Gold Road Resources (ASX: GOR) announced in its September 2024 Quarter Results Conference Call that the Gruyere mine achieved gold production of 68,781 ounces at a cost of AUD2,551 per ounce, with operating cash flow increasing to $89 million.
The company's cash and equivalents rose to $109 million, supported by high spot gold prices and unhedged sales. Gold Road Resources remains debt-free and reported a solid balance sheet with approximately $0.7 billion in liquid assets.
Key Takeaways
- Gruyere mine's gold production stood at 68,781 ounces for the quarter.
- All-in sustaining cost was reported at AUD2,551 per ounce.
- Operating cash flow increased notably to $89 million.
- Cash and equivalents, including Dore and unsold bullion, totaled $109 million.
- The company declared a fully franked dividend payment of $4.5 million.
- Free cash flow significantly rose to $19.8 million.
- Listed investments are valued at approximately $630 million, reflecting an unrealized gain of over $200 million.
- The company is debt-free with a strong balance sheet.
- Exploration drilling commenced at Mallina and Greenvale, with more planned for Balter and Yamarna.
Company Outlook
- Gruyere mine is fully resourced for higher mining rates, aiming for an annual production of 350,000 ounces.
- Yamarna Mine Readiness Project and exploration activities at Mallina, Greenvale, and Balter are ongoing.
- A reserve update for Yamarna is expected in early 2025, with potential satellite operations targeted for mine-ready status by 2026.
- The company expects to maintain normal cost levels moving forward.
Bearish Highlights
- A lost time injury occurred during the quarter.
- Concerns were raised about potential impacts on long-term production if material movement rates fall short.
Bullish Highlights
- Ore mining outpaced processing, leading to an increase in ROM stockpiles.
- Exploration results indicate potential for extending the mine life beyond 2032.
- Unhedged sales strategy has benefited from high spot gold prices.
Misses
- No significant misses were reported during the call.
Q&A Highlights
- Management discussed significant material movement and expectations for a strong December quarter.
- Upcoming guidance to be issued in January will clarify future production plans.
- Initiatives to mitigate disruptions from adverse weather conditions were detailed.
- The company's unhedged position on gold was reaffirmed, viewing hedging as a risk management tool.
- Drilling activities at the Balter prospect are ongoing, with promising initial results.
Throughout the conference call, Gold Road Resources' management conveyed confidence in the company's financial health and operational efficiency. With the Gruyere mine's production on track and exploration projects underway, the company appears poised for sustained growth and profitability. The next update on the company's performance is expected following the December quarter results.
Full transcript - None (ELKMF) Q3 2024:
Operator: Thank you for standing by and welcome to the Gold Road Resources September 2024 Quarter Results Conference Call and Webcast. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to Mr. Duncan Hughes, General Manager, Corporate Development and Investor Relations. Please go ahead.
Duncan Hughes: Thank you, Harmony. Welcome everyone to our September 2024 quarterly analyst call. In the presentation today, we will be referring to the quarterly results slides that can be viewed on the live webcast, our website or on the ASX release. Both on the webcast and on the phone are able to submit a question for us to address at the end of this call. Joining me on the call today, we have Duncan Gibbs, Managing Director and CEO; John Mullumby, Chief Financial Officer; and Keely Woodward (NASDAQ:WWD), Joint Company Secretary. Moving to Slide 3 now for a summary of our September quarter results. Gruyere continues to operate safely, but reported one lost time injury during the quarter. Gold production for the quarter increased to 68,781 ounces at an all-in sustaining cost of AUD2,551 per ounce. Gruyere operating cash flow increased to $89 million quarter-on-quarter and Gold Road free cash flow lifted by almost $30 million quarter-on-quarter to deliver us $20 million for the quarter. Cash and equivalents ended the quarter stronger at $109 million, higher-than-expected, thanks to record high spot gold prices and our unhedged gold sales. As previously guided, the September quarter was a quarter of continuing improvement, as the operation continues to ramp up mining and production rates. After a difficult first half, we have turned the corner, and Gruyere is well set for a much stronger December quarter and 2025. Our listed investments continue to grow in value and are valued at about $630 million to date, an unaudited unrealized gain well in excess of $200 million for Gold Road shareholders. Gold Road continues to make good progress with the Yamarna Mine Readiness project with a reserve update anticipated in early 2025. At this point, I expect us to be able to demonstrate the significant value generated through our exploration expenditure at Yamarna. On the regional exploration front, we have made good progress with drilling commencing at the Mallina and Greenvale projects and drilling expected to be undertaken at Balter and Yamarna this quarter. I'll now hand over to Duncan Gibbs to talk through our quarterly results in more detail.
