Australian (ASX) Stock Market Forum

GOR - Gold Road Resources

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Garpal Gumnut said:
Not yet.

gg
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Ohhh Good timing.

I am also seriously looking at this in the Super
GOR.png


Normally I'd be in straight away. As it bottoms and peaks very often.

However it has really dropped below the red trend line. Might watch and wait a bit.
 

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Fwiw, I'm now looking at GOR as a confirmed third fail at getting through $2 resistance and it doesn't look likely to me that l.40 will hold. A possible scenario is trading down in range fashion to the lower level support @ ~$1.10?
As @UMike's chart shows, a rising trendline support has been decisively broken on high volume, additionally a significant lower low has been made.
I'll be holding but not adding until I can get a handle on what the value might be if the outlook continues at GOR's estimated 2024 level of ~A$2,000/oz AISC for around 160kozs p.a. With at least 7-8 years mining life at Gruyere, no debt, cash bullion $150m currently, equity investments of A$465m currently, and nearby exploration growth prospects. The biggest wild card of course being the future A$ gold price.
Actually, I'll more likely rely on Greg Canavan's adjusted valuation when it presumably comes out following this GOR report.

Held
 
finicky said:
Fwiw, I'm now looking at GOR as a confirmed third fail at getting through $2 resistance and it doesn't look likely to me that l.40 will hold. A possible scenario is trading down in range fashion to the lower level support @ ~$1.10?
As @UMike's chart shows, a rising trendline support has been decisively broken on high volume, additionally a significant lower low has been made.
I'll be holding but not adding until I can get a handle on what the value might be if the outlook continues at GOR's estimated 2024 level of ~A$2,000/oz AISC for around 160kozs p.a. With at least 7-8 years mining life at Gruyere, no debt, cash bullion $150m currently, equity investments of A$465m currently, and nearby exploration growth prospects. The biggest wild card of course being the future A$ gold price.
Actually, I'll more likely rely on Greg Canavan's adjusted valuation when it presumably comes out following this GOR report.

Held
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Thanks @finicky and @UMike .
Finicky
Are you expecting a report from Greg any soon?
I thought the price drop was justified but could not believe that low. Tomorrow will be probably worse with a lower gold price.
 
@Miner hot from the 'fat tail investment advisory' memo and the searing pen of Greg Canavan. Did I mention a highly worthwhile annual sub is only about $195? (Trying to avoid getting pulled up on CR.)

images (3).jpeg

"Hot on the heels of last week’s poor update from Evolution Mining [ASX:EVN], Gold Road Resources [ASX:GOR] revealed disappointing production guidance for FY24 (year ending December).

This follows from a recent update that the three months to 31 December 2023 were weaker than expected.

The main issue for GOR is the availability of skilled labour. This is impacting productivity. GOR explained that it has been an issue for its contractor, MACA Ltd, throughout the year. While the September quarter saw improvements on this front, things deteriorated again in the December quarter.

In addition, the strip ratio increased from 3 in the September quarter to 5.2. This represents a 70% increase in waste mined, which increases costs, for no additional revenue.

In 2024 GOR will continue to mine an elevated amount of waste (as per the mine plan). In conjunction with the labour issues, it means lower-than-expected production guidance for the coming year (and higher-than-expected costs).

Guidance for 2024 is for gold production of between 300,000 and 335,000 ounces (150,000 to 167,500 ounces attributable to GOR) at an all-in-sustaining cost (AISC) of between AU$1,900 and AU$2,050 per attributable ounce.

That compares to 2023 production of 322,000 ounces (162,000 attributed to GOR) at a cost of AU$1,662 per ounce.

So clearly 2024 will see a hit to profitability compared to 2023, absent a rise in the gold price.

Having said that, the Aussie dollar gold price remains in a strong upward trend. So GOR (a completely unhedged producer) will likely get relief from a rising Aussie dollar gold price this year.

The difference between GOR and EVN is that I’m not concerned about GOR’s assets. (You might remember EVN has issues at Red Lake). In GOR’s case, the assets are fine. It’s a short-term labour issue impacting operations.

