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Why the Gold Road (ASX:GOR) share price is shooting 8% higher

The Gold Road (ASX:GOR) share price is shooting higher in morning trade, up 8%. We take a look at the ASX gold producer’s full year results.
The post Why the Gold Road (ASX:GOR) share price is shooting 8% higher appeared first on The Motley Fool Australia. –

gold share price represented by speeding golden bullet

Gold Road Resources Ltd (ASX: GOR) shares are shooting higher today after the company released its 2020 full-year results to the market this morning. At the time of writing, the Gold Road share price has leapt 8.5% to $1.15.

Let’s take a look at how the ASX gold producer has been performing. 

What did the company report?

The Gold Road share price is gaining after the company reported it had paid down all its borrowings over the financial year while generating $105 million in free cash flow.

As at 31 December 2019, Gold Road had $78.5 million in debt, which was fully repaid by 21 July 2020. The company ended the year with $126.4 million in cash and short-term deposits, up from $101.3 million year on year.

Over the course of 2020, Gold Road sold 126,434 ounces of gold, achieving revenue of $294.7 million. That’s up 291% from the $75.4 million in revenue reported for 2019.

The company reported earnings before interest, taxes, depreciation and amortisation (EBITDA) of $170.6 million compared to a $9.8 million EBITDA loss in 2019.

Gold Road reported a consolidated net profit after tax (NPAT) of $80.8 million. In 2019 NPAT was a $4.7 million loss. Earnings per share (EPS) came in at 9.2 cents, while the gold producer achieved free cash flow of $817 per ounce of production for the year.

Commenting on the full-year results, Gold Road CEO Duncan Gibbs said:

The year 2020 was Gold Road’s first full year as a producer… Following 18 months of production experience, in February 2021 we announced our 3 year outlook at Gruyere that sees the operation lifting from 258,173 ounces in 2020 to a sustainable 350,000 ounces by 2023 (100% basis).

Gruyere is a Tier-1 gold mine and we are only beginning to unlock its potential. Gruyere and Gold Road have experienced no material production impacts as a result of the COVID-19 crisis.

The company paid a maiden dividend of 1.5 cents for the half-year through to 31 December, for a half-year yield of 1.4%.

Gold Road share price snapshot

Over the past 12 months, the Gold Road share price has fallen by more than 12%. That compares to a 17% gain on the All Ordinaries Index (ASX: XAO).

With the gold price down 12% so far in 2020, year to date the Gold Road Resources share price is down nearly 18%.

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

The post Why the Gold Road (ASX:GOR) share price is shooting 8% higher appeared first on The Motley Fool Australia.

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