Duncan Gibbs: Thanks, Duncan, and thanks for everybody for joining us today. I guess all the focus at Gruyere has really been on the mine. So we'll start there. I guess, the mine is basically now fully resourced and staffed up for a higher mining rate, which continued to increase during the quarter. At least, the new owner of MACA, have been very supportive in recapitalizing the fleet and are making significant ongoing changes to leadership to the business process and systems consistent with what you'd expect from a Tier 1 contract to deliver. I've got some notes and relevance to our near-term production is that we are currently blasting and excavating to one floor level in the Stage 3 and 4 area. This places us in a much stronger position to increase mining productivities and increases the ore exposed. So all the ore in the next quarter and into 2025 is coming from the bottom of the pit 4 area. But during September, we actually mined more ore than we processed, and we started to build ROM stocks of full grade ore, which you can see translating through into the grade of the stockpiles. We anticipate this trend will continue through the December quarter and continue into 2025. With the head grade of the plant back up at around the reserve grade of 1.3 grams, we're in a good position to deliver a strong fourth quarter and continue high levels of performance into 2025 and get to where Gold Road has always viewed Gruyere, as around about a 350,000 ounce per annum operation. Delivery of the fourth quarter really starts to shift from the performance of the mine into the usual operating issues of getting the tonnes and grade through the mill. We still clearly got some work to do on getting movement rates up to our target rate of 65 million tonnes to 70 million tonnes. The larger mining floor, as we get all of it down to one level in Stage 3 and 4 will certainly help us lift productivities down there. But probably more importantly is that a greater proportion of the waste movement will come from the Stage 5 mining area, which will greatly assist in driving higher levels of productivity. So if we look at just the Stage 5, this is how it was last week when we had a management team from Gold Road up on site. As you can see, the Stage 5 cutback to the 5 area. It's a very large floor area, currently only one excavator operating in there with most of the fleet focused down in the Stage 3, 4 area. The Stage 5 is a large area. It's primarily oxide waste probably deep shallow. They're all factors that actually help in lifting excavation rates. So mining Stage 5 is really about exposing ore for the longer term from sort of 2026 onwards. As we move into 2025, the typical operating cadence will get down to one or two excavators down in the bottom of the pit in Stage 3, 4 with two to three machines up in the Stage 5 area. So quite a different move to where we've been over the last year in catching up in the waste movement from the Stage 4 area and a relatively tight kind of operating conditions. As well as developing the Stage 5 cutback, which is obviously key to delivering ore into the future, we are actively progressing Golden Highway and that should get through the permitting kind of time lines in 2026, provides additional optionality and risk mitigation to ensuring that we've got future ore delivery. Now, if we can focus on t the here and now going back to the quarter in detail. The total material movement, including waste and ore mining increased quarter-on-quarter to what our record levels in broadly in line with our expectations. Obviously, you're looking at the averages of the quarter and they have continued to improve through the quarter and we're probably up at the cadence rate, but we need to be looking at fairly recent production reports. The mine head grades remained as expected at about 1.3 grams in line with the reserve and you'll note the consistent quarter of the last three grades of mining 1.3 gram, which is in line with the reserve grade. The ore milled for the quarter increased to 2.3 million tonnes, as head grade remained about the same quarter-on-quarter around about 1 gram, reflecting the continued processing of low-grade stockpiles with the mine tonnages still below the milled throughput. The proportion of mined ore feeding the plant improved significantly quarter-on-quarter and the September mining rate exceeded in September with the ore mining exceeding the rate of processing. We've started to grow ROM stockpiles and September production was strong and the higher grades processed in the second half of September contributed to an increase in gold inventory. As a result, the gold recovered was 72,000 ounces on a 100% basis versus the gold produced of 68,781 ounces. The gold inventory