Notes from AIM ON-AIR Q3 Update with Shaun Day - November 13th 2023

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Notes from AIM ON-AIR Q3 Update with Shaun Day - November 13th 2023

Interview Link:
https://youtu.be/dlh3HS62IqY

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

Shaun Day joins Liam again for a Quarterly Review, of the RNS news item(s):

“Newmont – Newcrest takeover – Progress Update”
“Greatland presents at Denver Gold Forum”
“Grant of Employee Incentive Options”
“Ernest Giles Land Access Agreement”
“Havieron Quarterly Update”

The production is not paid for by the company featured, and relies on “coffee” donations, You can Buy a coffee or become a member here.
https://www.buymeacoffee.com/ggphelp

[Rough Transcript taken from AI, has not been tidied up.]

Transcript:

Liam

It’s the 9th of November 2023 and you’re watching Aim On Air, a specialised in connecting companies with shareholders. It’s what we do best.

Liam

Hello and welcome back to Aim On Air. My name is Liam. Today I’m pleased to be hosting Shaun Day, Managing Director from Greatland, for a Q3 quarterly catch up. Welcome back to the show, Shaun.

Shaun

Thanks, Liam. And thanks for having me on Aim On Air again.

Liam

Not a problem, Shaun. It’s always a pleasure. For our icebreaker today, I wanted to go back a couple of years to when you were a teenager. Simon wonders if you had a particular computer game or TV show that sticks out in your mind as a memory of your youth?

Shaun

Well, zero computer games. We weren’t allowed them in the home, so that’s not a memory for me. I remember going to other friends’ houses and playing them and they were a treat. Look, to be honest, I was a big reader of non -fiction books, so that’s really… and my dad lectured in history. So really it was growing up around history books. So things like Pax Britannica, Rise and Fall of the Greek Empire, they were the books I, you know, that’s what I kind of grew up doing, which might not sound that exciting, but that was our household.

Liam

That makes sense, that’s fine, thank you. Okay, so we’re here today for our third quarter catch up for 2023, and we’re a bit out of sync with the traditional calendar months. But before I look back, I wondered at the start of this week, Newmont completed its takeover ownership of Newcrest Mining. I wondered if you had a few words now that the market is certain who our JV partner is going forward.

Shaun

Oh, yeah, we’re we’re wrapped to bring Newmont into the joint venture. I think operationally they have, you know, a tremendous reputation. Culturally, again, led by Tom Palmer. I think they’re thought of, you know, very highly as a, well, not just as an operating team, but as a group of people, I think culturally we’re a lot more aligned with Newmont. So we feel really, really good about that. And, you know, and thirdly, they’re the world’s largest gold miner. So the fact that we fit in their portfolio is a credit to the Havieron Discovery. So we’re wrapped to have them in and plus, look, it is a fresh set of eyes. I think they can bring in more value. I think they call it the full potential review. I think they are, again, a really well -respected technical team at this. So everyone will benefit greatly from that full potential review and, you know, what they can do to even more enhance the project.

Liam

Okay, that’s great. Thank you. So majority of the news items from the previous quarter come from a flurry of RNSs between the 8th and the 20th of September. Some of these I’ll not cover as they’ve since been superseded, but we should touch on each part of them to bring everybody up to date to the end of October. First up is the RNS on the 8th of September titled Newmont Newcrest Takeover. Grant Samuel produced an independent assessment of the Havieron project using its own assumptions. You and the team have had more time to digest this information and understand its nuances. Do you continue to find it frustrating that the real story of Havieron is still clouded secrecy for want of a better word or are you just concentrating on the things that you can deliver?

Shaun

Yeah, thanks for the question Liam. We do just focus on what we can deliver and we’re really comfortable with the successes we’ve had over the last 18 months in particular. In terms of the AMC or the Independent Expert Report, look, we understand that. We’ve kind of gone through it in some detail, as you would imagine. I think people should understand that represents 70 % of Havieron plus 100 % of Telfer. It doesn’t delineate the two values, but I think it’s arguable that Telfer, including its rehab liability, is actually a negative in that equation. So I think it does perhaps start to suggest what Havieron can be, and people should also understand that independent experts are what you can prove, not what you know. So they are a subset of your expectation of the asset and typically have, you know, relatively conservative assumptions in them because again, it’s about a public facing technical review of an asset and obviously when technical teams of doing that, they’re really focused on not overestimating what can be achieved. So we actually thought it was a step in the right direction.

Liam

That’s grand. Thank you. You then travelled around the world for a flurry of presentations and meetings with both institutions, investment companies and private investors. Were there any highlights for you as you travelled around the globe?