Moreover, there are no capital expenditure requirements this year for GOR (apart from regular sustaining capital). And the balance sheet is solid. The cash balance is around $150 million, and GOR has no debt.

Still, these productivity issues have impacted my estimate of intrinsic value.

Previously, I estimated value at over $2 per share. Now, following a decline in forecast return on equity (ROE) I estimate fair value at close to $1.60. This includes a 39 cent per share value for the 19.9% stake in De Grey Mining [ASX:DEG].

Another upward leg in the gold price would improve this valuation. But for now, this is how you should look at it.

Given the share price’s sharp fall below this estimate of value over the past few days, I am maintaining GOR as a buy."
 
The only thing wrong with GOR is production affected by labour shortages.
MACA had the contract with Panoramic so they should have over 100 bodies on their books unemployed through the suspension of activities at the Savannah nickel project hopefully some of the this workforce can be redirected to GOR’s operation.
Normal service resumed?
I continue to hold and hope to see GOR claw its way up again.
 
Between the Lines Finance on Patreon came out with a gold and gold stocks briefing and to my surprise he is unenthused about GOR. Contradicting my shallow impressions he says they haven't come up with any interesting exploration results since Gruyere so they are really just a passive partner in Gruyere with a substantial holding in De Grey (DEG). He thinks it is still overvalued and will struggle to rally significantly with at least 2 quarters to go of higher costs from higher waste mining and lower output. Didn't mention the under staffing problem of its mining contractor, MACA. Definitely not a fan.
As an ignorable aside I made an attempt of revaluing GOR based on the lower production, higher AISC guidance announced recently. I made a dubious jump from that to a likely ROE figure for 2025 and arrived at a lower valuation than the current price. Lost my notes.

Held and Holding
 
finicky said:
Between the Lines Finance on Patreon came out with a gold and gold stocks briefing and to my surprise he is unenthused about GOR. Contradicting my shallow impressions he says they haven't come up with any interesting exploration results since Gruyere so they are really just a passive partner in Gruyere with a substantial holding in De Grey (DEG). He thinks it is still overvalued and will struggle to rally significantly with at least 2 quarters to go of higher costs from higher waste mining and lower output. Didn't mention the under staffing problem of its mining contractor, MACA. Definitely not a fan.
As an ignorable aside I made an attempt of revaluing GOR based on the lower production, higher AISC guidance announced recently. I made a dubious jump from that to a likely ROE figure for 2025 and arrived at a lower valuation than the current price. Lost my notes.

Held and Holding
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you have to watch the grades , for sure , but also the rock ( or if you are lucky soil ) it is being extracted from

some of those rocks just eat machinery or require a more complicated extraction process , grade rich seams can wander all over the place , the mine shafts to extract can get complex ( especially it they get lots of wet weather )

sometime 2 or 3 grams a tonne but an easy extraction is the better deal ( and more likely a reliable producer )

hard grit and heavy machinery can be an expensive cocktail
 
Those sort of prices would likely see me doubling my holding. But like you I will be watching the chart and will wait for a set up that comes under my value.

Held and Holding
 
UMike said:
Ohhh Good timing.

I am also seriously looking at this in the Super
View attachment 169762

Normally I'd be in straight away. As it bottoms and peaks very often.

However it has really dropped below the red trend line. Might watch and wait a bit.
Click to expand...
Thanks @UMike

I did miss a knife with seeking advice from the gold mining followers on ASF a month or so back. GOR seems particularly affected by intrinsic factors in its fall from $2.00 recently. The imminent further fall in Gold from $USD $2000 to the $USD $1900 level and below should sharpen the pens of the short sellers in this little miner.

From the chart below it seems to fall in $0.30 increments, so a buy point at $1.10 is nearing. Or will it drop further?

gor.png


It is not often one saves 50% by seeking advice on ASF on a big bet on one and only one of the Gold Miners one might add to one's SMSF by not making that bet.

gg
 

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