Notes from Sunday Roast Podcast - 29 OCT 2023

[DipSard]

Notes from Sunday Roast Podcast - 29 OCT 2023

Interview Link:
27 minutes in for Shaun
https://audioboom.com/posts/8391830-sun ... aterian-sh

GGP RNS’s:
https://greatlandgold.com/investors/regulatory-news/

* More detail on the update on Havieron and news on the decline development?
- Really BAU and people will understand to get to the bottom of the ore body we go through 3 aquifers
- Already gone through the upper and lower aquifer, now at the lower aquifer and pattern of dealing with the aquifer is exactly the same
- To put into context aquifers are not open bodies of water, just areas where the rocks are more porous so you have some water generation or some water flow and the reason we call it a contained aquifer (Lower Contained Aquifer, LCA) is this is not linked to the ocean, not an endless stream of water
- It’s a body of water, it’s a contained volume and effectively at some stage runs out
- What we did as we go through each of them, we first put in the depressurisation holes so think of this as if you drill into a pipe in the wall, the water will initially be under pressure and come out really fast
- That would be dangerous if you had a human standing next to it, so you stand off it, drill into it and depressurise those holes then you’ll dewater and also put in greater diameter holes where you can put little pumps down and then you’ll pump out the water
- As we’ve done with the upper and middle aquifer the upper still flows, we still do that pumping, have pumps to keep up with it and keep the mine dry and the middle aquifer was a really small body and that’s really modest now
- This will be the same, you put in enough pumps to keep up to make sure you can manage that water and then you can mine through it in a dry sense
- What we’ve done is repurpose some of the teams to do the ventilation raise bores, that’s a really important aspect of getting the mine plan into place
- So, really we’ve re-sequenced things, we’re probably pushed back a little bit of time here and that’s just a risk management and honestly that’s just say a quarter, that’s just a speed bump in the way we’ve gone about this expedited development of Havieron.

* Overall, when do you perceive after the aquifer is sorted out that you will hit the top of the ore body?
- Would like to see what the flow rates are before we’re definitive about this but kind of given that guidance around the feasibility study (DFS) at the end of the September quarter which will allow us to understand that, allow us to have probably have driven through that area so we can bring that data all into the DFS
- So without being definitive I think that is how I think about it and certainly that will give us enough time to finish the raise bores in parallel with doing the dewatering and really they are the remaining risks
- You’re then into the basement rock which is really competent, dry material so we think this is the last really significant derisking event so what we’re going through now
- This is normally what you do with any mine aquifers and the flow of water generation in Australia under cover is virtually universal.

*What is the greatest… what is the largest risk that could cause the whole thing not to happen or is it just a case of something has to be rectified?
- This is where having the great global major as a partner is, there risk management processes we think are first rate, we like to think we would have the same but there’s no question NCM and now NEM approach these things in a tremendous way
- And we wholeheartedly agree with last week’s decision at the JV meeting at which both groups agreed upon this course of action
- To stand off at a safe distance, to do the depressurisation and to do the dewatering again is text book is what we did with the two previous aquifers and what we’ll do at the LCA
- So we’re really comfortable, what you want to avoid is tapping into a unknown aquifer under pressure and that is a risk so what we’ve done is say look the decline’s almost progressing too quickly
- We haven’t had time to fully dewater it, let’s just pause, focus on the ventilation structures and then we can then drive into that area when we’ve got it suitable derisked
- This is best practice, worse thing you could do is have a uncontrolled ingress of water into the mine, this effectively guarantees that doesn’t happen, it’s good risk management, it’s good mine planning, it’s good management.

* So, you mentioned the takeover by NEM, what is the timing of this and how might it affect you do you think?
- The shareholder votes, scheme approvals etc. at NCM and NEM are done and all in place and would describe it as procedural now and the implementation date is the 6th November
- That’s when Newmont takes the keys, we’re still dealing with NCM and still our JV partner until the 6th of November but for all intense purposes I think people can consider (and I think you’ve seen it in how the markets reacted) we’ve got through that uncertainty and we now know NEM becomes our JV partner in a few days’ time.

