Gold Road posted a net profit after tax of $A232.5 million due to a $314.3 million gain on the sale of a 50% stake in the Gruyere project to Gold Fields, as well as an $11.9 million profit on the closure of forward sales contracts.

Diluted earnings per share equated to 26.57c.

The company finished 2016 with cash, term deposits and receivables of $434.2 million, nearly 500% up over the half.

Gold Road can comfortably fund its 50% share of the $514 million Gruyere cost, as well as $22 million on exploration this year.

Gold Road managing director and CEO Ian Murray said the first half of the year had been transformational for the company.

“The decision to partner with Gold Fields on Gruyere has not only fast‐tracked and de‐risked that low‐cost and long‐life gold deposit towards production, but also allowed us to accelerate our evaluation of the broader Yamarna tenement holding – committing $22 million to doing what we do best, greenfields exploration,” he said.

“Our strengthened balance sheet will not change Gold Road’s disciplined and systematic approach to exploration, but it will allow us to pursue multiple high‐priority targets across both our 100% owned and joint venture tenements, where we are targeting the discovery of additional standalone deposits in the current financial year.

“We have secured the dominant land position on the Yamarna Greenstone Belt as a result of our early mover status in the region, which we will fully leverage to our advantage.”

RBC Capital Markets analyst Paul Hissey said the result capped off a strong half for the company.

“We have a preference for Gold Road as an Australian based gold developer, due to its funding position, exploration upside as well as potential for the company to be included within the GDXJ index upon reweight,” he said.

Early works are underway at Gruyere with full construction to get underway shortly.

The October definitive feasibility study for Gruyere outlined a 13-year, 7.5-8.8 million tonne per annum single open pit operation producing an average of 270,000 ounces of gold per annum at all-in sustaining costs of $945 an ounce.

The project has a post-tax net present value of $305 million and an internal rate of return of 20%, using a $1500/oz gold price.

The project would generate pre-tax undiscounted free cashflow of more than $1.2 billion over its life, and has a payback period of 48 months.

Gold Fields will manage construction, with first gold due at the end of 2018 or early 2019.

Shares in Gold Road rose by nearly 2% to 52.5c.