12.8m at 1.43 g/t gold from 1,397m; and

21m at 0.86 g/t gold from 1,448m.

“That intersected porphyry 650 metres below the Resource was slightly out of – what we have determined to be – the main plunge of the system,” Osborne explained.

“The geology is extremely consistent, slightly lower grade in that hole, but we believe the higher-grade-thickened area is a bit further south.

“Conceptually – projecting the main part of the Resource downwards towards the level of the intersection from that deep hole – there is around 500 to 600 metres of dip extent, a potential strike zone of around 500 metres, at an average width of 120 to 140 metres.

“The deepest hole we have below the pit and below the Resource is 188 metres at 1.5 grams per tonne gold.

“If we project that down we see, potentially, another three to four million ounce underground potential.

“We just want to understand, a little bit more fully, what is the real mining potential.

“Conceptually, we believe we have demonstrated that there is another potential Resource, but before we commit to any drilling on that we want to be confident of the possible mining viability.”

Gold Road considers exploration to be a key to continuing to prove up targets within its Yamarna tenement holding, which is large enough to provide a suite of exploration opportunities that means the company doesn’t need to leave its own backyard.

The underground potential at Gruyere is testament to that ideal.

With the already slated 10 to 15 year mine life for Gruyere – should the underground come up trumps, Gold Road anticipates adding a further 10 years of mine life beyond that.

“Of course that is down the track a bit, but it adds significant optionality and strategic value,” Osborne said.

“Ideally with all our exploration opportunities, we will find any number of standalone projects where we can build another mill, or we find anything within 50 kilometres that we can put through the Gruyere plant.

“Anything we find that’s higher grade than Gruyere (1.2 g/t) can replace the Gruyere material running through the mill, which would gradually prolong the mine life.

“Even if we find pits containing one to two million tonnes at these grades then our production profile increases.

“One great advantage of the extended mine life is that it allows us to go out and make these discoveries to add to our Resource base.

“A mine life of just three to four years puts pressure on making these discoveries much sooner rather than later.

“What we have now is a window of opportunity, through which to make decent discoveries, which in turn becomes a pipeline of mill-feed for the Gruyere plant.”

Without being over confident, Osborne said the company expects it can make these new discoveries as long as it does the job right, conducting exploration by following processes it has been successful to date using.

“There has been a massive ramp-up in our learning curve, which has accelerated with the more work we do, which has in turn enabled us to gain a deeper understanding of the Gruyere project,” he said.

“The detail of the work we have completed provides a better understanding of the rest of the Yamarna Belt, its prospectivity, and what to look for.”

Gold Road Reosurces (ASX: GOR)
…The Short Story

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