* All of those people working today for NCM will in a few days’ time working for NEM and probably the personnel’s not going to change that much at mine level very much at all?
- One of the things we used to say on the sites was you change your shirt, the same team working at Havieron, Telfer and other NCM assets like Cadia will all be working there the next day
- These type of corporate mergers or takeovers tend not to have too much effect on the site teams, one day you’re working with a NCM brand on your chest pocket, the next day it's a NEM brand
- But you’re absolutely right that same team will be there, no doubt NEM’s a bigger company, it has a more bigger, technical capability, that team will be augmented in terms of that overview of Havieron and we’re looking forward to that
- In fact their technical office here in Australia is literally in the building next door to us here, which is serendipitous, looking forward to that team rolling up their sleeves and bring a whole fresh new perspective to unlock the full potential of Havieron
- But this is good, this is really good.

* So, Shaun, just give us a timeline of what we thinks going to happen on Havieron?
- The timelines are largely unchanged, we’ll be getting down to the top of the ore body in calendar 2024, that works out from about June 2024 into that 2nd half and then we should still be on track to set up the stopes and the development levels so that we can achieve first ore in 2025
- Albeit I think people should be very focused on when the DFS is released which will be definitive around that but given where we are, we have some reasonably clear visibility on the opportunity to kind of push through into that basement rock conditions and access the ore body.

* And just on a broader note for GGP, what are the other things in the portfolio that’s getting you excited about the future in terms of what you can produce?
- There’s 3 elements that we’re really excited about
- Let’s talk about the exploration, being able now to tap into that South Paterson, continuing the Geophysical interpretation and continuing to think about what we’re going to drill in the new calendar year is exciting
- Ernest Giles is something we’re still something we’re very focused to achieve this year, we still need heritage clearance and other things to be completed to finalise the access but we’ve guided from the start of the year that we’d like to get the drilling done before the end of November and we still think that’s achievable, with every day that passes that’s a more ambitious goal but we are super excited about that ground
- The geophysics that we already have there is exceptional, it’s another great address to drill or another great postcode to be in so that couldn’t be better from an exploration POV and that builds on the Scallywag and all the ground we have along strike from Havieron and indeed Telfer now
- Moving onto the mine, just a huge number of derisking events, we update the MRE, we finish the ventilation and we deal with the LCA, we get to the top of the ore body, we start setting up our first stopes and access levels are all tremendously exciting and tremendously important milestones plus the DFS as well in that timeframe
- So, a busy period ahead of us but all of those unlock value and then we have the platform and the platform gives us the opportunity to keep looking at what can we do to enhance our platform
- We’re active managers of our portfolio and you’ve seen that in our moving some tenements out that we weren’t active on, bringing some in that we have immediately been active on and we continue to think about how we can leverage this space, leverage our position in the Paterson but also more widely the GGP platform
- Our ambitions are unchanged in terms of creating a multi mine, multibillion dollar platform.

* And Havieron itself, do you sort of envisage that it’s going to expand its ounces available within the mine as you move forward?
- Well there’s two elements, I think your phrase there was ‘ounces available’, absolutely we have a 6.5Moz JORC resource presently, we are updating that, we seek to release that in this December quarter
- It will be late in this quarter, I think we previously guided that we do want to have that externally reviewed by an independent and we’re going to share that with our JV partner that I think I can now call NEM
- So, that will take time and we want to be courteous around that but fundamentally we remain focused and on track on seeking to share that with shareholders this year
- We’ve had to do it unilaterally because you know NCM didn’t have the opportunity to update that as they intended
- In terms of the production profile, just to remind people the PFS had a 2mtpa production profile, without being definitive we’re seeking to move that to 3mtpa in the DFS, that’s say a 50% increase
- So, that is certainly exciting and then we’re looking to understand how we can unlock the value of the Easter and Northern breccia’s in more bulk or larger scale mining operations
- So there is lots to do and with a 15 plus year mine life already on that SE Crescent there is a lot of opportunity to unlock value as we move into the ore body.