held at the end of the quarter of 3,799 ounces worth approximately $14.5 million, obviously, will contribute to the December quarter. All-in sustaining cost was AUD2,551 an ounce, which is obviously based on gold produced. And you can do your own math if that was done on gold recovered. The timing differences of a few days between gold recovery and gold recovered and gold produced. So I think if you look through the difference between gold recovered, gold produced in terms of that's a few days discrepancy, it's probably more of an in-line result, as some of the early broker commentary is making. I guess within the all-in sustaining cost is an additional $10 million of 100% basis mining claim by the contractor. This primarily relates to higher staffing levels required for shifting up to a higher production rate. So we won't see that come through again in future quarters. The all-in sustaining cost increased quarter-on-quarter with slight interest in gold produced and reflects both the higher mining volumes with waste stripping costs, the one-off contractor claim and of course, the timing of gold in gold recovered versus gold produced. The attributable gold sales lifted to 32,507 ounces at a record unhedged sales price of AUD3,719 per ounce. The gold Dore and Bullion at quarter end was substantial at 3,799 ounces or as I noted before, about $14.5 million. The corporate all-in cost or simply all of our costs divided by the ounces fell to AUD2,980 per ounce, much improved quarter-on-quarter and benefiting from an absence of one-off costs seen in the last quarter, which included costs associated with the major rain events and some one-off corporate costs as well as the, obviously, the increase in gold production. We're in the process of finalizing an insurance claim for the recovery of some of the costs associated with the March rain event. You'll recall from the previous quarterly, these totaled about $11 million on a 100% basis, and we're optimistic that, that claim will be resolved by the end of the year and we'll see that benefit flowing through into our corporate costs in the next quarter. I guess, we've retained guidance, and clearly, it's a big -- drives a big quarter. And the guidance was clearly reset really after the rain event, as we saw higher costs and stuff were coming through for the tails dam and royalties on the back of the strong gold price. But clearly it's, in retaining guidance, we're projecting a strong finish to 2024, which clearly doesn't factor in act of gods, flooding rains and other unforeseen events, but it is achievable. As the slide illustrates, the trends of increasing production are pointing in the right direction and key to producing more ounces is mining more ounces. And as communicated in the first slide on the open pit, we're in a good position for the mine to deliver more than we can process in the December quarter. I'll now hand over to John to run you through the financials.
John Mullumby: Thanks, Duncan. On the slide here is the usual waterfall providing a breakdown of our cash flows for the quarter. The solid operating results for the quarter, which Duncan has just walked you through, translated into stronger gold sales and revenue of $121 million and provided Gold Road with $89 million of operating cash flows from Gruyere. These results represent increases of 10% and 20%, respectively, on the prior quarter, a good demonstration of the stronger financial performance and cash flows we expect going forward from the asset. We finished the quarter with $109 million of cash and equivalents on hand, which includes $14.5 million of Dore and unsold Bullion. The quarter also saw a cash outflow of $4.5 million for a fully franked dividend payment. Free cash flow increased substantially quarter-on-quarter with free cash flow generated of $19.8 million, an increase of just under $30 million on the prior quarter. This free cash flow result excludes the large buildup in Bullion and Dore at quarter-end, as well as the dividend payment. In regards to our balance sheet, we remain debt-free, and we have circa $0.7 billion of liquid assets on hand, including our cash and equivalents and our listed investments that were valued at $580 million at the end of September. This liquidity excludes the debt facilities in place, which currently remain undrawn. Finally, it's worth noting that our corporate costs and finance costs, as well as our tax payments have all returned to normal levels in Q3 after a number of one-off impacts in the prior quarter. We expect these normal levels of costs will continue throughout this quarter, as well as going forward, all else remaining the same. Thanks. I'll now hand back to Duncan Gibbs to run you through our discovery results for the quarter.
