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Investing.com - UBS downgraded Gold Road Resources Limited (ASX:GOR) (OTC:ELKMF) from Buy to Neutral and lowered its price target to AUD3.25 from AUD3.55 following higher production costs reported in the company’s June quarter results.
Gold Road Resources produced 72.98 thousand ounces of gold during the June quarter with an average realized price of A$5,131 per ounce, according to pre-reported figures cited by UBS.
The company’s all-in sustaining costs (AISC) increased approximately A$300 per ounce to A$2,928 per ounce, significantly higher than UBS’s estimate of A$2,531 per ounce, putting the miner on track to reach the top end of its A$2,400-2,600 per ounce AISC guidance range.
Gold Road Resources is now expected to hit the lower end of its annual production guidance of 325-355 thousand ounces, continuing what UBS described as an "unenviable recent operating record."
The cost increases come as Gold Road Resources proceeds with its previously agreed acquisition scheme with Goldfields, which offers A$2.52 per share in cash plus the value of 49.3 million NST shares, with scheme documentation expected to be sent to shareholders in late August for a late September shareholder meeting.
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