Shaun

Yeah. Look, it’s always good to get out and meet with shareholders. I was able to do a town hall meeting when I was in London, which I really enjoy and hopefully the people who come along enjoy and find informative and engaging. Certainly I appreciate people turning up to that and I always try to run over and have a sandwich with them afterwards so people have additional time to ask me questions because it’s just great being involved in a company that people are so engaged with. So the highlight for me, you asked, is always engaging, particularly with the town hall and the retail investment base. Having said that, the other highlight I think is the increased institutional engagement. To get an institution to come on as a shareholder can often take three, four, five meetings is not unusual. And I think that’s starting to bear fruit. I think every time we do a trip, we seem to get another couple of institutional investors buying in. Really from a zero base, it’s getting up towards a third of the share register and I really celebrate that. I think it’s great that we still have this tremendously strong retail base, but we’re bringing institutional demand in. I think over time, we think that that helps build share price but also reduce volatility, particularly downward volatility because institutions will typically buy on value. So it’s a bit of a slow burn to build up that institutional profile and engagement, but we feel it’s been successful and will continue to be.

Liam

That’s brilliant. Thank you very much. Midway through September, you announced that our cornerstone investor, Wyloo Metals, had entered into a loan agreement with Greatland to provide 26 million pound or 50 million Aussie dollar standby loan. Given it’s cost the company 1 .5 million Aussie dollars already, do you have any plans to use this or is this something that’s there just in case?

Shaun

Look, a bit of both really. We think having sufficient liquidity to pay the calls of the joint venture is our highest priority. We obviously don’t want any unplanned dilution. So having contingency there we think is a really important de -risking event for shareholders. We also think it hopefully kind of removed, I think now incorrect, speculation that we were going to raise equity. So those were the dual intent, one to create a platform where the share price could recover because there was no longer speculation that we’re raising equity and secondly risk management. So, you know, we ultimately think we have sufficient funds to pay the cash goals of the joint venture. So, in truth, we don’t expect to draw that the Wyloo facility. Having said that, it is available there for us. So, it is available should the need arise.

Liam

That’s fair enough. Thank you. With that came the deferring of the ASX listing. You’ve been working on this for a year, which must be disappointing in some ways. Is it something that can be activated again quickly or is there gonna be a lengthy progress that needs to be started all over again?

Shaun

No, look, we’ve done a lot of the homework for it, so to speak, so I think the progress we’ve made is, you know, stays, remains current and actionable. Again, we didn’t want to do an ASX listing at a point in time when we felt there was, you know, share price weakness. So this really allows us to have that ready to go, have a lot of the work in hand, having engaged with the ASX and now we can sit back and think about the best timing and our guidance for that is that we’ll think about it at the right time in 2024 but we don’t want to put a time frame on that, we don’t want to create speculation around that, we just think we’ve done the work, we’re ready to go and now we can just optimise it for shareholders And particularly for existing shareholders, and I think that’s what I was really trying to convey with that, is that our primary thought is to existing shareholders. Yep, we love welcoming in new shareholders, new shareholders bring new demand, but fundamentally our primary obligation is to existing shareholders, which I’m one of.

Liam

That really does make sense. Thank you for that one. Since our first interview, we keep talking about Ernest Giles, and on the 20th of September we received news that the land access agreement is now in place. Whilst there’s no official word that this has commenced or any work has been started, it’s been noted by Paddy Gall on Twitter, or X if that’s what you prefer, that there’s been some ground clearances taking place. Have you managed to secure a drill rig that might see you get one into the ground before Christmas?

Shaun

That is certainly our intent. I think when we have a drill rig on the ground, I’d like to probably RNS announce it, so you can take from that that we don’t presently have a rig on the ground but we are doing everything we can to try to get some drilling done by the end of, you know, before the end of the calendar year. Obviously as time passes by that becomes, you know, harder to achieve but we haven’t changed that guidance either. So yeah, we’re taking steps to give ourselves every opportunity to do it. It is reasonably hard to get rigs in Australia right now but equally we feel we were well -placed to manage that. So you know I don’t want to preempt anything but we are certainly focused on trying to achieve that. We love Ernst Giles. We think together with the Patterson, Ernst Giles is just a tremendous additional outlet for our exploration team and these first holes we have EIS funding for if we can get them done in short order. So we’re certainly, so EIS funding is from the West Australian government where they co -fund exploration holes. So we’re really focused on that and personally, you know, Ernest Giles is my favourite exploration opportunity.

Liam

And I presume that actually just accessing it in general is really difficult given it’s in the middle of, it’s the middle of nowhere, isn’t it?

Shaun

Oh look, there’s a lot of remote places in Western Australia, so it’s no more in the middle of nowhere than many other places, and Haveron isn’t exactly on a main street either. So we’re used to that, we’ve got a team structured around that. There’s certainly places further east or further out and further, or more remote than where Ernest Giles is. So, but having said that, it is remote even by Western Australian standards and that does feed into the logistical program of getting out there. Having said that, I think we’ve got a team that are well -versed in meeting those challenges safely and efficiently.

