Newmont and Telfer (with Havieron)

[Rotherby]

We are another step down the road.

We have a value for there bit of Telfer and Havieron if Newmont believe the figures they have put out today then $600mill buys them out.

If they play funny and decide not to mine we are set prime to buy the lot.

Personally I think they will decide to mine, but miracles do happen.

[jecsggp]

Thanks for that - I was just looking for possible gremlins!

J

jecsggp.

As the ore is taken out of Havieron, it will not be split down into GGP ore and NCM/NEM ore.....it will be JV owned ore.
It will then be transported to Telfer and processed there with the costs being borne by the JV in proportions as per the JV ie 30/70.
Any income generated will also be split as per the JV ie 30/70.

Additionally, I believe that the mining plan will accommodate the mining of the ore which is covered in the FS but this will not include all of Havieron, just the initial project. As they progress the mine, they will prepare more PFSs and FSs and mining plans which will augment the foundation mining plan. Lots of projects over the coming years as the orebody is better understood.

ATB RA

[Bamps21]

I would like to clarify my thoughts on the cherry picking of the high grade pods in the top 30%.
It makes sense to me to change the stoping plan of 3mt pa to produce this from the top 300m first before proceeding down the SE crescent
I’ve shown these 2 zones in the slide as Red for the top 300m and black for the 2nd phase going downwards
Stoping would in fact cherry pick the Northern breccia and maybe breach government guidelines worried about companies leaving behind weaker ores.
This top 300m though has crackle breccia surrounding these pods mainly at the top and edges that look particularly weak but these could be dropped later.
Personally I don’t believe it will be mined, I think it will be left in to support the cover falling in.
So we have the top 300m with the high grade pods and some of the breccia stope mined and backfilled with surrounding weaker breccia left in.
The next 300m has more high grade pods and a greater volume to stope and backfill, there’s not so much crackle around the edges here but backfilling will also hold up the cover.
I don’t feel the top 600m will be bulk mined apart from underneath the hanging wall of the Dyke which will be SLC, stoping will allow an SLC under the Dyke wall to proceed simultaneously.
In the meantime the Decline can continue its descent with no time pressures

[Rotherby]

I have had to today review my words from almost a year ago, and I think most of my thoughts from last year still hold, I still think that Telfer is actually a substantial liability, and Havieron is still not past the important point where we are at the ore or an (official) decision has not been made.

I hope that this means that to take on the liability for Telfer, reasonably balances the 70% of Havieron. Only yesterday I looked at where GGP. Newcrest and Newmont are/were based in WA. GGP and Newmont are in buildings 500 and 502 ie next door, Newcrest were a few 100 metres away, with our (known) ongoing relationship with Newmont nobody would have given a second glance to Newmont and GGP going into each others offices, I for one hope that Shaun has already had discussions as I hoped a year ago.

I am a little/lot frustrated as I am in Spain until the end of March so cannot get to the Town Hall meeting, I am certain that others will report back all and everything, but it is not like hearing it direct.

My final comment from May last year applies again today.

"Re: Newmont and Telfer (with Havieron)
Post by Rotherby » Sun May 21, 2023 3:18 pm

I had not gone that far, but my thoughts for what they are worth.

I think it will be a sale as a going concern, so work will continue, they have a JV that requires to continue, and a decision to Mine or Not, unless they want to pull out of the JV and we then get the 70% back for free, I cannot see that as a possibility, also they have a large work force and contracts that will not disappear.

Shaun has experience of these type of deals and I would suspect that most of the deals are 'done deals' before anyone knows what is happening, the logical buyer for the Telfer/Havieron Project is Greatland due to the constraints of the JV, selling to a third party could be a problem as the JV will get in the way of agreeing on that unless the buyer is a Greatland major shareholder with deep pockets.

Newmont know what they are doing have done it before, (and sold to Shaun) they know their figures, it could be that discussions have happened or are ongoing. If the sale is to go ahead then I would not be surprised at a sale agreed in principle before we list on the ASX, subject to the merger going ahead, this will allow us to put the funding in place by debt and a raise via the ASX.

The share price is anyone guess, but with a route to profit it must be assumed that the price will at least hold in the 7 to 10p and slowly move up as we get to/near to production when I would hope we would see 15 to 20p still short on the price of Shaun's options @25p by 4 May 2026. Lets hope Shaun can exercise him options at a profit so 25 plus maybe 30p in April 2026 or better, I think most LTH would be happy if this comes to pass.

