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Collaboration crucial to success of Gruyere: JV

Friday, 27 July 2018

The synergies between the joint developers of the 5.8 million-ounce Gruyere Project in the Yamarna Belt are what made Gold Road Resources (ASX: GOR) and Gold Fields the perfect collaborators for Australia’s next major gold mine, according to their leaders.

The synergies between the joint developers of the 5.8 million-ounce Gruyere Project in the Yamarna Belt are what made Gold Road Resources (ASX: GOR) and Gold Fields the perfect collaborators for Australia’s next major gold mine, according to their leaders.

At the annual WA Mining Club Lunch on Thursday, held at the Hyatt Regency Hotel in Perth, Gold Road Managing Director Ian Murray and Gold Fields Executive Vice President Australasia Stuart Mathews told a crowd of 500 delegates that the ability for both companies to work together harmoniously was crucial for the success as joint venture partners of Gruyere.

“When we looked at approaching other mining companies to engage with us in the joint venture process, we only engaged with mining companies that we had met over the past few years, that we thought we could work with efficiently over this 13-year project, and that we knew we could have a long term relationship with,” Mr Murray said.

“Gold Fields wouldn’t have even been in the running for this joint venture if there wasn’t a strong cultural fit.”

Mr Mathews said Gold Fields’ values were very similar to that of its JV partner, and the relationship has been further strengthened by a number of initiatives; from joint strategy sessions between the two workforces, to simple coffee dates between the two executives.

“It’s important that Ian and I, at our level, do socialise every couple of weeks at least,” he said.

“Even if it’s just a quick coffee in the morning, we can go over issues and talking points that need to be addressed at the time, and I think that works very well.”

Mr Murray said he learnt very quickly that his colleague was not only a quick decision-maker, but also quick to implement those decisions.

“What has been a breath of fresh air for us is that if something needs to get done, Gold Fields’ Australian management team has the autonomy from Johannesburg to run the region themselves,” he said.

“That cuts time needed to get the authority to enact on decisions, and it is part of the reason why we entered into the joint venture with Gold Fields. But actually seeing that in action… I think it works very well.”

Commenting on Gold Road’s decision to enter into a joint venture agreement over Gruyere rather than build the project as a solo operation, Mr Murray said the benefits started flowing through from the very beginning of the partnership.

He said without Gold Fields’ financial contribution, Gold Road would have had to rely on traditional bank debt methods as well as capital raisings, which would have diluted existing shareholders and stalled exploration spending as debt repayments would have needed to take priority.

“Once we started production we would have been repaying those banks, so our exploration spend for last year and this year would have been zero dollars,” he said.

“Gold Road would probably have consisted of a project team building the project, a finance team and nothing else.

“Instead we’ve been able to kick off a $20 million greenfields exploration spend… we’ve launched the joint venture with Cygnus Gold and invested in that project, and we’re looking globally for any early stage projects that we can get into given that we have cash in the bank, and from next year we will have strong cash flow generation.”

Mr Murray said that future early stage investment would however need to be the right asset; one that Gold Road can get in early, do the right exploration work and take the project through study phases.


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