ELKMF - Gold Road Resources Limited (ELKMF) Q4 2023 Earnings Call Transcript

2024-01-29 10:47:02 ET

Gold Road Resources Limited (ELKMF)

Q4 2023 Results Conference Call

January 28, 2024 07:30 PM ET

Company Participants

Duncan Hughes - General Manager, Corporate Development, Investor Relations

Duncan Gibbs - Managing Director, Chief Executive Officer

John Mullumby - Chief Financial Officer

Conference Call Participants

Alex Barkley - RBC

Andrew Bowler - Macquarie

Levi Spry - UBS

Al Harvey - JPMorgan

Matthew Frydman - MST Financial

Daniel Morgan - Barrenjoey

Mitch Ryan - Jefferies

Paul Kaner - Ord Minnett

Presentation

Duncan Hughes

Thank you, Lexie. Welcome, everyone, to our December 2023 quarterly analyst call. In the presentation today, we will be referring to the quarterly results slides that can be viewed on the live webcast, our website, or the ASX release. Those on the webcast and on the phone are able to submit a question for us to address at the end of this call. On the call today, we have Duncan Gibbs, Managing Director and CEO; John Mullumby, Chief Financial Officer; and Keely Woodward, Joint Company Secretary. Moving to Slide 3 now for a summary of December quarterly results. Gruyere continues to operate safely and reported no lost time injuries during the quarter.

Gruyere is now over 1,000 days LTI-free, a great result from the operation. Gold Road's 12-month LTI frequency rate is 1.9 and that's significantly below industry average. As released at the beginning of January, the December quarter saw gold production from Gruyere of 74,659 ounces. The all-in sustaining cost was AUD 1973 per ounce for the quarter, higher quarter-on-quarter largely due to the lower gold production in that quarter. The low gold production is largely the result of mining underperformance and lower-than-planned ore mining, something the JV partners and the mining contractor are working hard to resolve. Despite the strong spot gold price during the quarter, we sold less gold and free cash flow fell from the AUD 52 million generated in the September quarter to just shy of AUD 14 million of free cash flow this quarter.

We closed our quarter in a strong position with the shy of AUD 150 million of cash and, again, no debt drawn. The lower quarterly production resulted in Gruyere delivering to the lower end of our CY 2023 guidance at 322,000 ounces. This was delivered at an attributable all-in sustaining costs for the year of AUD 1,662 per ounce. That was AUD 2 per ounce outside of our annual guidance range. 2024 will see continued work on the Golden Highway, bringing it into production from 2026, but we'll also see a return to drilling below the current pit with the aim of extending the resource and reserve. Our strategic investments continue to hold good value.

Following a placement in De Grey Mining in early October, we returned to our strategic holding of 19.9% of De Grey. And these investments are worth around about AUD 440 million today. We continue to explore across our exploration portfolio in Australia with drilling at Mallina completed and resource definition drilling is set to commence at Gilmour in 2024. I'll now hand over to Duncan Gibbs to talk through our quarterly results in more detail.

Duncan Gibbs

Thanks, Duncan, and thank you for joining us today. Gold production for the quarter was clearly below our expectations with production impacted by mining underperformance. Gold production decreased quarter-on-quarter, largely a result of mining less ore tonnes, particularly late in the quarter. As a result, head grade was down due to the processing of low-grade stockpiles rather than the planned higher grade runner mine 4. Average grade mined of 1.2 grams gold for the quarter was lower quarter-on-quarter, reflecting the areas available for mining and mining practices resulting in higher-than-desired levels of dilution....

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