I would like to hear other views as well, I have in the above put my view as of today, Monday may bring news that changes my view."

[Hydrogen]

Great News IMO - becuase the scale of the opportunity ahead is truly phenomenal.

Shaun is delighted....

And if you want independent verification listen to this.

Legendary Analyst John Macdonald on Spotting Company Lies & Calling It How It Is:

https://www.youtube.com/watch?v=HG6W6DlsvyI&t=3716s

Listen from 51:20 min (or 5 mins before) if you want to get the full context. He's talking about good management and NST under Bill Beaumont and Shaun Day IS the model for how a company should develop:

From Zero to $14bn - more than just luck.

Hold for Gold.

Hilariously The 1.5m in Short sells getting immediately mopped up with SP dipping 8% at one point and now it's blue. .

[CanisLycaon]

Newmont, the world’s top gold producer, will seek to sell six mines and two projects in a set of divestitures aimed at generating $US2 billion ($3.05 billion) in cash.

The Denver-based company said Thursday (Friday AEDT) it intends to divest three Canadian gold mines — Éléonore, Musselwhite and Porcupine — along with Cripple Creek & Victor in the US, Akyem in Ghana and Australia’s Telfer mine.

It also plans to sell two “non-core” projects, Havieron in Telfer, Western Australia and Coffee Gold in Canada. Havieron was acquired when Newmont bought Newcrest Mining....

....In an interview, chief executive officer Tom Palmer said the mines being divested do not meet the company’s criteria of “Tier 1” assets.

“We have a number of Tier 2 assets that are very good assets, run by very good people, but that don’t make our Tier 1 category,” Palmer said.

The company has already begun receiving interest from potential buyers, Palmer said.

https://www.afr.com/markets/commodities ... 223-p5f77h

[zoros]

Watch Wyloo.................

Z

[Rotherby]

Newmont, the world’s top gold producer, will seek to sell six mines and two projects in a set of divestitures aimed at generating $US2 billion.

IMHO, telfer mine is a liability, it has existed for about 50 years to date, the liability offset may be very similar to any value that a project <their terminology> called Havieron has.

Thinking about Telfer, I found this for a mine that existed for 30 years, In 2011, " a settlement of US $193 million settlement was reached to clean up Midnite Mine site", Newmont collaborated with the Environmental Protection Agency (EPA) to align on a Remedial Action Plan; remediation activities commenced in 2016 and will continue through 2032.

So the clean up did not start for 5 years after settlement and is expected to take 16 years, I can see the final cost being at least treble the 2011 figure, and would assume you would want a similar figure inflation linked to take on the redundant mine (without Havieron ore) at Telfer, I would think that the amount of reinstatement and the care required would be more that was expected in 2011. From this I would guess and I am no expert just passing my opinion a figure in the region of $US750 million may not be wide of the mark. Happy to be corrected.

Then we need a value that someone would want to offer for the 70% on which GGP have the right as I understand it of last refusal, again I think we can use figures from the past, and Newcrest considered $US 50 million to much for 5%, $US 840 million may not be far from the mark, we as it stands have no permission to mine or decision to mine, if we were a producing mine I think the values would be very different .

If a am anywhere near correct with these figures then the value of Telfer and Havieron cannot be excessive, if for any reason Havieron does not become a mine someone has the reinstatement cost without the revenue from Havieron and I would think the WA government would need a bond of some sort to make sure money would be available no matter what happened to Havieron.

Can Newmont's other disposals return the $2 billion Éléonore, Musselwhite and Porcupine, Cripple Creek & Victor , Akyem plus Coffee gold, maybe yes.

Just me thinking aloud, lets hope this goes well for the PI, new and LTH's

[Bamps21]

This image showing the combined assets came out some time ago.
The Capex spend was not likely to be spread evenly and the ones on the extremities would likely suffer in the allocation of funds.
Telfers bubble now is actually a lot smaller.
Grouping Havieron with Telfer is like a millstone.
Telfer is running out of ore it’s slid from a tier 1 in recent years through the tier 2 bracket to closure status.
Havieron being lumped with it can’t be looked on as a tier 1 mine yet it’s going to have to start producing.

