GOR - Gold Road Resources

Sean K said:

Can't find Half Yearly results but the Quarterly doesn't seem to match those Costs/ASIC? numbers of $2100. Looks like their 'equivalents' are quite a bit on the cash side. Must be what they get from DGO deal perhaps?

Last preso broad numbers:

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Full year not half. https://goldroad.com.au/wp-content/uploads/2022/03/2021-Annual-Report_Website.pdf Page 61

$278.6 million receipts/ 123.6koz = $2,260/oz
$278.6-89.3 million (op cashflow) + 60.3 million (capex) + 10 m (leases) = $259.8 / 123.6koz = $2,107/oz
$278.6-89.3 / 123.6koz = $1,540/oz (roughly their ASIC)

AISC is a relatively useless number by itself so I added in capital and leases, (I know it smudges around the timing of costs and sales, but a year is reasonable period to average results in my opinion and it counters the accounting witchcraft used) My biggest issue with small miners is that punters like us are always in the dark with regards to capital/exploration $$$ until the end of the reporting periods.

DGO might be a good idea, but might be a bad idea. Only time will tell - but textbooks tell me in general that using your shares for acquisitions is only done when you feel your shares are overvalued or they are your only asset (i.e a junior explorer). I just personally think it's poor form for a mid-regional miner to invest in a non-producer unless there are some serious synergies (such as deposit next door). There is just so much pressure on these companies to make deals to reward the backroom faceless men. What's in this for DGO?

The Triangle said:

On the half year results at roughly 124,000 ounces GOR made about $2250/oz revenue and had $2100/oz in costs - which left about $150/oz for other things (dividends). That's not a great margin to be playing with given we're seeing diesel and labor costs skyrocket and how difficult it is to get anything with a computer chip. So about $18 million cash for a $1.1 billion market cap. And using GOR shares to dilute holders into acquiring another junior which holds shares in other juniors??? Hmm...

From the recent quarter: "Free cash flow before payment of dividends was $1.1 million for the quarter" - Yet this is based on:
AISC of $1526/oz
Revenue of $2434/oz

However you choose to look at things this is not a great outcome. I liked GOR years ago when it looked like it was going to be a good high tonne/low cost operation but It seems to me this operation has just never quite hummed along as it should have.

From the feasibility: Estimated average all-in sustaining cost (AISC) of A$945 (US$690⁶) per ounce over LOM with a payback of less than one-third of LOM. So in less than 6 years costs have essentially gone up over 60% - is that inflation or incompetence? Blame covid?

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Sean K said:

Can't find Half Yearly results but the Quarterly doesn't seem to match those Costs/ASIC? numbers of $2100. Looks like their 'equivalents' are quite a bit on the cash side. Must be what they get from DGO deal perhaps?

Last preso broad numbers:

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So which of you are correct?

gg

Garpal Gumnut said:

So which of you are correct?

gg

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probably me , with 'be careful '

the ( renamed DGO, formerly Drummond Gold Limited ) certainly never made my radar until this take-over , is the true value lying in the minor shareholdings in other explorers

March 2022 Quarterly Report DGO Gold Limited (ASXGO) is pleased to report on its March 2022 quarter activities. DGO continues to advance its objective of shareholder wealth creation through its brownfield and greenfield gold discovery strategy. This strategy has led to Gold Road Limited (ASX:GOR) making an off-market takeover offer for DGO subsequent to the end of quarter. Highlights
• IOCG targets have been identified at Pernatty by detailed gravity surveys at predicted depths to target of less than 400m.
• A Native Title Agreement for DGO’s 100% owned Pernatty tenements was approved by Common Law Holders of the Kokatha.
• Drilling at Yerrida and Judge’s Find testing the equivalent stratigraphic position to Sandfire Resources’ DeGrussa copper-gold mine intersected extensively altered volcanic and sedimentary stratigraphy with high potential for hosting Volcanogenic Hosted Massive Sulphides (VHMS).
• DGO has a 14.4% interest in De Grey Mining (ASX: DEG). DEG reported the results of extensional drilling at Falcon and Diucon during the quarter. The market value of DGO’s holding at April 21, 2022 was $276 million.
• DGO has a 20.1% interest in Yandal Resources Limited’s (ASX: YRL). YRL reported excellent results for a number of prospects during the quarter. The market value of DGO’s holding at April 21, 2022 was $6.7 million.
• DGO has a 6.6% interest in Dacian Gold (ASX: DCN).
During the quarter DCN announced significant exploration results below the current resources at Jupiter and a maiden ore reserve for the Hub deposit. The market value of DGO’s holding at April 21, 2022 was $21 million.

