Consensus community valuation
Return on invested Capital YOY is rising.
Market Cap ($M): 1,853
https://hotcopper.com.au/threads/ann-agm-2024-ceo-presentation.8016870/
Not much 'hard' evidence of GOR outlook..
https://hotcopper.com.au/threads/ann-agm-2024-chairmans-address.8016864/
AGM 2024 Chairman's Address
Cash and equivalents of $146.2M on 31 March 20241
Free cash flow generated of $5.5M during the quarter despite rain impacts
Listed Investments valued at $469M on 31 March 20242
1.0 cent per share ($8.9 million) fully franked dividend returned to shareholders following record financial year (CY2023)
Return (inc div) 1yr: -8.01% 3yr: 9.05% pa 5yr: 12.86% pa
Scroll down - latest updates are at the end:
2019: Old price target was 80c. They've blown through that.
New price target = $1.20. They're already above that, but I'm not sure they're worth $1.30 to $1.40 - where they're at currently. I don't own any GOR shares.
28-Jan-2020. OK, new PT = $1.60, provided A$ gold price stays over $2,200/oz. I don't follow GOR closely, and still don't hold any, but I recall that they had/have plenty of gold, mostly low-grade, but close to surface and easy to get at and cheap to process. Now that they are producing successfully, with no major headaches or bottlenecks in the processing plant during the ramp-up phase apparently, I think they will start to appeal to a wider audience. I note they're now in the ASX200 and therefore BlackRock and Van Eck are both substantial holders now (with each of them owning 8% to 9% of GOR). GOR have the potential to become a similar gold miner to Regis Resources (RRL), who also have relatively low grades, but similar low costs because the ore is so easy to get at and cheap to process. Regis has been a wealth winner for their shareholders for a long time now, with many more years left to go. They're no Northern Star (NST), but they're still pretty decent. However, it's worth remembering that GOR only own 50% of Gruyere - with Gold Fields owning the other half. Gold Fields Limited is one of the world's largest gold mining firms. Headquartered in Johannesburg, South Africa, the company is listed on both the Johannesburg Stock Exchange (JSE) and the New York Stock Exchange (NYSE). There is always the possibility that Gold Fields could at some point look to buy out GOR, but then the latest trend is for larger goldies that are based and listed outside of Australia to actually divest their Australian mines. Most of them are now focussed elsewhere, like Canada. But I digress. Must be the red wine. GOR will probably go higher. They've broken through my last two price targets, so here's my new one. Let's see if they can get to that one.
28-July-2020: Yep, they blew through that $1.60 price target also. The rising gold price has a lot to do with it. My new PT is $2.20. It's not very ambitious, and it's based on nothing more than momentum really, but I think they can get there. I've had a close look at GOR a few times in recent months, but still don't own any. I hold a heap of others though.
27-Jan-2021: Adjusting PT down due to sentiment shift since July/Aug last year. I added RMS and GOR shares to my SMSF portfolio in the second half of 2020, and I like Gold Road (GOR) for a number of reasons but particularly for the vast exploration upside potential in their extensive tenements. And their market leading low AISC (All-In Sustaining Cost per ounce of gold produced). However the market isn't too interested in them at this point, so a lower PT seems warranted. $2.20 is still OK for a 5-year view, so by January 2026. My one year PT is now $1.77.
04-Aug-2021: Update: Happy with $1.77. No change to the investment thesis. Still holding GOR in my super, and on my Strawman.com scorecard/portfolio.
12-Feb-2022: Update: Marked as stale again, but I don't think I need to change that price target. I had set that $1.77 PT as a 12 month PT back in January 2021, so to occur by 27-Jan-2022, and that didn't happen. GOR got up to $1.67 in November, but that was 10 cents short of my PT. The gold price ran out of steam and has been tracking sideways mostly, a little up, a little down, but no strong trend in either direction of late. It wouldn't take much to see GOR back over $1.77; they reached $1.90 in July 2020. I'm happy with that PT, and I still hold Gold Road shares both here and in my SMSF. No change to the investment thesis. Same PT, but new timeframe - so... by March 2023. That would be a 30% return from the $1.36 level they closed at today. I'd be happy with that. I think they'll get there. I've just got to be patient. One foot in front of the other... Down that yellow brick road.