[Hydrogen]

Here’s a Sprott Capital Partners research note :

NEM-CN / GGP-GB: Confirmed list of non-core assets they are willing to sell post NCM acquisition: 4 Canadian mines Éléonore, Musselwhite, Coffee and Porcupine, 2 US mines Cripple Creek & Victor, the Akyem mine in Ghana and Australia’s Telfer/Havieron mine & mill (great news for Greatland Gold) – recall Greatland owns 30% of Havieron and have aspirations to own 100%. It’s a tier 1 asset that should start ~200koz, and can expand to 600koz, with bottom quartile OPEX, first ore late ’24 or early ’25. This is the ex Northern Star team and has deep pocket backers.
Pretty incredible Newmont made only made US$88m in FCF in 2023 on 5.5moz Au of production.

Boom! Sprott say Tier 1 600koz mine.
Love it. - “Great news for Greatland”

Can’t wait for Shaun to drop his 8mt DFS
All quite speculative, but feasible outcomes…

[CanisLycaon]

Newmont puts Telfer up for Sale with Andrew Forrest-backed Gretland Gold the likely buyer

"Newmont Corporation has announced it will divest six of its non-sore assets, including its Telfer goldmine in the Pilbara, with Andrew Forrest-backed Greatland Gold the likely buyer..."

https://www.businessnews.com.au/article ... r-salemont puts Telfer up for sale with Andrew Forrest-backed Greatland Gold the likely buyer - Business News

[CanisLycaon]

Who’s in line for Telfer?

Nearly every gold boss in the country will be tapped on the shoulder and asked in the shady corridors of West Perth who wants to make an offer on Telfer and — the larger prize — its adjacent Havieron discovery in the Paterson Province of central WA.

The mine has been operating for decades but it’s the underground discovery of gold and copper and Havieron — expected to produce in the order of 160,000oz gold per year for nine years once in production — that has eyes turned to the asset.

Operated by Newmont in a 70-30 JV with London-listed and Andrew Forrest backed Greatland Gold, the obvious suitor is its junior JV partner.

Newmont’s latest resource update has given Haverion an inventory of 47.4Mt of indicated resources at 2.65g/t gold and 0.34% copper for 4Moz of gold and 161,000t copper.

Another 900,000oz of gold and 26,000t of copper is contained in inferred resources.

Greatland’s outlook is more bullish, with the junior reporting its own resources against the backdrop of a disagreement with Newcrest on the total value of Havieron amid bartering over an 5% stake from either side...

https://stockhead.com.au/resources/grou ... craps/?amp

[Rotherby]

Newmont purchased Newcrest for $17 billion and in FY 2022 and FY 2023 Newcrest produced around 2 million oz of gold.

6 months later Newmont now want to sell 5 mines which produce about 1.25 million oz of gold and they value these at $2 billion, this of course ignores the life of the mines. I have left Telfer out as a mine it has no life left.

I have put this this way as I continue to think that the package of Telfer mill, Telfer costs of closing the mill inc. making staff redundant, Telfer reinstatement, Mill site and mine, the cost of Havieron Project into to a mine which could as this stage still fail, value is very low.

On the plus side you have the value of the 70% of of the Havieron Project, but as above this could fail, and failure would have costs involved, to get rid of liabilities for the Telfer package a $1 may be all it takes, a figure mentioned by Shaun applying to Telfer.

I think looking at the figures above that Newmont have very low values for both 'Projects'.

[Francis]

That’s an interesting post Rotherby. It’s likely there will be close regulatory attention to any sale of Telfer. Regulators will want a deeply capitalised company to backstop the potential environmental liabilities, which are hard to quantify and could stretch out over decades. I can’t see them letting responsibility for Telfer be transferred other than to an existing major. A potential solution would be to require Newmont to post an enormous bond against the potential future liabilities, but I can’t see Newmont being keen on that.

The idea that future profits from Havieron might be used to fund the rehab of Telfer seems very unlikely to find regulatory approval as there’s no certainty they will be delivered. Regulators aren’t going to take a risk position on future profitability in the way that equity investors might.

Looking at expectations often discussed here for GGP, the potential future profits and cashflow from Havieron will be stretched very very thin if they are going to pay for interest on GGP’s debt, the eventual retirement of that debt, future CapEx, the rehabilitation of Telfer AND the much anticipated dividends for GGPers grandchildren.