a side-door ( and possible seat on the board ) to DEG , perhaps


DYOR

buying POTENTIAL resources is usually a 'big boy's game ( NCM , NST , EVN and to a limited extent OZL )

unless they are hoping to be swallowed by someone BIGGER ( making themselves a juicy target )

divs4ever said:

probably me , with 'be careful '

the ( renamed DGO, formerly Drummond Gold Limited ) certainly never made my radar until this take-over , is the true value lying in the minor shareholdings in other explorers

March 2022 Quarterly Report DGO Gold Limited (ASXGO) is pleased to report on its March 2022 quarter activities. DGO continues to advance its objective of shareholder wealth creation through its brownfield and greenfield gold discovery strategy. This strategy has led to Gold Road Limited (ASX:GOR) making an off-market takeover offer for DGO subsequent to the end of quarter. Highlights
• IOCG targets have been identified at Pernatty by detailed gravity surveys at predicted depths to target of less than 400m.
• A Native Title Agreement for DGO’s 100% owned Pernatty tenements was approved by Common Law Holders of the Kokatha.
• Drilling at Yerrida and Judge’s Find testing the equivalent stratigraphic position to Sandfire Resources’ DeGrussa copper-gold mine intersected extensively altered volcanic and sedimentary stratigraphy with high potential for hosting Volcanogenic Hosted Massive Sulphides (VHMS).
• DGO has a 14.4% interest in De Grey Mining (ASX: DEG). DEG reported the results of extensional drilling at Falcon and Diucon during the quarter. The market value of DGO’s holding at April 21, 2022 was $276 million.
• DGO has a 20.1% interest in Yandal Resources Limited’s (ASX: YRL). YRL reported excellent results for a number of prospects during the quarter. The market value of DGO’s holding at April 21, 2022 was $6.7 million.
• DGO has a 6.6% interest in Dacian Gold (ASX: DCN).
During the quarter DCN announced significant exploration results below the current resources at Jupiter and a maiden ore reserve for the Hub deposit. The market value of DGO’s holding at April 21, 2022 was $21 million.

a side-door ( and possible seat on the board ) to DEG , perhaps


DYOR

buying POTENTIAL resources is usually a 'big boy's game ( NCM , NST , EVN and to a limited extent OZL )

unless they are hoping to be swallowed by someone BIGGER ( making themselves a juicy target )

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Please don't ever reply to me with DYOR.

It is rude.

Otherwise a great reply.

Thanks @divs4ever

gg

The Triangle said:

Full year not half. https://goldroad.com.au/wp-content/uploads/2022/03/2021-Annual-Report_Website.pdf Page 61

$278.6 million receipts/ 123.6koz = $2,260/oz
$278.6-89.3 million (op cashflow) + 60.3 million (capex) + 10 m (leases) = $259.8 / 123.6koz = $2,107/oz
$278.6-89.3 / 123.6koz = $1,540/oz (roughly their ASIC)

AISC is a relatively useless number by itself so I added in capital and leases, (I know it smudges around the timing of costs and sales, but a year is reasonable period to average results in my opinion and it counters the accounting witchcraft used) My biggest issue with small miners is that punters like us are always in the dark with regards to capital/exploration $$$ until the end of the reporting periods.

DGO might be a good idea, but might be a bad idea. Only time will tell - but textbooks tell me in general that using your shares for acquisitions is only done when you feel your shares are overvalued or they are your only asset (i.e a junior explorer). I just personally think it's poor form for a mid-regional miner to invest in a non-producer unless there are some serious synergies (such as deposit next door). There is just so much pressure on these companies to make deals to reward the backroom faceless men. What's in this for DGO?

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@Garpal Gumnut and The T, I've been doing a sieve through their last few reports trying to reconcile the costs and I haven't quite got there. I think Triangle is calculating costs slightly differently to what I scan and what the company is claiming.

