Greatland Gold LON:GGP has confirmed the completion of the acquisition of 70% of Newmont’s NYSE:NEM ownership in the Havieron gold-copper project, all of Newmont’s ownership of the Telfer gold-copper mine, plus further related interests in the Paterson region in Australia.
Shares in Greatland Gold are up 24.9% over the last month having rallied off a floor of 5.15p in mid-November. The stock is quickly approaching the recent 8.64p high it achieved on 20 May.
Greatland Gold described the acquisition of Havieron and Telfer as “a highly accretive and strategically compelling transaction that has the potential to deliver material value to Greatland’s shareholders.”
Greatland Gold’s Greatland Managing Director, Shaun Day called the completion of the deal a watershed moment for the miner: “Greatland’s discovery of the world class Havieron orebody in 2018 established our platform for growth. Returning to 100% ownership of Havieron now gives us the opportunity and control to deliver the project’s full potential. We have a defined pathway for Havieron to become a low-cost long life gold-copper asset of significant scale.”
Telfer is an iconic Australian mine that immediately transforms Greatland Gold into a significant producer of gold and copper, with a defined mine plan that is materially de-risked by substantial ore stockpiles, and significant mine life extension prospects.
Day said that Telfer production is expected to generate significant free cash flow, which he expects will help to self-fund the completion of Havieron’s development. Combining Havieron and Telfer under Greatland Gold’s single ownership provides the opportunity to operate efficiently and deliver a platform for continued growth and an opportunity to create value for shareholders.
Greatland Gold’s Telfer mine project
Telfer is a substantial operating gold-copper mine that is expected to generate significant near-term cash flow. Greatland Gold will benefit from an estimated c.11.5Mt of run-of-mine ore stockpiles that have already been mined, significantly de-risking and reducing the costs of Greatland’s initial Telfer production. A further estimated c.20Mt of low grade stockpiles are also available.
An independently reviewed initial Telfer mine plan pointed to total estimated production of 426koz gold equivalent at an estimated AISC of US$1,454/oz (net of by-product credits) over 15 months from the restart of processing operations at Telfer (which occurred in late September under Newmont’s ownership). Greatland Gold said it expects to provide production and cost guidance for FY25 following its first complete quarter of ownership and operation.
In parallel to executing the initial Telfer mine plan, a number of additional potential Telfer ore sources have already been drill tested and will be assessed with a view to extending the current Telfer mine plan. Greatland Gold said it will conduct a Telfer-wide review of all mineralisation and stockpiles to produce an updated Telfer Mineral Resource estimate in accordance with the JORC Code, targeted to be completed in the March quarter of 2025. Further high priority mine life extension opportunities at Telfer will be drill tested.
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Havieron: world class copper-gold project
Havieron is a world class gold-copper project with a Mineral Resource estimate of 8.4Moz gold equivalent metal content. The independently reviewed base case estimates a 2.8Mtpa mining operation with average annual production of 258koz gold equivalent at a lowest quartile all-in sustaining cost (AISC) globally of US$818/oz in steady state (first 15 years, net of by-product credits), with a 20-year total mine life.
The case for Greatland Gold’s full ownership
Ownership of the Telfer infrastructure substantially de-risks Havieron’s development and provides expansion optionality. With 100% ownership of the target assets, Greatland Gold has the opportunity to optimise and develop an integrated Telfer-Havieron mining and processing operation.
Greatland Gold also confirmed that 435 Telfer employees have accepted offers of employment with the miner, an acceptance rate of over 98%, securing the transfer of a significant and highly skilled workforce, and preserving the existing capability, expertise and knowledge to enable continuity of efficient operations.
Further update on the financials from Greatland Gold
Greatland Gold has entered into a A$100 million syndicated debt facility agreement with its leading Australian and international banking syndicate composed of ANZ, HSBC and ING, including a A$75 million revolving working capital facility that matures on 1 December 2025. Together with the equity funded working capital successfully raised for the acquisition, the facility provides important liquidity and financial flexibility for Greatland Gold’s working capital requirements for the operation of Telfer.
Greatland Gold has a non-binding letter of support for A$750 million in proposed banking facilities for the development of Havieron, with ANZ, HSBC and ING Bank. Combined with equity funded working capital and expected cash flow generation from Telfer, the miner told investors it “expects there is a clear and non-dilutive pathway to the Havieron development being fully funded.”
Newmont’s shareholding in Greatland Gold
Newmont is Greatland Gold’s largest shareholder with 20.4% of shares on issue. Newmont’s shareholding is subject to an initial 12 month voluntary lock-in, a further 12 month orderly market arrangement, and a relationship agreement. Up to US$100 million of the acquisition cash consideration is being deferred until Havieron commences commercial production and is also subject to a gold price hurdle.
Realisation of any deferred cash consideration is linked to a successful operational scenario, demonstrating Newmont’s support of Greatland Gold’s stewardship of Havieron and Telfer.
Greatland management said that there are “significant upside opportunities” as a result of the acquisition, including potential extension of the current Telfer mine plan, optimisation of Havieron throughput potential and Telfer processing capacity, supplementation of Havieron ore with Telfer ore,plus a potential regional ‘hub & spoke’ strategy enabled by Telfer infrastructure.
Greatland Gold to pursue listing on ASX in 2025
Greatland Gold’s operating strategy is to renew and develop an integrated Telfer-Havieron mining and processing operation, to create a generational Australian gold-copper mining complex. As a significant Australian gold-copper producer and developer, the company said it consider a listing on the Australian Securities Exchange (ASX) to be “a natural and compelling step for the group.” An ASX listing is targeted in the June quarter 2025, following which the group would be dual listed on both ASX and AIM.