Even if the “package price” for Telfer + Newmont’s 70% share of the Havieron project was $1, it’s very hard to see GGP as a credible buyer. It simply doesn’t have the financial resources necessary to take Havieron into scale operation. Wyloo (or anyone else) won’t write GGP a blank cheque to underwrite this so GGP would need a massive capital raise of some sort. A big issue on ASX might be ideal for Shaun Day and the Aussie insto investors and boardroom beasts to whom he owes his future employment opportunities, but less than ideal for GGP’s long-suffering shareholders.

[CK 1974]

From all the speculation, it looks like newmont want to divest these projects in 2024, so I guess we’ll all find out soon enough what Shaun and the bod’s have in mind. Not long to wait imo

[Rotherby]

You could be right regarding the bond, but this may be part of the deal, if Wyloo, is not involved, but I would expect them to be in the mix.

Since Newmont made the original statement last year about Tier 1 assets with NDA's a lot of interested parties could have been having discussions with Newmont, (My post from last year included, if I could see as a possibility last year then our BOD is in a much better place than me) a lot of deals could be in the final stages.

With our office and Newmont's offices being right next door not down the road or several blocks away, no one would have thought it funny to see board members of a junior JV company visiting the manager of JV's they own together.

In all my posts are just my thoughts and could be way off the mark, although I hope we can in some deal get Juri JV, Havieron 70% and Telfer but the deal needs to be advantageous to GGP shareholders without it breaking the bank, maybe a JV with Wyloo, I

That’s an interesting post Rotherby. It’s likely there will be close regulatory attention to any sale of Telfer. Regulators will want a deeply capitalised company to backstop the potential environmental liabilities, which are hard to quantify and could stretch out over decades. I can’t see them letting responsibility for Telfer be transferred other than to an existing major. A potential solution would be to require Newmont to post an enormous bond against the potential future liabilities, but I can’t see Newmont being keen on that.

The idea that future profits from Havieron might be used to fund the rehab of Telfer seems very unlikely to find regulatory approval as there’s no certainty they will be delivered. Regulators aren’t going to take a risk position on future profitability in the way that equity investors might.

Looking at expectations often discussed here for GGP, the potential future profits and cashflow from Havieron will be stretched very very thin if they are going to pay for interest on GGP’s debt, the eventual retirement of that debt, future CapEx, the rehabilitation of Telfer AND the much anticipated dividends for GGPers grandchildren.

Even if the “package price” for Telfer + Newmont’s 70% share of the Havieron project was $1, it’s very hard to see GGP as a credible buyer. It simply doesn’t have the financial resources necessary to take Havieron into scale operation. Wyloo (or anyone else) won’t write GGP a blank cheque to underwrite this so GGP would need a massive capital raise of some sort. A big issue on ASX might be ideal for Shaun Day and the Aussie insto investors and boardroom beasts to whom he owes his future employment opportunities, but less than ideal for GGP’s long-suffering shareholders.

Orginally posted Sun May 21, 2023 3:18 pm

I had not gone that far, but my thoughts for what they are worth.

I think it will be a sale as a going concern, so work will continue, they have a JV that requires to continue, and a decision to Mine or Not, unless they want to pull out of the JV and we then get the 70% back for free, I cannot see that as a possibility, also they have a large work force and contracts that will not disappear.

Shaun has experience of these type of deals and I would suspect that most of the deals are 'done deals' before anyone knows what is happening, the logical buyer for the Telfer/Havieron Project is Greatland due to the constraints of the JV, selling to a third party could be a problem as the JV will get in the way of agreeing on that unless the buyer is a Greatland major shareholder with deep pockets.

Newmont know what they are doing have done it before, (and sold to Shaun) they know their figures, it could be that discussions have happened or are ongoing. If the sale is to go ahead then I would not be surprised at a sale agreed in principle before we list on the ASX, subject to the merger going ahead, this will allow us to put the funding in place by debt and a raise via the ASX.

The share price is anyone guess, but with a route to profit it must be assumed that the price will at least hold in the 7 to 10p and slowly move up as we get to/near to production when I would hope we would see 15 to 20p still short on the price of Shaun's options @25p by 4 May 2026. Lets hope Shaun can exercise him options at a profit so 25 plus maybe 30p in April 2026 or better, I think most LTH would be happy if this comes to pass.

