Why the Gold Road (ASX:GOR) share price is lifting today

Gold Road Resources share price has been all over the map this year. But an announcement this morning sees shares heading higher.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Gold Road Resources Ltd (ASX: GOR) share price has been all over the map this year.

After falling 54% from 24 February through to 16 March during the COVID-driven market panic, shares surged 144% to reach an all-time high of $1.98 by 22 July. Since that high, shares have retraced by 35%, currently trading at $1.26.

Following on a renewable energy upgrade announcement at its Gruyere gold mine this morning, and a slight uptick in the price of gold, the share price is up 1.2% in morning trade.

What does Gold Road Resources do?

Gold Road is an Australian gold producer. The company has a Tier 1 mine and exploration projects in the Yamarna Greenstone Belt in Western Australia's north-eastern Goldfields.

Gold Road owns 50% of the Western Australia Gruyere gold mine, developed in joint venture with Gold Fields Ltd. According to the company, Gruyere is one of Australia's biggest and lowest-cost gold mines, expected to produce 300,000 ounces per year over the next 11 plus years.

Gold Road is part of the S&P/ASX 200 Index (ASX: XJO).

What's driving the Gold Road share price higher?

In an announcement to the ASX this morning, Gold Road revealed a major hybrid renewable power expansion initiative at its jointly held Gruyere Gold Mine.

APA Group (ASX: APA) will install a 4-megawatt (MW) reciprocating gas-fired engine by the middle of next year. APA will also construct, own and operate a 13MWp solar farm and a 4.4MW battery energy storage system. That's expected to be complete by the end of 2021.

The company estimates the cost between $32–38 million. The benefits include increased power capacity to 64MW; reduced carbon emissions; 5% energy cost savings; and increased throughput to 10 million tonnes per annum.

Commenting on the new initiatives, Gold Road CEO Duncan Gibbs said:

Gold Road is proud to be part of this green energy initiative… The power expansion at Gruyere provides an elegant technical solution that reduces greenhouse gas emissions, decreases costs and enables an increase in plant capacity up to a targeted 10 Mtpa from the current nameplate design of 8.2Mtpa.

This will, not only see increased annual cash flow generation for the business, but it will help drive additional unit cost reductions as Gruyere is further defined as a tier one, low cost and long life gold producer.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of APA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Coronado Global, Genesis Minerals, Monash IVF, and Platinum shares are sinking today

These shares are starting the week in the red. But why?

Read more »

A man sits in a chair hunched over a laptop and covered head to toe in frozen icicles to represent Envirosuite's trading halt
Mergers & Acquisitions

Johns Lyng Group shares enter trading halt. Is it a takeover target?

This ASX 200 stock looks ripe for a takeover.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Share Gainers

Why Austal, Botanix, DroneShield, and NextDC shares are storming higher today

These shares are starting the week with a bang. But why?

Read more »

A female coal miner wearing a white hardhat and orange high-vis vest holds a lump of coal and smiles as the Whitehaven Coal share price rises today
Share Gainers

The Coronado Global share price just surged to a 114% weekly gain. Here's why

Investors have sent the ASX coal stock flying higher in June. But why?

Read more »

Two brokers pointing and analysing a share price.
Share Market News

Here are the ASX 20, ASX 50, ASX 100, and ASX 200 shares being added and kicked out of their indices

Let's see what changes are being made at this month's quarterly rebalance.

Read more »

A businessman lights up the fifth star in a lineup, indicating positive share price for a top performer
Share Market News

3 of the best ASX 200 shares to buy in June

Let's see which shares are being rated as top buys by brokers.

Read more »

Sell buy and hold on a digital screen with a man pointing at the sell square.
Broker Notes

Take your profits and run! Brokers say sell these 3 ASX 200 shares

Experts say these ASX 200 stocks are trading at high share prices with limited upside potential from here.

Read more »

A man thinks very carefully about his money and investments.
Share Market News

Buy these dirt cheap ASX dividend stocks for 6% to 11% yields

Let's see which high-yield stocks brokers think are cheap at current levels.

Read more »