COMPANY OVERVIEW - Gold Road Resources Limited (Gold Road) is an Australia-based mineral exploration company in Western Australia. The Company is engaged in exploring and developing the Yamarna greenstone Belt, which is a gold region with tenements covering approximately 5,000 square kilometers on the eastern edge of Yilgarn Craton, located approximately 150 kilometers east of Laverton in Western Australia. Its other projects include the Gruyere project, the Big Cheese project and the North Yamarna. The North Yamarna contains six of the Company's 10 camp targets on the Yamarna Belt, which include South Dorothy Hill Camp Target, Pacific Dunes-Corkwood Camp Target and Sun River-Wanderrie Camp target. The Yamarna Belt has a mineral resource of approximately six million ounces of gold, with discoveries, including the Company's approximately 5.6 million ounce discovery at Gruyere. The South Yamarna tenements cover an area of approximately 2,900 square kilometers.


GOR Details
 
Gruyere Project‘s Pre?Feasibility Study indicate long term gold prospects: Gold Road Resources Ltd.’s (ASX: GOR) Gruyere Project‘s Pre?Feasibility Study (PFS) for 5.62 million ounce (Moz) development delivered better than estimated results and indicated strong prospects. These results indicate that the project is among major undeveloped gold deposits in the world. The PFS economic and technical feasibility specifies that the project has the capability to deliver around $1 billion of free cash flow (pre?tax) for twelve years of the project life. Overall estimate of the capital costs is expected to reach $455 million or US$335 million which includes $35 million or US$26 million of contingency. Meanwhile, the development of the mine is planned to be from a single large open?pit mine and conventional SAG/Ball Mill Circuit, gravity or carbon?in?leach plant having an output of around 7.5 Mtpa of fresh ore as well as a maximum of 8.8 Mtpa of oxide ore.  The Pre?Feasibility Study modelled the Whittle?optimized open pit shell as well as Ore Reserve at A$1,400/oz. The entire financial analysis was conducted by assuming A$1,500/oz of gold price, which is the five?year historic average. A major update to be noted is the outstanding Maiden Ore Reserve for Gruyere of 3.17 Moz which confirms that the estimated average annual gold production of 265,000 ounces during the entire life?of?mine could be delivered easily. The overall estimated average all?in sustaining cost (AISC) is $960 or US$700 per ounce for the entire life?of?mine (LOM) having a return of less than one third of LOM. The average Gruyere Open Pit was greater than 9,000 Reserve ounces per vertical meter to a final depth of 340 meters.      
 

Gruyere Development Project (Source: Company Reports)
 
Positive results from North Yamarna regional explorations: As per the North Yamarna project’s Assay results at the Sun River? Wanderrie, the Camp Scale indicated several intersections of more than 1.0 g/t Au as well as prolonged the strike length of the Supergroup Anomaly at Wanderrie to 5.2 kilometers against 2.4 kilometers. Six new targets were found at Sun River? Wanderrie Camp which would be under priority for the follow?up RC drilling that has been planned for March 2016 quarter. With regards to the Pacific Dunes-Corkwood Camp Scale which performed first RC drill program at over 50 kilometers to the north?west of the Gruyere Deposit, the results proved a major high?grade bedrock gold mineralization. Over 2.5 kilometer gold anomaly was indicated at Ibanez while no major gold mineralization was intersected at the Rickenbacker target.
 

North Yamarna and South Yamarna Project’s highlights (Source: Company Reports)
 
South Yamarna Project’s Toppin Hill EIS drilling also indicate solid gold prospects: The first diamond hole drilled at the Toppin Hill Dolerite Prospects at a depth of 501.1 metres has indicated a mineralization with an intersection of 9.14 metres at 3.48 g/t Au from 143 metres, comprising 3.48 metres at 6.44 g/t Au from 143.82 metres. The group is finishing the structural and geological model for the Toppin Hill Dolerite which would be supportive for the coming drilling programs. GOR also intends to focus on Toppin Hill in the South Yamarna Joint Venture (SYJV) for this year apart from Smokebush Dolerite.
 