Liam

Super. Thank you. So, technically speaking, this next question should really come in our next quarter update. But as you’re here, and we’ve already touched on it in our news segment a couple of weeks ago, I wondered if you could just clarify the new timeline given the pause decline development and what this does to Greatland’s expected timeline.

Shaun

Yeah, so look, the lower contained aquifer is the third aquifer in the sequence to reach the bottom of the ore body. It’s exactly the same approach to all three, which is, you know, drill them from distance to try to understand the width or the depth really of the aquifer, which is effectively just porous rock. These are not open areas, they’re just areas where the rock is more porous so you’ve got a higher level of water generation. We depressurize them with initial holes and then we do wider diameter holes so we can pump them out and we try to get the ground relatively dry before we drive through it with the decline and we typically do the spirals through these aquifers as we did in the two above, just because we like to do the straight in the really competent ground so we can build up speed and cut length. So this is more of the same, albeit where we’re effectively just trying to drive up to the pause point where we start dewatering this and but work continues we just pivot to doing the ventilation back a little bit above us which is joining up those spirals so that there’s a continuous second airway. So effectively work doesn’t cease we just pivot from advancement in the decline to catching up with the ventilation work which needs to be done and then ultimately we restart that and we expect to, you know, I don’t want to give a date until we are, you know, specifically de -watered and when we recommence but we are very close to the top of the ore body so it’s a relatively short number of months once we get underway again and we also think we can get that feasibility study done in that September quarter as well, but we’ll confirm dates once we’ve completed the dewatering work or at least substantially have completed it.

Liam

That does make sense. Thank you for clarifying. This one is just a general one really, and maybe it’s just needing your view or to see if you have a comment on it. I’ve noticed over the course of 2023 that there’s several companies all under the Greatland umbrella now. As the company structure becomes established in Australia, Greatland Exploration, Greatland Holdens, Greatland Resources, Greatland Jury and Greatland NewCo, which I believe to be the new public traded company. Is there any, apart from the obvious benefit of ring fencing, what are the difference between the Holdings, Resources and Exploration companies?

Shaun

Oh look, they’re all 100 % owned subsidiaries so there’s not a lot of change. When I joined it was all just one vehicle, this meant our joint venture, Holdings and other assets were all in a single corporate vehicle which Newcrest had an interest in. I’m not sure that was ideal. By separating that out, it just allowed us to deal with each asset individually and also meant that any recourse was limited to the asset of the joint venture rather than kind of the entire group. So, we simplified it for legal issues as well. So, it was somewhat housekeeping. They’re all 100 % owned by Greatland. It was really just shuffling the deck chairs rather than actually getting new deck chairs. So, it was relatively straightforward, but I think a better structure and a more thoughtful structure.

Liam

And in terms of the top hat, when it comes, it would go above those. Is that kind of how that would work?

Shaun

Yeah, correct. Again, the top hat would only be kind of introduced around an ASX listing, just to have a single vehicle for that, but that’s, again, to my mind, relatively straightforward when the time comes.

Liam

Okay. Thank you. My last question, and a very slightly different approach, comes from my wife over Cornflakes this morning. I was discussing that we were talking to you, and she received an email regarding the AGM and it’s proposals that you’ve got coming up in a month’s time. Being an accountant and stuff, she took a bit of nosy around the company accounts. And the one thing that stood out to her was the amount that had been spent on salaries and share options. She just liked to know, and I tried to defend it and answer it the best I could. I know probably what you’re going to say, but she wanted to hear it from the horse’s mouth. I said, OK, I’ll ask him. So she’d like to know, please, how we can justify spending this money when the share prices declined so much and there’s zero cash flow at the moment?