Their Corporate All in Costs (CAIC) is calculated as: AISC + growth capital + corporate costs + exploration costs)/ounces produced. Which was about $1800 in the March quarterly. I'm not sure what's missing from that and The T's calcs other than leases?

Sean K said:

@Garpal Gumnut and The T, I've been doing a sieve through their last few reports trying to reconcile the costs and I haven't quite got there. I think Triangle is calculating costs slightly differently to what I scan and what the company is claiming.

Their Corporate All in Costs (CAIC) is calculated as: AISC + growth capital + corporate costs + exploration costs)/ounces produced. Which was about $1800 in the March quarterly. I'm not sure what's missing from that and The T's calcs other than leases?

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Thanks @Sean K .

My reading which is not as extensive as yours agrees.

I share @divs4ever point about the t/o of DGO, it complicates the analysis of a successful company though they say it adds value.

The market is never wrong.

gg

Sean K said:

@Garpal Gumnut and The T, I've been doing a sieve through their last few reports trying to reconcile the costs and I haven't quite got there. I think Triangle is calculating costs slightly differently to what I scan and what the company is claiming.

Their Corporate All in Costs (CAIC) is calculated as: AISC + growth capital + corporate costs + exploration costs)/ounces produced. Which was about $1800 in the March quarterly. I'm not sure what's missing from that and The T's calcs other than leases?

View attachment 141769

Click to expand...

The numbers I had for the period Jan 2021-December 2021 and were simple "cash in/cash out" costs - they didn't take into account accounting accruals/payables/receivables. I expect for your average miner that these costs will not be significant year to year (except when developing or closing an operation). For example if GOR spent $10 million on December 31st for a couple of new trucks - that would be included on my costs per ounce calculation - but in reality it wouldn't be a cost assigned to that financial year.

In the March Quarterly GOR reported (their share):

$82.2million in revenue (pg 16 line 1) on 35,080 Ounces Sold (pg 1) = $2,344/oz vs GOR claimed $2,434/oz (above). Maybe some money is just waiting to hit the bank account and it will all come out in the wash - but that would be now 5 quarters (FY21 + Q1) where I take a simple number like revenue and another simple number like ounces sold - divide the two and get something lower than what GOR report. Now on to last quarters costs.

$65.4 M in "operating costs" (pg 16 line 1 - line 1.9) on 35,080 Ounces Sold = $1,864/oz
$13.0 M in "Investing (capital?) cashflows - out" (pg 17 line 2.6) on 35,080 Ounces Sold = $371/oz
$2.7 M in "financing (leases? - should really be in operating) cashflows - out " (pg 17 line 3.10) on 35,080 Ounces Sold = $76/oz

Total those all up and I get $2311/oz of total cash outflows for Q1 - Which subtracted from 2,344 = $33/oz "Cash added to the bank account" which if multiplied by the 35,080 ounces equals about 1.1 million dollars.... 1.1 million dollars for the likes of dividends and acquisitions... Not much for a billion dollar company. Its not AISC or CAIC which is used to pay dividends or make acquisitions - its the actual cash in the bank.

Anyways, point is that GOR need to lift their game. Businesses should make real cash money. Not AISC/CAIC paper money.

The DGO deal gives GOR a significant "valuation" which is not tied to the success or failure of Gruyere.

Garpal Gumnut said:

Please don't ever reply to me with DYOR.

It is rude.

Otherwise a great reply.

Thanks @divs4ever

gg

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the D***

is to remind folks i am NOT a professional and they must double check everything i post

i am sorry if you take offense at that

cheers

Garpal Gumnut said:

Thanks @Sean K .

My reading which is not as extensive as yours agrees.

I share @divs4ever point about the t/o of DGO, it complicates the analysis of a successful company though they say it adds value.

The market is never wrong.

gg

Click to expand...

the 'adds value ' in this case seems to include the value of the DGO share-holdings ( in other companies ) which seems to be over $250 million ( Australian ) so i am guessing all financial metrics in the report are in Australian Dollars ( unless marked otherwise )

so is GOR buying a gold explorer ( and potentially a gold mine developer ) or an investment company focused on gold explorers

if the later is the case is GOR buying a toehold in companies it would consider taking over or entering into a JV at a later date

i think GOR ( and holders ) should be watching future cash-flows very carefully , explorers/developers tend to require regular injections of cash to progress their projects

but complicates , absolutely ,

divs4ever said:

the D***

is to remind folks i am NOT a professional and they must double check everything i post

i am sorry if you take offense at that

cheers

Click to expand...

