8141c392451eac66ff3982.pdf
2015
ABN 13 109 289 527
2015 ANNUAL FINANCIAL STATEMENTS
CORPORATE DIRECTORY
Gold Road Resources Limited (Gold Road or the Company)
DIRECTORS
Ian Murray Executive Chairman Justin Osborne Executive Director Russell Davis Non-executive Director Tim Netscher Non-executive Director Martin Pyle Non-executive Director
COMPANY SECRETARY
Kevin Hart
REGISTERED & PRINCIPAL OFFICE
Level 2
26 Colin Street
West Perth WA 6005 Australia
Telephone: +61 8 9200 1600
Email: [email protected] Website: www.goldroad.com.au
POSTAL ADDRESS
PO Box 1157
West Perth WA 6872 Australia
ASX CODE
GOR
AUDITOR
Stantons International Level 2, 1 Walker Avenue West Perth WA 6005 Australia
Telephone: +61 8 9481 3188
SHARE REGISTRY
Security Transfer Registrars Pty Ltd 770 Canning Highway
Applecross WA 6153 Australia
Telephone: +61 8 9315 2333
Facsimile: +61 8 9315 2233
STOCK EXCHANGE
ASX Limited
Level 40, Central Park 152-158 St Georges Terrace Perth WA 6000
Australia
CONTENTS
CHAIRMAN'S REPORT 4
REVIEW OF OPERATIONS 10
SCHEDULE OF INTERESTS IN MINING TENEMENTS 23
FINANCIALS 25
DIRECTORS' REPORT 26
REVIEW OF ACTIVITIES 30
REMUNERATION REPORT (AUDITED) 32
AUDITOR'S INDEPENDENCE DECLARATION 47
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 48
STATEMENT OF FINANCIAL POSITION 49
STATEMENT OF CHANGES IN EQUITY 50
STATEMENT OF CASH FLOWS 51
NOTES TO THE FINANCIAL STATEMENTS 52
DIRECTORS' DECLARATION 75
INDEPENDENT AUDIT REPORT 77
ASX SHAREHOLDER INFORMATION 78
GOLD ROAD RESOURCES ANNUAL REPORT 20151
Highlights
in 2015
GRUYERE CONFIRMED AS AUSTRALIA'S LARGEST UNDEVELOPED GOLD PROJECT
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Mineral Resource increased 46% to 5.62 million ounces gold
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WA State Government Exploration Incentive Scheme injects A$200,000 for exploration
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Mineralisation extends to at least twice known depth of current Resource
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Intersected mineralisation
1,150 metres below surface with 1,700 metre deep Diamond hole
STRONG MARKET SUPPORT
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A$63.1 million raised
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New institutional shareholders support
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Listed in ASX All Ordinaries Index in March 2015
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Entry into ASX300 Index in September 2015
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Industry recognition-multiple exploration awards
LARGE GOLD PRODUCTION POTENTIAL CONFIRMED
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Scoping Study demonstrates positive Project economics
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Stage 1 Pre-Feasibility Study (Options Study) identifies 7.5Mtpa operation with a
10 to 15 year mine life as optimal
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Potential average gold production of approximately 250,000 ounces per annum for 2.5 to 3.7 million ounces total gold recovered
SUCCESSFUL EXPLORATION STRATEGY
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Identified more than 30 new gold prospects
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Varying levels of Gold mineralisation intersected in all Camp Targets tested
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154,000 metres of drilling completed across six Camp Targets
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Sumitomo achieves 30% interest in South Yamarna JV following A$5 million exploration expenditure
1
Unlocking the potential
FIRST TO EXPLORE AND DEVELOP THE YAMARNA BELT: AUSTRALIA'S NEXT MAJOR GOLD REGION
Gold Road is exploring and developing the Yamarna Belt, a major new gold region with tenements covering approximately 5,000 square kilometres on the eastern edge of the Yilgarn Craton. Gold Road currently owns 100% of the northern part of Yamarna, covering approximately 2,100 square kilometres and 70% of the southern part of Yamarna, which covers approximately 2,900 square kilometres.
Geologically similar to the prolific Kalgoorlie Gold Belt and immediately north of the 8 million ounce Tropicana Gold Deposit, the historically under-explored Yamarna Belt has a current Mineral Resource of 6.1 million ounces of
gold across three wholly-owned gold projects, Gruyere, Central Bore and Attila-Alaric.
Our targeted exploration strategy centres on ten 'Gold Camp Scale Targets' (Camp Targets) each of which has a 15 to 25 kilometre strike length and multiple prospects and targets. This strategy has led to several gold discoveries since 2009, including the world-class Gruyere Deposit.