Duncan Gibbs: Okay. Thanks, John. Once again, the quarter has seen some strong results, drilling below the Gruyere pit, and I'll come to a slide on that in a second. We continue to progress the Yamarna Mine Readiness Project, and that's on track for really getting our ore reserve and starting to outline what we think that project can deliver We expect that to come through in early 2025. We've made some quite good progress Australia-wide on our greenfield exploration activities. Clearly, we had a delayed start in the year with rain just about everywhere. But we've recently completed in the last couple of days, the drilling up at Mallina and the rig there is on the way down to Balter and we're drilling across Greenvale, one of the targets at Greenvale over in Queensland. So we'll start to see results of all that flow through during the second half of the year. So just turning to Gruyere, ongoing program here, which had a hiatus with the rain event here, of course, with the drilling. The new results that we've got through are highlighted in the yellow boxes there. And just, I guess, to remind you of how large and continuous Gruyere, we included within that 146 meters at 1.47 grams, not far below the bottom of the pit. The JV partners will receive a concept study on underground mining options in this quarter, so the December quarter. And that such study in simple terms assumes that the ore body basically continues to about 1.2 kilometers below surface, around about the bottom of this slide. So we've already defined more than 3 million ounces of resources below the final open pit design. So I think it doesn't take much imagination to realize that the ultimate exploration target down to 1.2 kilometers is significantly larger than that. I anticipate the concept study, once that's reviewed and digested by the JV partners is going to shape the ongoing exploration and potential mining studies that will evaluate how we look at extending the mine life at Gruyere well beyond the open pit reserve life that goes out to 2032. Okay. So turning to Yamarna. So of course, all the ground holdings in Yamarna outside the yellow boxes of the JV here, 100% Gold Road ground. And we're continuing to work on the development of those potential sort of satellite resources is really how we're looking at them as opportunities to Gruyere. So we've been operating what we've been calling the Yamarna Mine Readiness Project, which is looking at how we develop the right kind of infrastructure, permitting and approvals to bring those all together over the longer term with a major focus on the technical studies and exploration this year being on Gilmour. So we anticipate getting Gilmour, which is about 300,000 ounces sort of done with the studies in progress at the moment. And our basic target is to get it to the point, where it's mine ready by about 2026. But the timing of when we ultimately develop will be looked at in terms of where it realizes best value for Gold Road, which is likely when there's any surplus capacity at Gruyere. So much of the technical work for that resource reserve update and maiden ore reserve will be available in early 2025. We should able to start to put out what the sort of financials probably look like for Gilmour. And at that point, I expect that we'll be able to demonstrate the significant value of the discovery. Now, we move on to our more general exploration activities. So starting with Mallina, as I've mentioned, actually the drilling has just completed up there. We should see the results come through in the December quarter. The same drill rig is on its way down to Balter at the moment. So Balter, we've done a lot of rock chip mapping, rock chip sampling and mapping, continue to get some more good sort of surface results there. That drilling is due to start in the next week or so and we'll be testing the Northern Salt Well target at that prospect. And if the lab gets going, we'll get some results by the end of the year, if not early in the new year. Okay. Across in Greenvale in Queensland, really, we've got two target areas. We're drilling at a prospect called Graceland at the moment and that hole should be completed in the near future. I guess, after a lot of hard work and good work by the team, we've got access to be able to drill in the more substantive breakaway prospect target, which is what's illustrated on this slide. So we anticipate being able to get in there and drill that. And we see that really as a Mt Leyshon kind of analog. So Mt Leyshon was about a 3.5 million ounce deposit that's located to the south of this property. So what we've got here is a large intrusive-breccia complex and we've mapped extensive alteration systems at surface on that property. Okay. I'll now hand back to Duncan, and he'll give you a bit of a wrap up.
Duncan Hughes: Thanks, Duncan. Looking at the last slide now to close out. In summary, Gruyere operations have turned the corner after a challenging first half. The operation can deliver mining and processing rates needed to sustain 350,000 ounces per annum and we'll commence doing so this quarter and carry on doing so through 2025. Strong gold prices assisted a nice cash build for the quarter. We expect an even stronger cash build next quarter. On the growth front, there's multiple sources of encouragement, including the deep drilling at Gruyere, which continue to support growth in reserves. We look forward to the results of the underground study, which we expect this quarter. Maiden ore reserves in the Yamarna Mine Readiness Project in 2025 will put us in a good position to demonstrate the real value of that discovery, principally at Gilmour. We've drilled rigs at three of our main projects, Mallina, Greenvale and Balter this year. We've also got a rig at Yamarna, as I speak now. And of course, our ongoing strategic investment in De Grey and Yandal Resources is traveling very well, as I mentioned in opening over $630 million of value today. Finally, Gold Road remains in a strong financial position with a growing balance sheet and is happily debt-free and unhedged in a very strong gold price environment. That brings our results presentation to close. I'll now hand back to Harmony for any questions.