No offence, just annoyance.

You don't need to say the D*** on ASF. It is a given.

We know you are not a professional.

I would never double check anything you say, I might doubt its veracity, it might lead me to check something else.

But no mate , nobody thinks you belong to that evil, decrepit, deceitful mob known as Financial Advisers UNLESS YOU SAY DYOR.

It is an annoying feature of HC and Comsec and seems to have permeated ASF since refugees from those pathetic forums migrated here,

Can you imagine anyone from ASIC wasting time trawling through ASF members posts.

Asking for advice is the main No No. Giving advice is another.

You and my rabbiting on is not financial advice by its very nature.

DIMMC ?

OWYLMTBME.

I can do a whole post in idiotic acronyms that apart from being annoying would not protect you in a court of law.

If you wish to discuss it further, start a thread on it, END.

gg

Garpal Gumnut said:

No offence, just annoyance.

You don't need to say the D*** on ASF. It is a given.

We know you are not a professional.

I would never double check anything you say, I might doubt its veracity, it might lead me to check something else.

But no mate , nobody thinks you belong to that evil, decrepit, deceitful mob known as Financial Advisers UNLESS YOU SAY DYOR.

It is an annoying feature of HC and Comsec and seems to have permeated ASF since refugees from those pathetic forums migrated here,

Can you imagine anyone from ASIC wasting time trawling through ASF members posts.

Asking for advice is the main No No. Giving advice is another.

You and my rabbiting on is not financial advice by its very nature.

DIMMC ?

OWYLMTBME.

I can do a whole post in idiotic acronyms that apart from being annoying would not protect you in a court of law.

If you wish to discuss it further, start a thread on it, END.

gg

Click to expand...

i double check ( and triple-check ) myself all the time , so hope others always make their own decisions ( and make decisions in their own best long-term interests )

cheers

divs4ever said:

i double check ( and triple-check ) myself all the time , so hope others always make their own decisions ( and make decisions in their own best long-term interests )

cheers

Click to expand...

No worries.

I value your posts.

But really, ASIC don't give a rats about you.

They can't even catch the real crooks.

Keep on posting. I always read what you say.

I suppose if you need to put in DYOR, it's none of my business. But put in BYO, FFS and ATM or maybe CBA or ANZ , they are as meaningless to protect you if the bad boys came after you as DYOR.

gg

don't get me started on ASIC , APRA , SEC and similar ,
the things i have noticed on the ASX ( and in the US ) that seem to be completely unnoticed by the regulators

while there have been clear examples of 'insider trading ' in the US , one might wonder how much of that happens in Australia ( and NZ )

after all , from memory only Malcolm Turnbull was under scrutiny for his investment holdings , why him only , are the rest too dumb to invest in anything

( but i suppose Clive Palmer will be fair game if elected this time )

maybe we need an app. that tracks the portfolio moves of Australian politicians and senior officials ( like they have for Nancy )

my strategy is to help the novices attain savvy quickly , so the bad boys get distracted by superfluous movement , and deal with a smaller assault when they try ,( use their greed against them )

