Takeover target Gold Road retracts its figures on underground mine after suitor complains

Takeover target Gold Road has been forced to retract details about the underground potential of the jointly run Gruyere mine after a complaint was made to the ASX.

Gold Road chief executive Duncan Gibbs at the Gruyere gold mine. Picture: Getty Images

Gold Road has been forced to retract much of what it told the market about the potential value of underground mining at its flagship asset.

It’s the latest twist in a $3.3bn takeover battle with heavyweight South African suitor Gold Fields.

Perth-based Gold Road issued a retraction to the ASX on Tuesday amid in an increasingly bitter tussle with Gold Fields over the Gruyere mine in Western Australia.

It is understood the retraction came after Gold Fields raised concerns with the ASX.

Gold Road withdrew claims about the price tag for a move to underground mining at Gruyere plus an entire table with details of gold pricing, mining, costs, processing and infrastructure capital.

“Investors, potential investors or their advisers are advised to place no reliance on the retracted information for any investment decision concerning the company,” Gold Road said in a statement to the ASX on Wednesday.

Gold Road has been keen to talk up the value of underground mining at Gruyere after rejecting a $3.05-a-share takeover bid lobbed by Gold Fields last month.

The two companies are unhappy partners in the Gruyere mine, which is managed and operated by Gold Fields.

Gold Fields, which operates 10 mines around the world, including four in WA, sent Gold Road a long-awaited report on the underground potential at Gruyere late last Friday.

Gold Road used the report produce its own assessment showing the underground option could deliver Gold Road maximum production of 178,000 ounces a year over a 12-year mine life with a potential upside from more exploration. But it did not wait for Gold Fields to provide feedback before issuing an ASX release on Tuesday.

Gold Fields’ concerns, raised with the ASX, are thought to have centred on a lack of input from its suitably qualified mining experts known as “competent persons”.

The retractions issued by Gold Road on Wednesday came five days after it had to correct information on the underground mining potential in an investor presentation.

The Gold Road share price slipped back to $3.01 on Wednesday after climbing almost 4.5 per cent to a record high of $3.07 on Tuesday.

In rejecting the Gold Fields last month, Gold Road said the offer was “low ball and opportunistic”, and alleged it had been kept in the dark about the potential for underground mining at Gruyere.

The two companies have been trading barbs for the past fortnight. Gold Road offered to buy Gold Fields out of Gruyere and spoke with third parties in response to the takeover offer.

Johannesburg-listed Gold Fields maintains its indicative cash offer of $3.05 includes the potential value of underground mining.

The Gruyere partners have agreed to spend $26.4m on drilling to provide greater insight into how far the ore body extends below the existing open-pit mine, but that work won’t be finished until mid-2026.

Gold Road’s other asset is 17.3 per cent stake in De Grey Mining, which is valued at about $870m based on Northern Star’s $5bn takeover offer for De Grey.

Duncan Gibbs-led Gold Road has left its options open ahead of a De Grey shareholder vote on the Northern Star takeover next Wednesday.

Gold Fields has said it has no interest in making a rival play for De Grey and its Hemi gold project in WA’s Pilbara. Its spurned offer for Gold Road comprised a fixed portion of $2.27 a share plus a variable portion equal to the value of each shareholders’ proportion of Gold Road’s shareholding in De Grey.

Originally published as Takeover target Gold Road retracts its figures on underground mine after suitor complains