30/07/2018 - 15:35

Gruyere set to cost $621m

30/07/2018 - 15:35

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Gold Road Resources has flagged further cost increases at its half-owned Gruyere gold project, while also extending an earthworks contract with MACA at the site.

The project is a 50:50 joint venture between Gold Road Resources and Gold Fields.

Gold Road Resources has flagged further cost increases at its half-owned Gruyere gold project, while also extending an earthworks contract with MACA at the site.

The company said today it revised its forecast capital cost up to $621 million.

In April, Gold Road said the project would come in at the upper end of the capital cost estimate between $506 million and $585 million, after initially estimating a $532 million expenditure.

Gold Road said first gold was still scheduled for the June quarter.

The project is a 50:50 joint venture between Gold Road Resources and Gold Fields.

The company said the latest upgrade in costs included $30 million due to changes in the scope of works, added costs associated with extreme weather conditions, design changes and increases in the schedule of rates.

Also within the increased price tag for the project was a $30 million contingency.

Other cost pressures comprised increased charges for certain equipment, along with employment changes due to a tighter labour market and increases in camp and certain logistical costs.

“Gold  Road’s  estimated  share  of  scope  changes  and  force  majeure  costs  to  date  is  $15  million (50 per cent  basis),” the company said in a statement. 

“Accordingly, Gold Road anticipates funding a total share of the final forecast capital of $284 million representing an 8 per cent increase on budget, and which is expected to be funded from Gold Road’s existing cash and working facilities.”

Gold Road said Maca, which completed the main bulk earthworks contract in June, was now working on a second contract associated with the lining of the tailing storage facility.

“Appointed mining services contractor, Downer EDI is progressing well with  the construction of its mining and  workshop facilities expected to be completed in the September 2018 quarter,” Gold Road said.  

“The bulk of the Downer workforce  are scheduled to mobilise to site in the December 2018 quarter in time to start pre‐strip activities on the Gruyere  open pit in early 2019. “

 

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