Exploration of the first Camp Target yielded the discovery of our 5.62 million ounce Gruyere Deposit in 2013-already one of the top ten largest gold resources discovered in the prolific Yilgarn Craton of Western Australia, and one of the most significant gold discoveries made in Australia in the last decade. We believe this is
a convincing demonstration of the potential of this region when explored systematically.
'
'The Gruyere deposit is particularly important because it is the first major gold find in what industry and EIS research indicates is a promising new mineral province, the Yamarna greenstone belt.'1
Bill Marmion, Minister of Mines and Petroleum, Western Australia, June 2015
'
2
1 Department of the Premier and Cabinet media statement 29 June 2015
GOLD ROAD RESOURCES ANNUAL REPORT 20153
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GOLD ROAD
Chairman's Report
Dear Shareholders
It gives me great pleasure to bring you our Company's Annual Report for 2015.
Gruyere is one of the standout gold projects in Australia. A world-class discovery, it is Australia's largest undeveloped gold project and has put Gold Road's Yamarna greenstone belt firmly on the map as an important, under- explored gold region.
The total Mineral Resource for Gruyere is now
5.62 million ounces of gold, bringing Yamarna's total gold inventory to 6.1 million ounces. We reported this upgraded Resource less than
two years from initial discovery, growing the deposit into one of the largest in Australia and confirming Gold Road as one of only a handful of companies with a gold Resource in excess of six million ounces.
Excitingly, the potential size and scale of the Gruyere Project magnified considerably in August 2015 when mineralisation was intersected at almost twice the current known depth, thanks to a 1,700 metre deep stratigraphic hole, co-funded by the State
Government of Western Australia's Exploration Incentive Scheme (EIS). The government's support is helping us to define the size of what
we, believe could be the biggest gold find in Western Australian in the last decade.
We are quickly progressing the Project towards production. Having completed a Scoping Study in January 2015 we immediately commenced a two-stage Pre-Feasibility
Study (PFS) to accurately gauge the viability of the Project. The Stage 1 Option Study was
completed on-time in August 2015 and further substantiated Gruyere as a robust, low-cost project with significant upside. The key findings identified an expected production rate of 7.5Mtpa over a 10 to 15 year mine life with gas delivered by pipeline as the preferred power source.
It is a testament to the skills of our team and the high prospectivity of the Yamarna Belt that we progressed from discovery to Stage 1
delivery of the PFS in 22 months. This is a clear demonstration of the potential of the Company and the belt to deliver results both rapidly and efficiently. We don't know how many more Gruyere-like deposits there are on Yamarna, but our mission is to build a pipeline of gold projects across the region to continue to create value for our shareholders. The development of Gruyere is an important step in achieving this aim.
4
Completion (Stage 2) of the PFS and the Definitive Feasibility Study (DFS) are already fully funded via a strongly supported capital raising which we completed in June this year. The DFS will commence following completion of a positive PFS early next year and be completed through 2016. Activities will include an additional 22,000 metres of drilling to further strengthen our knowledge of the existing
'
ore-body and increase the confidence in the portion of the Mineral Resource which would
''...transition(ing) Gruyere from a standout gold discovery to a potentially robust gold mining project'2
Ian Murray, Gold Road Resources,
January 2015
'
be mined in the first two years of operation. Our strong financial position will allow us to move the Project quickly towards production and maintain our timetable towards mining operations commencing in 2018.
Exploration is fundamental to Gold Road and key to generating long-term value for our shareholders as we continue to prove up Yamarna as Western Australia's most exciting new gold region. In the last year we
drilled 154,000 metres on six of our ten Camp Targets, finding various grades of gold across all locations and identifying more than 30 new prospects. This high strike-rate of success demonstrates the strength of our regional exploration strategy, which focuses on high- priority targets for systematic exploration.
Over the next 12 months we aim to further ramp up regional exploration with a fully funded A$10 to A$12 million program which includes 118,500 metres of drilling across our 100% owned northern Camp Targets: Dorothy Hills (located close to Gruyere), Sun River-Wanderrie and Pacific Dunes-Corkwood.
GOLD ROAD RESOURCES ANNUAL REPORT 2015 5
2 ASX announcement dated 27 January 2015
In March 2015, our South Yamarna JV partner Sumitomo achieved their first milestone expenditure commitment of A$5 million, which enabled Sumitomo to earn a 30% interest in the Joint Venture. Sumitomo has committed an additional A$2.9 million for the regional exploration in 2015. We had some very encouraging results at two of the South Yamarna Camp Targets, with the first Diamond
holes at Smokebush Dolerite intersecting high- grade gold.