Shaun

Yeah, thanks. Thanks, Liam. Look, it’s a good question so it’s actually good to talk about it on the program. Look, fundamentally, what should be understood is that over 80 % of that remuneration number is non -cash. And that’s been our approach because, well, your wife is exactly right, we are pre -cash flow. So what we’ve tried to do is, obviously everyone likes receiving cash in their pocket, but what we’ve tried to do is remunerate our team in a different way, both at a board level and at a management team level. And predominantly that’s been with out -of -the -money options at 11 .9 pence. Now, I think they were 45 % out of the money when they are issued to the directors and about 63 % out of the money when they are issued to the management team. But that is the incentive and I think that is the alignment with shareholders. I think we’d all like to see the share price go up and we think we’ve put in a board and a management team aligned and dedicated to that purpose. But also this was around retention and getting people in what, in the Australian mining market right now, is an incredibly challenging and competitive space. And I think we’ve picked the eyes out of it. And also remember this was a one -off. Yep, it was a reasonably large one -off. It locks people in for a period, so we deliver Havieron. But also it locked people in for what’s been a pretty remarkable period where we’ve come in with a joint venture agreement, which had some really non -market terms. But for instance, we ended up having to go into a long arbitration process with our joint venture partner to avoid selling more of Havieron at an extremely low price. We went through that, and I think we were really successful in that. And then also, Greatland had undertaken to pay its 30 % share of development with really no pathway to cash flow. So the team that we’ve had to bring in had to go out and get the funding for that, and that was done in a number of ways, both with equity markets and in terms of getting bank support and bringing in Wyloo as a strategic. So really, I think we couldn’t have achieved all that without the team we have, both at the board and the management level. And to do that with non -traditional, non -cash payments or remuneration, which aligns with shareholders. Look, I hope people understand that. From my perspective, I think it’s been a really good way to thread the needle to get a good team without having short -term cash flows. And if those options do come into the money, it’s a really nice inflow of cash into the company. And we’re all doing well at that point. But remember, it’s not just achieving 11 .9 pence. At that price, the options are still worth zero. It’s about encouraging management to exceed that target. So that hopefully puts that in context for your listeners, but also for your breakfast table discussions.

Liam

Thank you very much. Incidentally, do you know how much it would raise if everybody was to action their shares at the price?

Shaun

I think it’s just over 50, maybe even 60 million pounds. So it’s a decent number, which would be presumably is happening as we’re going into production, which would really solve of any working capital issues we need. So it’s actually to some extent for both personal reasons but also for all shareholders, I’d like to think we’re gonna hit and exceed that target. I like to think what we’ve effectively done is a placement at a magnificent premium. So, but time will tell.

Liam

So, I mean, the more I sit down and look at that Greatland as a company and everything he’s got going for it, from the board to the projects to everything else, the future is really bright for this company, isn’t it?

Shaun

Look, I like to think so, and indeed, I voted with my feet to come and join Greatland. And the reasons I did that are unchanged. One, we have a world -class ore body in Havieron, which will continue to expand. Two, we have the ongoing exploration upside to that, which I think is exciting and tangible and real. And three, I think we’ve got a really interesting corporate overlay here where there’s option value in our stock, now whether that’s because Newmont decides this is one of their premier assets and wants to own 100 % or whether that’s because there’s an opportunity to buy the farm back or whether it’s just because we’re going to go into production and have a tremendous cash flow underlying our company. I think all of those gives us a brilliant platform for growth. So I’m really excited about the platform we have and the progress we’ve made getting this closer and closer to the day where we turn Havieron on. I think, you know, sets us up for value over the short to medium term.

Liam

That’s amazing. Thank you so much. Sadly, that’s the end of this webcast, ladies and gents. And if you want to reach out to us, you can contact us on Twitter with the addresses on the screen. And before you close this page, I’d be grateful of any thumbs up. This interview is supported by your donation. So if you enjoyed it or learned something today, please consider buying a coffee on the link on the screen. Now, Shaun Day, Managing Director of Greatland Gold PLC. Thank you for coming onto the show to discuss the previous quarter. Do you have any last words for your shareholders today?

Shaun

No, thanks for having me. Thanks for the discussion and for shareholders. Look, thanks for the support. And hopefully people will still wanna keep asking questions and attending town halls because I certainly find them beneficial. and I hope shareholders do as well.

Liam

Absolutely. Out of interest, will you be making it to the AGM in December?

Shaun

That is my plan, but the other one lesson I’ve learned this year is not to talk about London travel dates until I have a flight booked, so a provisional yes.

Liam

Okay, that’s understandable. Thank you very much, Shaun. Until next time, my name is Liam, and you’ve been watching AIM OnAir, where specialising and connecting companies with shareholders is what we do best. Thank you.

Greatland is a mining development and exploration company focused primarily on precious and base metals. The Company’s flagship asset is the world-class Havieron gold-copper project in the Paterson Province of Western Australia, discovered by Greatland and presently under development in joint venture with ASX gold major, Newcrest Mining Limited (which is the subject of an approved takeover by Newmont Corporation that is due to complete on 6 November 2023). Havieron is located approximately 45km east of Newcrest’s existing Telfer gold mine. The box cut and decline to the Havieron orebody commenced in February 2021. Total development now exceeds 2,820m including over 2,030m of advance in the main access decline (as at 8 October 2023). Subject to a positive feasibility study and Decision to Mine, Havieron is intended to leverage the existing Telfer infrastructure and processing plant. Access to Telfer will de-risk the development and reduces capital expenditure. Greatland has a proven track record of discovery and exploration success and is pursuing the next generation of tier-one mineral deposits by applying advanced exploration techniques in under-explored regions. Greatland has a number of exploration projects across Western Australia and in parallel to the development of Havieron is focused on becoming a multi-commodity miner of significant scale.