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.

Client
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 on the Gruyere project has confirmed it as one of the longest-life, lowest-cost undeveloped gold deposits in the world, with an estimated mine life of 15 years.

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

Development of the project is based on one large openpit mine and a conventional semiautogenous/ball mill circuit, gravity/carbon-in-leach (CIL) plant, with throughput of 7.5-million tonnes of fresh ore a year and up to 8.8-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 in 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.

Jobs to be Created
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%.

Value
The project has a forecast capital cost of A$532-million.

Duration
The project’s execution is based on a five-month early works programme, immediately followed by a 24-month construction and commissioning timeframe to achieve first gold production by the end of 2018.

Latest Developments
The Gruyere gold project is advancing according to schedule. Construction has been in progress for more than 12 months.

Project engineering is 72% complete and construction 32% complete, which puts the project on track to be brought into production by the end of the first quarter of 2019.

Costs incurred to date have been in line with the budgeted overall project capital of $532-million.

Mining contractor Downer EDI Mining will begin mobilising its workforce in the March 2018 quarter to start construction of the mining infrastructure. Mining activities will start in the December quarter.

MACA Civil has made good progress with the bulk earthworks and has completed several key components of the contracts, including the 28 km main access road, a sealed airstrip and clearing for the Stage 1 pit and the tailings storage facility (TSF).

The Gruyere main access road, which connects the site with the Mt Shenton‐Yamarna road, and the Gruyere airstrip are open, although the airstrip is accepting only aircraft carrying up to 30 passengers as it awaits Civil Aviation Safety Authority certification to accept larger aircraft (carrying up to 100 passengers). It is expected that certification will be granted in the March 2018 quarter.

Work has begun on the upgrade of the Mt Shenton‐Yamarna road, which is scheduled for completion in the March 2018 quarter, as well as the construction of the TSF embankment walls using material extracted from the Stage 1 pit, which will be the final activity undertaken as part of the bulk earthworks contract and is scheduled for completion in the June 2018 quarter.

To date, the Amec Foster Wheeler Civmec JV has poured 4 200 m3 of the concrete in the process plant area, including the largest single pour to date of 750 m3 for the primary crusher raft slab. A further 10 500 m3 of concrete is to be poured before the process plant is complete.

Meanwhile, construction of the seven carbon-in-leach tanks is progressing to schedule.

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 (engineering, procurement and construction contractor).

On Budget and on Time?
The project remains on schedule and budget.

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