AGM 2022
shareholder q&a

What are you doing with your $130M cash? Why do you pay out only 15%-30% of free cash flow in dividends and then issue shares via a dividend reinvestment plan?

Why do you need a $250 million debt facility with all that cash and paying limited dividends? Seems like some rainy day.

Gold Road successfully became a dividend payer within 18 months of first gold production at Gruyere. Very few companies (none that I know of) have achieved this milestone so quickly.

Our dividend policy, is based on 15% to 30% of FCF, subject to maintaining $100m in cash.  It is prudent the board maintains adequate cash reserves, so the business can confidently operate as a going concern and shareholders wealth is not impacted by events such as emergency equity or debt financing.
The payment of future dividends will be in alignment with the dividend policy.

The dividend reinvestment plan provides an option for shareholders to increase their investment in the company, without the payment of brokerage fees.
Our dividend policy was carefully and thoughtfully established given our unique circumstances.

Specifically, under normal circumstances, Gold Road is a solid cash generator. However, Gold Road has a single operation, single commodity company, and is operating in a very volatile global context. This gives rise to risks, which the Board must manage and to opportunities, which the Board must position the Company to seize as they become available. In fact, the major distinguishing feature between winning and losing resources companies is the Board’s ability to consistently manage the many risks and to seize opportunities as they are presented.

It is therefore important for the Board to have a cash reserve to manage for the survival of the company in extreme downside scenarios and to grow the company by taking advantage of opportunities as they are presented.

The Gold Road debt facilities, which are undrawn, were initially established to support the financing of Gruyere and to provide the capacity and optionality to consider growth opportunities in an agile manner.

Given the stronger balance sheet that the company now holds, the future requirements for debt facilities will be considered based on the circumstances at the time, as these facilities reach maturity.

That said, these facilities represent an excellent fallback to tide us through almost every possible scenario that we could envisage in the future.


Exploration hasn’t delivered. Yet the exploration budget continues to grow – from $22 million in 2017 to $33 million in 2021 and now 2022. Is the budget going to get even bigger with acquisition of DGO?
How does the Board justify increasing exploration expenditure at the cost of dividends when it has failed to deliver in the last 5 years? The dividend has gone down from 1.5c per share to 0.5c per share.

Exploration at Gruyere has delivered Reserve growth of greater than 1Moz.

We have successfully reported 0.5 Moz in new resources from Gilmour, Smokebush & Warbler. These additions more than cover our exploration investment, while we search for the big discovery.

So we consider exploration has been successful for the company, acknowledging that we have yet to discover “Mine 2” which would create the biggest up lift in shareholder value.

Yamarna is a very large tenement package that has had very little modern exploration to date, and is almost completely covered by desert sands. While strategically that is an opportunity that most companies don’t have, it also means we have had to build the early stage datasets during the last few years, with the work now moving to a greater component of deeper RC and diamond drilling, which is the phase of work that leads to discoveries.
It is possible to get an ‘early win’ in exploration, but success is usually underpinned by multiple years of systematic work.

The primary asset in DGO Gold is the equity position in De Grey. That equity position provides a “seat at the table” in future options associated with the development of the Hemi discovery, which may ultimately lead to requirements in various forms, for funding by Gold Road.
The exploration assets held by DGO are substantial and have value which Gold Road will seek to maximise.

Given my comments I don’t see the DGO acquisition as translating to increases to the total Gold Road exploration budget. We will look at the priorities according to the best exploration opportunities.

The lower most recent dividend is in line with and in fact slightly above the Dividend policy of 15 to 30% of free cash flow, and primarily reflects lower cash generation at Gruyere reflecting operational issues associated with the ball mill during the year.

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