17-April-2024: Update: I haven't updated this one for over two years - and my thinking has changed. GOR have been above my previous $1.77 price target multiple times in the past year, however I sold my GOR out of my SMSF today and also out of my Strawman.com portfolio. I thought there were going to buy something, but I really didn't want them to go offshore, as NST did with Pogo and EVN did with Red Lake. GOR's interest in Greenstone Gold Mines in Canada was leaked (probably by a rival bidder) to the media prompting this response by GOR: Response-to-Media-Speculation.PDF
Looks like Gold Road were angling to buy the 40% of Greenstone that is owned by Orion Resource Partners. TSX-listed Equinox Gold (EQX.tsx) own the other 60% and are the mine's operators, so if this one went through, Gold Road would be the junior partners - and non-operating partners - in two mines, Gruyere in WA (majority owned and operated by South African based Gold Fields), and Greenstone in Ontario, Canada (where Equinox would remain the majority owners and operators).
Greenstone is a BIG gold project.
According to The Australian, on Monday (15th April 2024), Orion is seeking a A$1 billion-plus (about US$648 million) valuation for Greenstone from Gold Road Resources and the article in The Australian suggested that GOR would require a "monster capital raising" if they were to proceed with the acquisition, which seemed to spook the market.
Gold Road’s shares dropped 6.6% to A$1.70 by the end of Monday’s trading, surpassing the losses seen by other gold companies. This movement in the stock price suggests that investors are, in fact, expecting a fundraising effort.
Gold Road had A$143.8 million in cash and A$465 million in investments by the end of 2023, with a significant portion represented by its 19.9% stake in gold company De Grey Mining (ASX: DEG).
Shares in De Grey also fell by 4.7% on Monday, further suggesting that some market players believe Gold Road may sell its stake in De Grey to generate the necessary funds to acquire Orion’s 40% in Greenstone Gold Mines.
Greenstone owns a portfolio of pre-production gold claims in Ontario, including its namesake flagship open-pit gold project. The mine, scheduled to begin production in May, is expected to produce approximately 400,000 ounces of gold per year.
Source: https://www.mining.com/gold-road-seeks-stake-in-greenstone-gold-mines/
See also: https://www.mining-technology.com/news/gold-road-eyes-stake-greenstone/
The Money of Mine (MoM) lads covered this very well on their show on Monday:
And, yeah, nah, I'm out.
Plenty of good management teams doing more sensible things in the Aussie Gold Sector at this point in time, and I'm invested in a few of them, so don't see any reason to remain in this one any longer.
This year we have begun to align our reporting with the International Financial Reporting Standards (IFRS) S1 and IFRS S2, the new sustainability reporting standards issued in 2023 by the International Sustainability Standards Board (ISSB).
Investment portfolio market value ~$465M* Strategic 19.9% in De Grey Mining Prospective Greenfields exploration portfolio
a look bigger picture..
$US curreny Gold
Au up around historic highs..
Need to check this vs $AUD currency ..What do think?
GOR seems reasonable value.. 'GOR has dipped a little here.
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(31/3/23)
Reviewing my valuation taking into account the results released this month and considering the currently high A$ gold price and AISC which basically net off. As such I have not changed my valuation from around A$1.50 and view that it’s a trim or sell at $2.00 or more.
Valuation Adjustments:
· Listed Assets from DGO Gold take over: provided at 14.4% holding in De Grey Mining (DEG) which has been increased to 19.73% (308m shares, market value $460m). They own the Hemi gold project in the Pilbara which has similar characteristics to Gruyere. Other entities they have an interested in amount to less than $10m in market value (GMD, YRL, S3N). In total I have added A$467m to the EV to allow for this but the share dilution offsets it.
· Net Cash of A$74m - Debt free with a 150m facility undrawn.
· Unhedged as of Nov22 so full exposure to gold price.
· FY23 forecast production (attributable) 170-185koz at A$1,540-1,660 AISC. I have assumed 170koz at $1,660 AISC, they came in on the unfavorable side of range guidance for FY22 so I am taking worst in range to add some margin of safety.
· Gold price: Currently below A$3000/oz, I am assuming that the US$ gold price will rise but be partially offset by a rise in the A$ so allowed for a 4% a year appreciation in A$ gold prices. Below is a valuation table for variance in the A$ price from combined FX and US$ gold price moves.
I continue to assume a terminal value on the basis that current production will be replaced indefinitely, with exploration & allowance for development costs included in the valuation. There is probably some upside opportunity from all the current projects, but I will value it if and when it is more tangible.
It’s the only gold stock I own, so is my toe in the water for a spike in gold prices…
Disc: I own