Gold Road shares down on revised outlook

Gold Road Resources has forecast lower production this quarter following disruptions at the Gruyere processing plant near Laverton.

The company, which operates the Gruyere mine and processing plant alongside South Africa's Gold Fields, said it expected production for the June quarter to be between 52,000 ounces and 55,000oz.

Its shares dropped more than 7 per cent on the news, closing down to $1.32.

Gold Road revealed it had shut down the plant’s milling circuit to replace a torn conveyor belt, resulting in a reduced processing rate for the quarter along with higher all-in sustaining costs.

AISC for the quarter is expected to be in the range of $1,675/oz to $1,800oz.

The West Perth business also revealed a ‘coupling failure’ in attempts to fix the torn conveyor belt, which resulted in a continued reduced processing rate and with only the SAG mill in operation.

The repairs were completed on June 25 and the processing plant returned to normal over the weekend, Gold Road said.

It is investigating the cause of the coupling failure.

The company, led by Duncan Gibbs, now anticipates full-year production will meet the lower end of its 260,000-300,000oz guidance.

Further, Gold Road has upped its full-year ASIC forecast to between $1,315/oz and $1,475/oz, citing higher maintenance and labour costs. Its previous guidance was $1,225-1,350/oz.