It has been a year since the $621m Gruyere gold mine was opened by the WA Mines and Petroleum Minister Bill Johnston.

The Gruyere deposit in the Yamarna greenstone belt was the single largest gold discovery in WA in more than a decade.

The Tier One operation was set to produce 300,000oz of gold annually and employ 250 people over its 12-year mine life.

As the mine moves towards nameplate production in 2020, Gruyere is establishing itself as one of Australia’s largest and lowest-cost gold mining operations.

Commercial production began on October 1, 2019, with Mr Johnston officially opening the mine on December 3, 2019.

Within 12 months of operations, the site produced 230,590oz of gold at an operating cost of $1,155/oz.


The joint venture partners are now looking to ramp up production to 300,000ozpa at a throughput rate of 8.2mtpa.

A five-year mining services contract was awarded to Downer, which is now mobilising the second mining fleet in preparation for further mining activities in 2021.

A few months earlier, Downer delivered five new Komatsu 830E-5 mining trucks to the Gruyere mine, with the contractor being the first company in Australia to purchase the latest model of trucks.

Joint Venture

Gold Road Resources (ASX: GOR) discovered the Gruyere gold mine in October 2013 and is one of the largest virgin gold discoveries in Australia.

In November 2016, Gold Road signed a 50:50 joint venture (JV) with Gold Fields for $350m in cash plus a 1.5% net smelter return royalty on production over 2moz.

The JV comprises the Gruyere gold deposit and the 144km2 of exploration tenements.

The Gruyere project began construction in 2017 and was completed in 2019, with first gold delivered in the June 2019 quarter.

The total capital cost of Gruyere amounted to $610m, below the final forecast capital of $621m, of which Gold Fields paid $329m.

The transaction fully funded Gold Road for its 50% share of development.

New WA Province

Mr Johnston says the Gruyere project has opened up a new gold province in WA.

“”Gruyere is a powerful example of the value of the Exploration Incentive Scheme’s flagship Co-funded Drilling Program, a long-standing initiative that the McGowan Government continues to support,” he said.

“This project is one of about 25 discoveries that have benefited from the scheme, with other gold projects including the Tropicana East, Handpump and Dusk till Dawn gold projects.

“The Co-funded Drilling Program has offered funding to more than 940 projects since 2009, and allowed more of our State to be explored for the benefit of all Western Australians.”

About Gruyere

The Gruyere gold mine is an open pit operation located in the Yilgarn area, east-northeast of Laverton, WA.

It is a significant gold deposit and the mineral resource has been defined as 148mt, grading 1.2g/t for 6.2moz of contained gold.

Key infrastructure and facilities at the Gruyere gold mine include the 648-room Gruyere Village, the Anne Beadell borefield which supplies main water to the village, the Yeo borefield which provides water to the mine, the 198km Yamarna gas pipeline, airstrip, main access road, tailings storage facility (TSF), 45MW power plant and a 8.2mtpa capacity processing plant.

The processing plant, commissioned in mid-2019, consists of single stage crush and SABC1 circuit with pebble crushing.

Mining commenced in late 2018, commercial production was reached at the end of September 2019 and, by the end of December 2019, the mine ran at full capacity.

A total of 99,130oz of gold production was achieved in that calendar year, which was at the top end of market guidance.

While the expected mine life is 13 years, the tailings storage facility is projected to last until 2030 for all planned mining.

A ball mill motor bearing failure occurred at the restart of the Gruyere processing facility after a scheduled maintenance shutdown.

Production was impacted for seven days until 24 September this year and, due to the plant downtime, the company has cut gold production guidance from 250,000-280,000oz to 250,000-270,000oz for this year.

Additional downtime early in the September quarter was required to configure Gruyere’s milling circuit for fresh rock processing.

Gold Road Resources

Gold Road Resources started its journey in 2004 as Faulkner Resources, when geologist Russel Davis purchased the Yamarna North and South projects, including the Yamarna pastoral lease that covers the Gruyere JV.

In 2006, the company renamed itself Eleckra Mines and, in 2010, it changed to Gold Road Resources to better reflect its focus as a gold mining company.

Gold Road has taken the Gruyere project from initial discovery to first gold in under six years and the mine is a key contributor of ongoing cash flow for the company.

Gold Road Resources managing director and chief executive Duncan Gibbs says Gruyere’s first gold production in June 2019 heralded the company’s successful transition from explorer and discoverer of the world-class Gruyere deposit to becoming a mid-tier Australian gold producer with significant potential and growth ambitions.

“By the end of 2019, Gruyere had produced 99,130oz at an AISC of $1100/oz attributable, both comfortably and in line with guidance,” he said.

“It was a dedicated collective team effort to achieve Gruyere’s start-up in line with our targets and with exemplary construction safety performance.

“Despite a short delay in the commissioning of the ball mill, the start-up of the operation has gone well and surpassed our expectations in the ramp-up of the process plant.

“Gruyere will be a long-life and high-margin operation, setting Gold Road up for a bright future.”

Gold Road expects to complete a mine pit design projection for increased ore reserves at Gruyere by early 2022.

Gold Fields

Gold Fields is a globally diversified gold producer, with more than nine operating mines in Australia, Peru, South Africa and West Africa, producing a total of 914koz of gold in 2019.

Within Australia, its 3000-strong workforce, comprising almost equal numbers of employees and contractors, operates four mines in WA: the Agnew, Granny Smith and St Ives gold mines, as well as the Gruyere 50:50 JV with Gold Road Resources.

Gold Fields, experienced in the development and operation of open-pit gold mines, was appointed the manager of the Gruyere gold mine.

Gold Fields chief executive Nick Holland says he believes the company was counter-cyclical by spending almost US$1bn on new projects between 2017 and 2019.

“Unlike our peers, who have been more focused on mergers and acquisitions, we have been focused internally, building two new mines – Gruyere and Damang – and taking a greenfield project – Salares Norte to a construction decision,” he said.

“Our portfolio is now in a strong position to maintain production of 2.0-2.5mozpa for the next 10 years.

“In our view, this is the optimal production level given that each year we need to find almost 5moz in new mineral resources to replace depletion, assuming a 50% resource to reserve conversion rate.

“In addition, we believe that a portfolio of no more than 10 mines is the optimal number allowing management to properly focus on operations.”

Community Partnerships

Gruyere has a comprehensive Native Title Agreement with the traditional owners of the land on which the operations are located.

It is the first operating mine on Yilka country.

A key focus of the Gruyere JV is working with the Yilka people to provide employment and develop and deliver career pathways for the local community.

Key contracts including those focused on major plant, minor plant, labour hire and cleaning services have been awarded to indigenous enterprises.