Operator: Thank you. [Operator Instructions] Your first question is a phone question from George Eadie from UBS. Please go ahead.
George Eadie: Yes. Good day, gents. My question is at Gruyere's plant. So just on the comment ore mining tonnes greater than plant throughput. Is it fair to assume there's no stockpile feed in December quarter to the plant?
Duncan Gibbs: Look, we typically blend a little bit of oxide because effectively that just gives us bonus tonnes. But we're back, basically, as I've flagged, we're in the, really in the stage now, where the mine is supplying more ore to the plant, than the plant is actually processing. So we're rebuilding ROM pad inventory.
George Eadie: Okay. Thanks, Duncan. And then just can you also maybe help me clarify the total material movement for the month of September and maybe when you're up there last week, what were the sort of annualized rates? Were you just not sure. So are you nearly at 65 million tonnes sort of today or?
Duncan Gibbs: Yes. Look, we're about in that 65 million tonne, 70 million tonne band. I would like to see some more runs on the board before I kind of say it's locked in and loaded. But we're continuing to see an improving trend, and I've got every confidence that we're going to get there.
George Eadie: Yes. Awesome. Thanks. And then just one other one. The insurance claim December quarter update, I might have missed this, but is there a price range you've spoken about or can you maybe help remind us, what we're thinking dollar-wise there?
Duncan Gibbs: Yes. Look, so we haven't put out a specific number. I think probably as you appreciate, settlement with insurance companies normally requires an element of commercial negotiations. We expect it to come through. Obviously, it's sufficiently material for us to mention it. But the kind of direct costs that we saw, as a result of damage or claims from contractors associated with rain events for the last quarter are about $11 million.
George Eadie: Yes, perfect. Thanks, Duncan.
Operator: Thank you. Your next question comes from Andrew Bowler from Macquarie. Please go ahead.
Andrew Bowler: Good day, Duncan and team. Just after a bit of clarification, I think you've made these comments before around reaching material movement planned rates is more about accessing having the pit in the right access position for FY'26 and beyond in terms of production. But just about FY'25, is there a potential that if you don't quite get there, the planned movement rates this year that you might see elevated costs in calendar year '25 despite little impact to production just because you're trying to catch back up?
Duncan Gibbs: Yes. So I think as you're saying, Andrew, I mean, keeping total volume is not the key issue for this year. It's just moving the dirt out of the bottom of the pit floor. So we've broken the back of what we needed to do there and the movement rates in Stage 3 and 4 really start to drop off, as we go forward. Moving into Stage 5, we need to get up to that 65 million tonne, 70 million tonne kind of run rate, so that we are confidently delivering sufficient ore for the plant in the longer term. If there's any shortfall, we need to look at how we recover that. And essentially, there's already sufficient equipment on site at Gruyere to step up to a higher rate if we needed to. But it's kind of within the band of what we're communicating in terms of the total volume movement. And obviously, as we start to put our guidance and outlook, which will come out in January, we'll give you a better color of exactly what that looks like over the next couple of years.
Andrew Bowler: Copy, yes. That was actually my next question about a sort of a couple or a few year outlook. So it sounds like that's coming in January. So that's it for me. Thanks, guys.
Duncan Gibbs: Thanks.
Operator: Thank you. Your next question comes from Daniel Morgan from Barrenjoey. Please go ahead.
Daniel Morgan: Hi, Duncan and team. So it appears like there's been a vast improvement on material movements that has continued and you're expecting a very strong December quarter. Can I just ask, is there a hangover from this year's rain, slower material movements that we can expect for 2025 or have you basically broken the back of the material movement task ahead and you're back to a 350,000 ounce business? Thank you.
Duncan Gibbs: Look, I really see next year is pretty secure as a 350,000 ounce business because, I mean, all the ore basically comes out of the bottom of the Stage 3, 4 pit area. And we don't need particularly high, the strip ratio there is pretty low. As I kind of said, as I was talking, I mean, the plan here will be -- most of the time will be one digger, occasionally two diggers working down there. And the bulk of the material movement actually moves up towards Stage 5. And that's, as we've said, is really about making sure that we're stripping waste fast enough to secure the longer term.
