Just been carefully listening to the AGM again... And at 45.20 Shaun Day says they've so far "developed somewhere around 80% of Havieron". Unless that's a mistake, that's seriously key information, given the debt package is untouched (bar the Wyloo loan). I noticed it at the time but wanted to double check - and he's definitely not talking just about the decline being 80% complete, at that point, he's talking about the overall project.
For context: he's basically answering a question about the possibility of a takeover from a PI, and he says “We recognise that Havieron is a world-class asset, in a Tier 1 jurisdiction, with lowest quartile costs, and we’ve developed somewhere around 80 percent of it. And that narrows our pathway to free cash Flow, and it’s attractive.” Full context is in Dips notes here: viewtopic.php?t=850
A lot of people took away that he was talking about completing 80% of the decline. And I agree, he does also certainly say that elsewhere " we're about 80% of the way through the decline" several times. But think about this: There's a lot more to Havieron than the exploration decline. A lot more.
Could Shaun have mixed his thoughts up in the moment...? Maybe, but if you go back and listen carefully back to his words and his intonation yourself, they are definitely and quite specific - as I say I recall it jumped out at me at the time.
Further, theres way more capex spend than just an exploration decline thats involved in Havieron stage 1 anyhow. ( that's already gone into construction and is presumably, functional). We've seen the 30km of access roads widened in Linkdin , and new roads built, the 3-4 huge evaporation ponds, the paste plant, electrical and the ventilation systems, the box cut, the exploration decline, the equipment sheds and core buildings, the raise bore vent shafts and the most recently, the 2nd vent shaft ( thats going in soon) not to mention the waste rock land forms the roads and drainage work.
Beyond this lot, they are at the 420 level soon and then into the U/G Drives and stopes , underground power supply. But in terms of construction really what else is there...? Stoping tunnels and drives and the decline to lower levels ... any final underground infrastructure, power lines from Telfer and getting the final fleet and any communications and plant control systems in.
Seems to me like the bulk of the major construction work is now done. And thus the bulk of the CAPEX is now spent. We don't have a large processing mill to order, and build and then commission or huge access roads or power station to build.
Presumably, they develop the top 2-3 few levels for mining laterally, and continue with the decline and lower access levels simultaneously. And buy that point the development will accelerate into multiple mining fronts - with multiple ongoing work faces - once into the ore and, at the same time, have teams developing the lower levels of the decline.
By this time: - we can be removing 2-3mt form the upper levels, maybe more(?) and still be building the lower levels
I have always felt that the overall cash burn likely supported a higher proportion of the overall mine build being complete, and thus, the projected CAPEX spend be further on than most might think......I cannot help think that NCMs next plan was to delay the DFS, and keep building the mine in the hope GGP ran out of cash, in the knowledge our $220m debt funding package was dependent on their DFS.
This project is seriously de-risked now. It's 80% developed as of 6th December 2023.
