• Gold Production: 287,000 ounces produced in 2024.
• Cash and Equivalents: $174 million at year-end 2024.
• Investments Value: $724 million at year-end 2024, increasing to $870 million as of the call date.
• Revenue Growth: 50% increase in the second half of 2024 compared to the first half.
• Free Cash Flow: Increased by $100 million in the second half of 2024.
• EBITDA and Net Profit After Tax: More than doubled in the second half of 2024.
• Net Profit After Tax Growth: 23% increase from 2023 to 2024.
• EPS: $0.09 per share in 2024, more than 4 times higher than in 2021.
• Dividend: $0.015 per share, representing 25% of free cash flow for 2024.
• Ore Reserves: Increased to 43 million tonnes at 1.39 grams per tonne for 1.92 million ounces.
• Mineral Resource: Increased to 4.81 million ounces, a 6% increase.

• Warning! GuruFocus has detected 8 Warning Signs with SBSW.

Release Date: February 21, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Gold Road Resources Ltd (ELKMF) reported a strong year of performance with 287,000 ounces of gold produced, nearly meeting revised guidance despite early-year disruptions.
• The company ended 2024 with a robust financial position, holding $174 million in cash and equivalents and maintaining a debt-free balance sheet.
• Investments were valued at $870 million, representing an unrealized gain of around $450 million, more than doubling the initial investment.
• EBITDA and earnings per share showed significant growth, with EBITDA hitting a record $200 million in the second half of 2024.
• Gold Road Resources Ltd (ELKMF) demonstrated strong ESG performance, being recognized in the Dow Jones Sustainability Index and Standard & Poor's Sustainability Yearbook.

Negative Points

• Cash flow and nominal dividends for the year-end 2024 were not as strong as in 2023, partly due to weather-related disruptions in the first half.
• Corporate costs increased year on year due to one-off costs associated with an M&A process.
• The company faced a negative cash flow outcome in the first half of 2024 due to a rain event, although it bounced back in the second half.
• There is uncertainty regarding the potential tax implications of the company's investments, particularly concerning unrealized gains.
• The dividend payout was maintained at a level similar to the prior year, reflecting the overall cash flow for the full year, which may not meet some investors' expectations for higher returns.

Q & A Highlights

Q: Can you explain the significant increase in depreciation and amortization (D&A) in the second half of 2024 and what should be expected for 2025? A: John Mullumby, CFO: The increase in D&A is primarily due to higher material movement in the pit, which affects our mine development costs. We amortize these costs over the life of the stage of the pit rather than the life of the mine. For 2025, expect D&A to increase as total material movement is projected to rise.

Q: What is the total budget for exploration in 2025, and are there any other significant capital expenditures to be aware of? A: Duncan Roderick Gibbs, CEO: The exploration budget is $34 million, with $15 million allocated to Gruyere, focusing on deep drilling below the pit. Other capital expenditures were discussed in the quarterly call, but the primary focus is on exploration.

Q: Regarding the De Grey investment, what are the potential tax implications if the deal with Northern Star finalizes? A: Duncan Roderick Gibbs, CEO: If we accept Northern Star shares, it would not trigger a tax event immediately due to rollover relief. However, selling those shares in the future would trigger a tax event. We are not preempting any decisions regarding dividends or shareholder returns until the situation is clearer.

Q: Can you clarify the increase in the noncurrent deferred tax liability and its relation to unrealized gains? A: John Mullumby, CFO: The deferred tax liability is influenced by differences in depreciation and amortization between tax and accounting, as well as unrealized gains from the revaluation of financial assets. The unrealized gain on our De Grey shares contributes to this liability.

Q: What factors would lead to a higher dividend payout in the future? A: Duncan Roderick Gibbs, CEO: The Board exercised discretion in the first half to pay a dividend outside of policy due to cash flow impacts from the rain event. Future dividend decisions will consider the resolution of the De Grey situation and overall cash flow performance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.