Financial performance highlights: Gold Road Resources has a cash and equivalents of $36.9 million as of December 2015. Management approved an exploration budget of greater than $10 million for this year. Moreover, Gold resources are well positioned to fund the completion of major feasibility study on the Gruyere Project. The group reported revenues of $0.847 million for half year ended on December 2015, as compared to the $0.489 million in the half year ended on December 2014. On the other hand, Gold Road Resources reported a net loss before income tax for the first half of 2016 to $3.697 million as compared to $1.94 million in the first half of 2015. The group witnessed an exploration expenditure of $1.375 million during the period as compared to the $0.342 million in the half year ended on December 2014. Overall loss after tax reached $2.617 million in the December 2015 half year as compared to the loss of $1.94 million in the prior corresponding period. This was partly due to incur of a capital mineral exploration and evaluation expenditure of $55.27 million as of December 2015 against the capital mineral exploration and evaluation expenditure of $43.998 million as of June 2015.
 

Gruyere Upside Potential (Source: Company Reports)
 
March 2016 quarter project plannings: For the Gruyere Project, the group intends to finish and deliver its PFS by finishing the resource model update including grade control RC drilling. The Aircore drill test of north south structure would feature west of Gruyere – 2,000 metres. As per the South Dorothy Hills Regional highlights, the group intends to start broad?scale regional Aircore testing of eastern part of South Dorothy Hills for 3,000  metres. The group would also evaluate Monteith results for planning its further work. With regards to the Sun River – Wanderrie works, the group is planning Wanderrie Supergroup RC program for 2,500 meters. The Aircore anomalies were 2,000 metres while the planned work for the March quarter also include heritage clearances for preparing first pass Aircore testing of southern  continuation  of  Supergroup Anomaly trend. At the Pacific Dunes Corkwood, the group is planning an RC program for testing Washburn bedrock gold mineralization at 2,500 metres. The South Yamarna Project Riviera?Smokebush Project plannings include RC drill testing of the northern strike extension of Smokebush Dolerite at 2,500 metres as well as RC drill testing of >1 g/t Au Aircore targets at Yaffler for 2,850 metres.
 

New Resources for more Discoveries (Source: Company Reports)
 
Strong resources prospects to support the stock: Gold Road Resources has a strong asset base with over 5,000 km of potential exploration tenements on the Yamarna Greenstone Belt coupled with its joint venture explorations with Sumitomo over South Yamarna project. The group has a JORC Resources of greater than 6.1 Moz Au among its three core deposits as well as a Maiden JORC Ore Reserve of 3.17 Moz Au while its ongoing positive exploration results are expected to promise more potential. The shares of GOR surged over 12.82% (as of April 05, 2016) in the last three months driven by its positive exploration results and outstanding gold potential indication from Gruyere Project‘s Pre?Feasibility Study. The recent PFS study of Gruyere Gold Project confirmed the 12 year life for the project. The study also indicated that the project’s payback is in 42 months (32% of LOM) and expects to start the Gold Production by fourth quarter of 2018. Management intends to finish Gruyere project’s Feasibility Study by this year ending enabling them to make an investment decision by next year. Management is also exploring options to further improve its financial performance for this Project during this feasibility stage. Meanwhile, the group is positioning itself to leverage the maximum potential from the Yamarna Greenstone Belt and intends to find more world class deposits as well as develop significant resource Gold Mines. As a part of its strategy initiative, the group is aiming to build resources with more than ten years of life. We believe that the long term investors could consider adding GOR stock to their portfolio as well as leverage the recent correction of 11.11% (as of April 05, 2016) in the last four weeks to enter the stock. Based on the foregoing, we give a “BUY” recommendation on the stock at the current price of  $0.46
 
 
GOR Daily Chart (Source: Thomson Reuters)
 

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