* Do you think you’re going to be showing your grandkids this mine in the future?
- Yeah I do, I think this mine life certainly has the opportunity to double
- If you look at where I’m out of at Northern Star, we bought a series of assets with short life and eight years later all of them are still in production and all of them have kind of plus 5 year mine life in front of them, of those assets we bought in 2015 that I think was 5 assets
- Underground mines, one of the lovely things about underground mines is that they tend to continue on
- The gold came from underneath not from above, with open pits you tend to drill them out from surfaces, you know your pit shell, you can do cutbacks, but with undergrounds always the opportunity to follow the seams to follow the intrusive zonation and to continue to add mine life
- And when you’ve already got your infrastructure in place, bringing in that incremental material often remains economic
- So, I think Havieron will certainly see me off and we’ll see how we get on with the grandkids but that’s a little while away but has every opportunity for them to see it.

* Just as a last question, what’s your thoughts on the gold price, we’ve seen gold really pop up in the last 10 days I suppose moving up well over $100 USD?
- I think there’s a number of factors that are helpful for gold in the short and medium term
- In the short term you’ve got a series of military conflicts around the world
- I still think most notably Ukraine that’s still an ongoing military engagement on continental Europe
- You’ve then got the Middle East presently which is a humanitarian disaster and there’s really no winners from that conflict and that’s a really sad thing but that geopolitical uncertainty as you see there’s often a flight to safety and gold in those kind of circumstances
- In a more broader economic sense what you’re seeing is inflation starting to come down, that puts downward pressure in real inflation rates I.e. the gap between inflation and interest rates you’ve seen the interest rates go up
- And gold is a fantastic store of value against inflation and I think what I’ve seen from some of the tables if you’d bought gold in 1900 or just about any time between now and then or bought shares or put money in the bank
- Gold has been one of the best performing assets over a hundred year or over a 50 year timeframe, it keeps up with the store of wealth
- So, we think as that short term inflationary pressure comes out of the system and real differentials get reduced or real inflation gets reduced by the negative draws of high interest rates and lower inflation rates then gold becomes a really good commodity and you’re just seeing more and more portfolio’s add gold to it
- And don’t forget we have the absolute luxury of having 20-25% copper, we love that’s an electrification of the world and we love diversification
- It is a great feature of Havieron that we’re spoilt with both gold and copper.

* The AISC of Havieron, obviously you’re doing the DFS at the minute so without giving too much away what are we talking about in terms of AISC either from the previous study or what you intend to use from this one?
- The study really determines that, all the output of the study is that your AISC as oppose to being an input you really want to build that up as part of the study from first principles so that was $643 per ounce in the PFS
- That’s about 2 years old or thereabouts now so I think we have to recognise that there’s some inflationary pressure on that over the last 2 years, we just talked about the impact of inflation but precisely the same inflation that we’ve seen across the sector
- So, we were lowest quartile producer, one of the bottom 3 lowest cost gold assets in Australia, I would have though our relative position remain very similar
- Although there is some inflationary upward pressure there is also the benefit from moving from 2mtpa to 3mtpa and the economies of scale from that
- So, it’s hard for me to pre-empt the DFS and ultimately that will be the deterministic outcome but we certainly feel confident that there’s no Havieron specific changes that knock us out of that lowest quartile position which is where everyone dreams of being
- And we have a mine that should be in that lowest quartile position which creates especially at today’s gold price… and shareholders should also keep an eye not just on the USD gold price but the AUD gold price which is in excess of $3000 AUD an ounce
- Which is tremendous because you’ve got a high gold price and a low AUD so gold in Australia looks incredibly attractive
- Because our cost structure will be Australian that will drive our margin so for us I think we’re in a tremendous place, we’re looking forward to getting into production and actually translate that competitive advantage into cash flow.

Interview ends with some casual chat about who was going to win the Rugby world cup final etc.

Download Link
https://www.mediafire.com/file/qixrcct6 ... 3.pdf/file