Gold Road’s Record Quarter Highlights Risks and Rewards of Unhedged Gold Exposure
Gold Road Resources delivered record gold production and free cash flow in the December 2024 quarter, strengthening its balance sheet and setting ambitious 2025 guidance.
- Record quarterly gold production of 91,631 ounces at A$1,811/oz AISC
- Free cash flow surged to a record A$76.2 million
- Cash and equivalents increased to A$174 million, maintaining a debt-free position
- 2025 production guidance set between 325,000 and 355,000 ounces
- Significant progress on Gruyere underground drilling and Yamarna project development
Record Production and Cost Efficiency
Gold Road Resources Limited (ASX: GOR) has reported a standout December 2024 quarter, achieving a record 91,631 ounces of gold production at an all-in sustaining cost (AISC) of A$1,811 per ounce. This performance reflects full access to the Gruyere ore body in the latter half of the quarter, enabling a steady feed of run-of-mine ore to the mill. The company also mined more tonnes than it processed, contributing to stockpile growth and operational flexibility.
The quarter’s production was sold at a record spot gold price averaging A$4,093 per ounce, generating a robust sales revenue of A$195 million. This combination of strong production and favourable pricing underpinned the company’s financial strength.
Financial Strength and Cash Flow Growth
Gold Road’s free cash flow reached a record A$76.2 million for the quarter, a significant increase driven by unhedged gold sales and disciplined cost management. The company remains debt-free, with cash and equivalents swelling to A$174 million by the end of December 2024. This growing cash reserve provides a solid foundation for ongoing exploration and development activities.
Additionally, the company’s investment portfolio was valued at A$743 million, boosted by market movements including Northern Star’s offer for De Grey Mining. This portfolio adds a layer of financial resilience and optionality for Gold Road.
Operational Outlook and Growth Initiatives
Looking ahead, Gold Road has set 2025 production guidance between 325,000 and 355,000 ounces, with an attributable AISC forecast in the range of A$2,400 to A$2,600 per ounce. This guidance reflects expected increases in material movement and mining complexity as the Gruyere open pit progresses through its staged mine life, projected to extend to at least 2032.
Exploration and development remain key pillars of the company’s strategy. Notably, underground drilling at Gruyere commenced in 2025, targeting resources below the current ore reserves. The Yamarna Mine Readiness Project advanced with the completion of a Pre-Feasibility Study (PFS) for the Gilmour Gold Project, demonstrating a five-year life with projected free cash flow of A$377 million and a maiden ore reserve of 0.19 million ounces at a high grade of 4.10 g/t Au.
Strategic Positioning and Market Implications
Gold Road’s operational excellence and financial discipline position it well to capitalise on a robust gold market. The company’s unhedged exposure to gold prices means it benefits fully from current elevated spot prices, while its strong balance sheet supports ongoing exploration and potential growth projects.
With a long mine life at Gruyere and promising greenfields projects in its portfolio, Gold Road is poised for sustained value creation. The combination of record production, strong cash flow, and strategic exploration investments underscores the company’s commitment to delivering shareholder value.
Bottom Line?
Gold Road’s record quarter sets a high bar as it advances underground exploration and readies new projects, with market conditions likely to shape its next growth phase.
Questions in the middle?
- How will underground drilling results at Gruyere influence mine life and production profiles?
- What impact will fluctuating gold prices have on Gold Road’s unhedged revenue and cost guidance?
- How quickly can the Yamarna Mine Readiness Project transition from PFS to production?