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Growth Portfolio Reiterate: Gold Road Resources Ltd (ASX: GOR)


Published 11-FEB-2016 00:00 A.M.


1 minute read

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Overview: Gold Road Resources Ltd ("Gold Road", "the Company") 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 totaling 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. Our latest advice was a ‘speculative buy’ recommendation in May 2015.

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 12-year project life. The Gruyere project has the 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 the completion of the PFS and Maiden Ore Reserves declare, we expect takeover interest to build up and reiterate our ‘spec buy’ recommendation.


General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

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S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

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The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

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