Daniel Morgan: So just to be clear, it sounds like you've got a lot of exposed ore at the bottom of the pit, which secures 2025 and the material movements of 65 to 70 you targeted is needed to get your '26 and beyond business plan to 350,000 ounce, is that right?
Duncan Gibbs: Yes, exactly. So I mean, if we miss the movement rate, it won't affect 2025. What it will impact is the production levels for the longer term.
Daniel Morgan: Thank you very much. Appreciate your perspectives.
Operator: Thank you. The next question comes from Paul Hissey from MA Financial. Please go ahead.
Paul Hissey: Hi, guys. Just I was going to try and probe you a little bit more on your conviction around this fourth quarter, you probably answered that already. But I mean, we're a third of the way through that final quarter and taken that you've chosen to reiterate guidance here, you are envisaging a fairly heroic or record kind of fourth quarter here, just to put you on the spot one more time.
Duncan Gibbs: I think as I said, Paul, I mean, it's a big quarter. Yes, we all acknowledge that. I'm not really concerned about the ore delivery to the plant. I mean, I think with where we are building inventory there, the ore is in front of the mill. Obviously, I can't promise against acts of good and all that kind of stuff, but the ore is basically getting in front of the mill. And I think really Gruyere is returning to what is the normal circumstances of any operation. It's the simple problem of getting the dirt through the plant.
Paul Hissey: Yes. Yes, and I suppose the critical thing as the market looks forward will be the exit rate for the year, right? So even if you fall right on the cusp of that guidance, I guess, and you've spoken a little bit about calendar '25 today, that's the next step looking forward. Just one other question then around '25. I know there was -- it felt like the outlook commentary at the start of this year was a little bit disjointed sort of between yourselves and your JV partner. We expect to see perhaps a more uniform announcement next year when we get those numbers, do you think?
Duncan Gibbs: Look, I think we put out much softer numbers at the beginning of the year. We had some concerns with how we finished late last year. And the production numbers that Gold Road communicates for Gruyere is far more material to our shareholders. So we have to make the judgment call based on what we see at the time, and we've done so a few times in the past. I guess, just back tracking to your earlier comment there. I mean, as I sort of said, I mean, we really see -- we've yet to obviously formalize guidance and what have you for next year. But we do kind of see broadbrush getting us back to kind of 350,000 ounce run rate. And you're pretty good at math, you can divide 350,000 ounce by four, and you're going to realize that we've got to be producing 80,000 ounce to 90,000 ounce kind of quarters consistently to get up at that kind of level.
Paul Hissey: Yes, understood. Thanks for the compliment, Duncan. Yes, that's all for me.
Operator: Thank you. Your next question comes from Milan Jovanovic from JPMorgan. Please go ahead.
Milan Jovanovic: Yes. Good afternoon, Duncan and team. Just one for me. You mentioned mine life extension potential at depths below Gruyere. How long do you anticipate it will take to drill out and prove up the reserves there? And just wanted to get a sense of how the JV is managing drilling and study workflow to ultimately bring this into reserves. Thanks.
Duncan Gibbs: Yes. Look, I don't have the answers on that yet. I mean, really, we've got to get the study and then pull that apart with Gold Fields (NYSE:GFI) and then align on what the plan is. Obviously, a core objective would be to have continuity between the current open pit mine life and how we extend it beyond that. But we're talking -- we have a very large mineral inventory or target inventory below the bottom of the pit. So if we can unlock that price, it gives us a very long mine life for Gruyere.
Milan Jovanovic: Great. Thanks. That's it for me.
Operator: Thank you. There are no further phone questions at this time. I'll now hand back to Mr. Hughes to address your webcast questions.
Duncan Hughes: Thanks very much, Harmony. There's a few on the webcast. First one is from Sabrina. She says, the De Grey shareholding is a great investment strategy for which Gold Road management should be congratulated. Thanks, Sabrina. What do you see as the future of that shareholding? Obviously, a difficult one to answer, Duncan, but, go forward.
