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Greatland Gold plc (AIM:GGP) has published the Stage 1 Pre-Feasibility Study results for its Havieron gold-copper deposit in the Paterson region of Western Australia. This Stage 1 Study of the South-East Crescent reflects what Greatland Gold calls the ‘staged approach’ to the evaluation and development of Havieron and does not consider bulk mining methods.

Greatland Gold said the economics of the maiden PFS support the total capex while generating strong early cash flow.. It requires low upfront capital, with Greatland Gold’s share coming to US$73m. Some 17% of revenues are estimated to be generated from copper production.

Shaun Day, Chief Executive Officer of Greatland Gold plc, said: “This maiden Pre-Feasibility Study focuses on the South-East Crescent and should be viewed as the first stage. The study covers just a small fraction of the resource and the broader mineralised breccia system but is a tremendous first step towards creating a mine and unlocking our understanding and the value of Havieron.”

Havieron has been confirmed as a world class ore body, and is being developed with a Tier 1 partner in Newcrest and all within a Tier 1 mining jurisdiction of Western Australia.

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Shares in Greatland Gold had seen a brief rally earlier this month – stock rose from 15p to peak just above 21p before falling again ahead of this announcement. Shares were trading at 18.34p at time of writing.

Modest capex hurdle for Greatland Gold

The Stage 1 Study indicates a very modest capex hurdle for Greatland and thereafter the generation of cash flow. This provides the opportunity for the gold explorer to reinvest this cash flow into Havieron so that it can self-fund the full potential of the site. This capital profile is positive for Greatland as a mid-cap miner.

The quality of Havieron is observable in the AISC of just US$643/oz Au. This outcome could propel Greatland to the second lowest cost producer globally, with this low cost structure driving a high-margin, high IRR and fast pay-back development.

A further 90,000 meters of growth drilling is planned to June 2022, to better understand the extent of the South East Crescent, the Northern Breccia and the recently identified Eastern Breccia. This growth drilling creates the opportunity to potentially apply bulk mining methods to the balance of the Havieron breccia system to complement the mining of the South East Crescent.

Potential to expand project and mining rate

Greatland Gold now has the potential to expand the project and increase the mining rate to 3Mtpa or more through the conversion of Inferred to Indicated mineral Resources through an infill drilling program. There is also scope to lower mining costs by considering alternative, higher production rate, mining methods. Ongoing growth drilling continues to show potential for resource additions outside of the existing Inferred Mineral Resource boundaries.

The Stage 1 Study considers only the Indicated mineral resource, reflecting only a small portion of the existing resource inventory. The Havieron Project has significant additional growth potential, including: mineralisation open at depth and along strike and the extension of the South East Crescent Zone below the current mineral resource, where increasing grade and thickness of mineralisation has been observed in recent drilling Greatland Gold says it is also looking at the expansion of multiple higher-grade targets within the main Havieron north west corridor.

In addition to the active testing of the above higher-grade targets, drilling continues in the northern and eastern breccia corridors to assess the bulk mining potential.

If you are a sophisticated mining investor interested in The Armchair Trader’s private mining events, where you can meet mining CEOs, please register your interest with our events team by emailing brian@thearmchairtrader.com

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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A date for your diary

On the 21st of October, Stuart Fieldhouse will be joining Sarah Lowther and Mark Watson-Mitchell to discuss which small cap investments they like the look of and, perhaps, which ones they do not. It promises to be a lively and insightful discussion. If you are interested in investing in small cap stocks then this could be a profitable use of your time. We hope you can make it! Sign up now

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