Since last August, Gold Road has raised approximately A$63 million, including
a recent A$39.3 million oversubscribed placement to new and existing institutional and sophisticated investors. Given the current uncertainty in global financial and commodity
markets, we believe our strong investor backing demonstrates the market's understanding of the prospectivity of Yamarna and support for our strategy of moving Gruyere into production quickly to build a platform on which to further explore the region.
Over the year I was very pleased that Gold Road attracted a wealth of talented people into our growing Company including geologists and
field assistants; Mr Sim Lau as Development Manager and other key members of the Owner's Team for our Gruyere Project; and Ms Natalie Lund as Financial Controller. I would like to thank the whole team for their outstanding efforts.
I would also like to take this opportunity to thank Mr Ziggy Lubieniecki for his tireless enthusiasm, knowledge and experience which were pivotal in realising the potential of Yamarna. Although Ziggy retired in December last year, he remains central to the Company as an advisor and consultant. We welcomed
Mr Justin Osborne to the Board as an Executive Director in January this year and his disciplined and systematic approach to exploring and proving up mineral systems is a great asset
to the Board.
Our work on Gruyere has led to industry recognition through four prestigious mining awards: the 2015 AMEC Prospector Award, 2014 Mines and Money London Explorer of the Year award, the 2014 Gold Mining Journal Explorer of the Year award and Deloitte's WA Index 2015 Future Reshaper Award. Along with our proud support of the Heart of Gold
GOLD ROAD RESOURCES ANNUAL REPORT 2015
6
campaign by the Gold Royalties Response Group (GRRG) which celebrates the economic and social contribution the gold industry makes to WA, these awards help us to showcase WA's gold industry to a global audience.
I would like to thank my Executive Team as well as Gold Road's Non-executive Directors for their support and guidance as we, as a team, steer Gold Road to its intended destination.
On behalf of the Board I would like to welcome our new shareholders as well as thank our existing loyal shareholders, our stakeholders, contractors and suppliers for their ongoing support. I would also like to thank the traditional owners, both Yilka and Cosmo Newberry, for their ongoing support with heritage surveys, site preparation and rehabilitation works which enables the continuation of our exploration activities. Finally, I would like to thank the Royal Flying Doctor Service for its assistance in regional areas.
I believe that Gold Road has emerged as one of the best known and respected gold exploration companies in Australia and I look forward to the upcoming year and our continued development of Yamarna.
Ian Murray
Executive Chairman
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'EIS [drilling] is helping redefine the size of what could be the biggest Western Australian gold find in a decade.'3
Ministry for Mines and Petroleum, June 2015
' 7
3 Department of the Premier and Cabinet media
statement 29 June 2015
8 GOLD ROAD RESOURCES ANNUAL REPORT 2015
Gruyere Breakthrough discovery
Maiden Resource of 3.84 million ounces gold
Gold Road raises A$23.2 million
Scoping Study: Gruyere an economically robust gold project
Resource grows to 5.51 million ounces gold
Gold Road raises A$39.3 million
Stage 1 of PFS determines size and power options
EIS hole intersects mineralisation at almost twice known depth
Resource grows to 5.62 million ounces with 10% grade increase
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GOLD ROAD RESOURCES ANNUAL REPORT 20159
PFS due for completion
DFS due for completion
Funding and FEED due for completion
Construction due to commence
Operations due to commence
First gold pour anticipated
Review of Operations
THE GRUYERE PROJECT (100% GOLD ROAD)
2015 PROJECT HIGHLIGHTS
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Resource of 5.62 million ounces of gold,
an increase of 46% since Maiden Resource announced in August 20144
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Production currently planned to commence in 2018
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Significant upside potential with mineralised porphyry intersected at 1,150 metres below surface-almost twice the depth of the current resource-and remains open at depth5
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67,665 metres of RC and Diamond drilling completed since discovery
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Excellent grade and geological continuity allows confident infill and extensional drill programs
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Good understanding of geology and mineralisation controls
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Scoping Study shows robust economics
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Stage 1 of PFS identifies optimal size and power options
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PFS on track for completion in March 2016 quarter
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DFS fully funded and set to commence following PFS in early 2016
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Low cost of gold discovery at A$2.00 per Mineral Resource ounce
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WA State Government co-funded EIS 1,700 metre stratigraphic hole
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ASX announcement dated 16 September 2015
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ASX Announcement dated 10 August 2015, Appendix 2 for full information
10 GOLD ROAD RESOURCES ANNUAL REPORT 2015