Duncan Gibbs: Yes. So I mean, look, I think as Duncan spoked in his introductory comments, I mean, we're sitting on a kind of $200 million plus uplift versus what we paid for that inventory. I guess, we've paid for that position. I guess, we've always looked at De Grey as giving us potential options. And I think when we went into it, there was obviously a strategy around could you put two companies together. I think that's probably fair to say that, that hasn't come together. And De Grey, of course, is larger business than Gold Road. We're quite willing to consider any ways that makes sense for our shareholders to realize value out of De Grey, and that could be, of course, working with De Grey, could be working with other organizations or it could be doing something like using the value of that position to look at other growth opportunities to Gold Road. So we're quite open to looking at how we create value out of that option. And clearly, De Grey is of interest to quite a lot of players in the market. And I suspect ultimately, it will become owned by one of the major players in the market.
Duncan Hughes: Thanks, Duncan. And next one is from Brad Watson from Bell Potter. Apologies, Brad, we didn't send you an invite to the call. The company has previously stated its goal to lift plant throughput to 10 million tonnes per annum. Is there a reason that it's not running at 10 million tonnes per annum currently? And is 10 million tonnes per annum still the target? If so, what's the constraint on achieving this goal?
Duncan Gibbs: Yes. I guess, we've always kind of pitched it as a target. And we're certainly seeing the throughput rate per hour and all that kind of stuff that fits with making that a target achievable. There's still a bit of work, I think, just to do in consistency of throughput performance, availability, those kind of things. We're probably doing a few bits of fine-tuning works on conveyors and things like that next year that will help give us a further lift. But I think it's still a reasonable kind of steer on where we think the plant can ultimately get to.
Duncan Hughes: Thanks, Duncan. A follow-up from Brad as well. He says, looking back at the rain disruptions in 2024, early 2024, has the JV been able to put in place any initiatives to avoid or mitigate repeats of these disruptions?
Duncan Gibbs: Yes. Look, so we've done quite a lot of work. I mean, I guess, starting, we work with the Laverton Shire to sort out quite a lot of the boggy sections of the road really became the major issue. Ultimately, of course, the Great Central Road is going to be the third national highway across Australia. So we are advocating through government and what have you to try and progress that because ultimately, once that's sealed, then it will be much better for Western Australia, as well as Gruyere. We have also looked at, of course, inventory holdings and things like that, that we hold on site. So we've increased diesel fuel already. We are doing some further work to increase fuel inventory. We've looked through things like cyanide, lime and other kind of critical commodities. So a lot of those areas, we have increased stock holdings or we'll do so on a seasonal basis over the kind of the monsoon or wet season that really is the risk period for these rain events.
Duncan Hughes: Thanks, Duncan. And then two questions from Peter. I'll ask the first one. Given where gold prices are, have you considered some hedging to lock in these high gold prices?
Duncan Gibbs: Yes. Look, I mean, we really run a business that's unhedged. We consider hedging fundamentally as risk management. So associated with say taking on debt. Obviously, we don't need debt. But that's always been the sort of underlying philosophy of the Board rather than trying to counter pick the gold price and speculate on where it's going next.
Duncan Hughes: Thanks. And then a follow-up from Peter which is, can you expand on Balter and what attracted you to this prospect? Maybe some insights into possible forward work programs once you complete the maiden drill program?
Duncan Gibbs: Yes. So look, I mean, in very simple terms, it's two large gold in soil anomalies. And the scale and footprint, big enough to stick a multiple million ounce deposit in at the most superficial and simplistic level. We've been out there and done a lot of rock chip sampling and mapping, and we've confirmed that there's outcropping gold mineralization. Really, the drilling that we're doing at the moment is going to be the key test. Are these just really patchy spotty bits of gold mineralization or has it got some width and continuity? So we'll test the Salt Creek target this year and we'll kind of know whether we're seeing economic zones or not, and that will then define what the program is for Salt Creek for next year, and we'll probably drill the other target that we've got sometime in the first half of next year. So very much dependent on the results that we achieve over the next sort of six months to nine months.
Duncan Hughes: Thanks, Duncan. That's it as far as the webcast questions are concerned. Thanks, everyone, for your questions on the phone and on the webcast. That brings a close to our quarterly results. Thanks for your continued interest and support and we very much look forward to speaking again following the December quarterly results in January. Cheers.
Operator: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.
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