GOLD ROAD TO PROCEED TO COMPULSORY
ACQUISITION OF DGO
▪ Gold Road now holds a relevant interest in 95.14% of DGO’s shares
▪ Gold Road is moving to compulsory acquisition of the remaining shares in DGO
▪ Gold Road’s Offer will close at 7.00pm (Sydney time) on 30 June 2022
▪ DGO shareholders who accept the Offer before it closes will receive their consideration
sooner than through compulsory acquisition
▪ Trading in DGO shares on ASX will be suspended 5 business days after today
Gold Road Resources Limited (ASX:GOR) (Gold Road) refers to it recommended off-market
takeover offer (Offer) to acquire all of the fully paid ordinary shares in DGO Gold Limited (DGO)
which was announced on 4 April 2022.
As at the date of this announcement, Gold Road had a relevant interest in 95.14% of DGO’s
shares.
Gold Road welcomes all DGO shareholders who have now become Gold Road shareholders.
Closing Date of the Offer and Compulsory Acquisition
The Offer is scheduled to close at 7.00pm (Sydney time) on 30 June 2022 and will not be
extended further.
As a result of having a relevant interest in greater than 90% of DGO’s shares, Gold Road will now
proceed to acquire the remaining DGO shares under the compulsory acquisition provisions of the
Corporations Act 2001 (Cth) (Corporations Act). The compulsory acquisition will be on the same
terms as the Offer, that is, 2.25 Gold Road shares for every 1 DGO share.
The compulsory acquisition process, which is subject to the Corporations Act, is likely to take approximately 4 to 6 weeks,
but may take longer in some circumstances. DGO shareholders who have not yet accepted the Offer may still, and are
urged to, do so before the Offer closes at 7.00pm (Sydney time) on 30 June 2022 in order to receive their consideration
within 7 business days of their acceptance being processed. Otherwise, their DGO shares will be compulsorily acquired
and they will have to wait at least four weeks to receive their consideration.
DGO shareholders should also be aware that they may not be able to sell their DGO shares on-market after 1 July 2022,
which is when trading in DGO shares on ASX is likely to be suspended in accordance with ASX Listing Rule 17.4.
A copy of the compulsory acquisition notice and accompanying letter to be sent to the remaining DGO shareholders has
been released to ASX today.
The compulsory acquisition notice sets out the compulsory acquisition procedure and the remaining DGO shareholders’
rights. The compulsory acquisition notice has been lodged with the Australian Securities and Investment Commission
today and will be dispatched to DGO shareholders who have not accepted the Offer as required under the Corporations
Act.
Please note that DGO shareholders who have already accepted the Offer do not need to do anything further.
Page 2 of 3
Acceptance of the Offer
Acceptance forms have been provided to all DGO shareholders. DGO shareholders who hold their DGO shares through
CHESS can instruct their broker to accept the Offer on their behalf. Please note that DGO shareholders may also post
original documents in accordance with the instructions set out in the acceptance form.
DGO shareholders who require assistance can contact Gold Road’s Offer Information Line on 1300 620 417 (within
Australia) or +61 3 9415 4653 (outside of Australia), Monday to Friday between 8:30am and 5:00pm (Sydney time).
This release was authorised by the Board of Directors of Gold Road.




===================================================================================

DYOR

i hold GOR ,

was never convinced this was a good move , but it is a done deal now

RECORD QUARTERLY PRODUCTION & GOLD SALES FOR JUNE 2022 QUARTER

Gold Road Resources Limited (Gold Road or the Company) is pleased to present a preliminary
production and financial update for the June 2022 quarter. The Gruyere JV is a 50:50 joint
venture with Gruyere Mining Company Pty Ltd, a member of the Gold Fields Ltd group
(Gold Fields), who manages and operates the Gruyere gold mine. Further details will be available
in the full June 2022 quarterly report scheduled for release later this month.
June Quarter Production
 Gruyere produced a record 85,676 ounces of gold (100% basis) during the quarter (March
quarter: 71,135 ounces), in line with expectations.
 Gruyere ore tonnes processed totalled 2.4 Mt at a head grade of 1.22 g/t Au and a gold
recovery of 91.3%. The highest quarterly throughput and highest average head grade
achieved at Gruyere to date.
 Production rates remain in line with annual guidance of 300,000 - 340,000 ounces
(150,000 - 170,000 ounces attributable).
 Gold Road and Gruyere have to date had no material impact on gold production from
COVID-19.
Financial and Corporate
 Gold Road’s gold sales totalled a record 44,526 ounces at an average price of A$2,496 per
ounce and included delivery of 8,700 ounces at an average price of A$1,977 per ounce
into forward sales contracts.
 The Company ended the quarter in a strong position with cash and equivalents 1 of
$161.3 million (March quarter: $138.0 million) and no debt drawn. This cash and
equivalents position is after over $11 million of one-off cash payments during the quarter
to fund the settlement of a DGO finance facility and DGO transaction costs following the
change of control of DGO Gold Ltd.
 Successful outcome of recommended takeover of DGO Gold Ltd. Gold Road holds a relevant
interest of 97.9%2 and the offer has moved to compulsory acquisition of the remaining shares in DGO Gold Ltd.
 Gold Road (via the acquisition of DGO Gold Ltd) now holds a 14.4% shareholding in De Grey Mining Ltd, a 6.8%
shareholding in Dacian Gold Ltd, a 20.1% shareholding in Yandal Resources Ltd, and a diverse portfolio of
exploration tenements.3
Discovery
 Gold Road currently has four drill rigs operating at Yamarna (100%) and the Golden Highway (Gold Road 50%)
as the Company continues to actively explore for a meaningful discovery.
This release has been authorised by the Board. For further information, please visit goldroad.com.au or contact:

============================================================



i hold GOR

GOR this quarter:

AISC: $1426
Cash on hand end of qtr: $91 million
Cash on hand start of qtr: $161 million
Cash decrease Q on Q: $70 million

With $80 million spent on Degrey shares and a $10 million dividend my rough calculation is that they generated $20 million of positive cashflows in the quarter - which is about $80 million a year. If that is all paid out as a dividend at a market cap of $1.65 billion it's a 4.8% dividend - ok for a miner but only average by dividend standards. Not highly accurate analysis I know - but it's a rough calculation which tells me that I should still keep an eye on GOR. I think of all the goldies out west they've probably had the best quarter?

Mines eventually run out of gold/copper/nickel/iron/zinc/etc. etc. I hope GOR makes some moves soon to either transition itself into an investment vehicle (which means selling their share of Gruyere) or does something to open up additional mines.

Gold Road boss Duncan Gibbs may have given a hint to the holder of de Grey mining that they are not satisfied with 20% of the stocks and may go higher. From The Australian

Shareholders in De Grey Mining who are yet to top up their position through the company’s share purchase plan may want to have a quick listen to the comments made by Gold Road boss Duncan Gibbs before Friday’s cut-off date.
The $1-a-share SPP is already a no-brainer for those with the spare cash lying around, given that De Grey has been trading above the issue price since mid October.

But in last week’s analyst call to discuss Gold Road’s September quarter production figures, Mr Gibbs added just a touch more fuel to the speculation that Gold Road may not quite be finished with its 20 per cent holding in De Grey.
De Grey is on the hunt for some fresh faces for its board, after the surprise resignation of Samantha Hogg ahead of the company’s November 24 annual shareholder meeting.

It also lost non-executive directors Ed Eshuys and Jeffrey Parncutt in early September.

Both were directors of DGO Gold, and left the De Grey board after DGO was taken out by Gold Road.

That takeover resulted in Gold Road emerging with a 14.5 per cent stake in De Grey, which it has since topped up to 19.99 per cent.

Click to expand...

Mick

The Triangle said:

GOR this quarter:

AISC: $1426
Cash on hand end of qtr: $91 million
Cash on hand start of qtr: $161 million
Cash decrease Q on Q: $70 million

With $80 million spent on Degrey shares and a $10 million dividend my rough calculation is that they generated $20 million of positive cashflows in the quarter - which is about $80 million a year. If that is all paid out as a dividend at a market cap of $1.65 billion it's a 4.8% dividend - ok for a miner but only average by dividend standards. Not highly accurate analysis I know - but it's a rough calculation which tells me that I should still keep an eye on GOR. I think of all the goldies out west they've probably had the best quarter?

Mines eventually run out of gold/copper/nickel/iron/zinc/etc. etc. I hope GOR makes some moves soon to either transition itself into an investment vehicle (which means selling their share of Gruyere) or does something to open up additional mines.

Click to expand...

costs are ( mostly ) increasing across the globe , there is a realistic possibility credit availability will decrease , not a good recipe for a miner ( or brownfields project ) not fully cashed up ,

GOR might decide to wait ( and accumulate gold and cash ) looking for JVs , earn-ins , straight out take-overs , or even new tenements , near recent finds ... maybe even chase a different resource on an existing lease

the big trick will be to keep a low-profile lest a bigger predator feels hungry

Not sure where GOR is going at the moment, I think they have a lot to sort out.
If they make the right moves and production does increase then I can see this north of $2 if the gold price does make record highs this year and stays above US$2000.