I would like to hear other views as well, I have in the above put my view as of today, Monday may bring news that changes my view.

[Rotherby]

Just some thoughts again.

I have dealt with the scenario where GGP purchase the Telfer package, which I think at this stage is a Zero cost option due to the risks involved with both Telfer (Cost of Clean up) , and Havieron (Unforeseen circumstances prevent the mine becoming fully operational). Operating the Mill at Telfer at less than 50% of one train which is 50% of the plant seems costly.

There is another option that may help in the negotiation with Newmont and that is for GGP to concentrate only on Havieron and leave them with Telfer and the greater risk. In that situation we could build out own plant at a cost and delay.

Newmont or any purchaser of Telfer would want to reduce their costs, so would still want to off load a lot of the infrastructure Airport, Power plant and Village. They would still have a Mill that could process our ore until such time as the new Havieron mill was available, this would allow the clean up of Telfer to be phased.

I do not thing Newmont can force GGP to buy Telfer and too higher price for the 'Package' could make this a viable option, the agreements regarding Telfer processing the ore would be sorted in the agreement to purchase, even though I post this I think it is unlikely,

Of course if after selling Havieron to GGP, without a purchaser Newmont would be left with a liability, a White Knight (Wyloo) arrived could arrive and take the risks of Telfer off of them for a consideration.

There are many options and I hope GGP have the upper hand in this, better still that the deal is done and we will be told in an RNS before the TH meeting.

[Francis]

I’m going to risk advancing a less positive prognosis.

GGP doesn’t have the upper hand in anything here. They bring nothing other than their 30% and their ROLR to the party and it’s not clear that is going to be enough to secure a winning outcome for existing shareholders.

It’s very hard right now to draw supportable conclusions on valuation. Without the DFS we don’t know how much additional capital is required to take Havieron into operation. At the risk of stating the obvious paying for 100% is very different to paying for 30%. Neither do we yet know how the AISC has been affected by the recent inflationary period, or whether changes may be required to the project discount rate given changes in the risk-free rate. These are MAJOR unknowns.

GGP’s existing bank finance package shouldn’t be considered to be “in the bag”, especially if GGP is to take on 100%. It is one thing to get permission to go fishing with your experienced and capable big brother, quite another to be allowed to go fishing by yourself. Bank appetite for credit risk is not what it was when the terms were agreed. Shaun Day has done well to keep the syndicate publicly “on board” this far, but that chain might yet be yanked hard.

The potential sums involved are getting large for a thinly-capitalised minnow with no [other] revenue streams. The idea that the “Telfer Liability” might be offset against the value of the 70% thus producing an attainable net figure for GGP seems far-fetched. Regulators may well intervene to ensure that any open-ended environmental liabilities remain attached to a deeply capitalised corporation.

The suggestion that a deal might be done for future NSR or similar doesn’t meet NEM’s requirement to realise cash. They have promised $2bn to the market, and will need to deliver in order to avoid undermining their own credibility.

If GGP is to end up owning 100% of Havieron plus Telfer, all of the following will need to be funded one way or another:
- the existing debt due to NEM
- the purchase of the 70% from NEM
- the purchase of Telfer (perhaps a small or even a negative figure)
- provision for the eventual Telfer shutdown / rehab costs
- the remaining capital expenditure to bring Hav into production [by the way, there is NO chance of this being achieved in 2024]
- the operational funding requirements prior to first revenues [mineworker salaries, energy costs etc]

As the Money of Mine guy says in their podcast, “…it could be like a $1.5bn IPO or something…”

If multiples of GGP’s existing market cap are required (and I think that SD and his carefully cultivated boardroom buddies would LOVE to do it!) then the interests of GGP’s existing shareholders will get ground to dust in the process. That’ll be fine for SD who will be the proud captain of a shiny new ship, rewarded by his delighted BoD with a reset on all his options etc. Don’t expect Wyloo/Twiggy to act as some sort of big-brother here, when the sums get super-sized they will look after their own interests.

A more likely outcome is that SD accepts the hard reality that Telfer and Havieron are going to be sold as a package (because Telfer will be too hard to shift by itself) and that the capital sums involved are out of reach for GGP. He’ll do a face-saving deal with Newmont, securing some value for the 30% and the ROLR. Newmont may pay up to remove the GGP wasp from their picnic, but whether the sum secured will be eye-watering for GGP in a positive way remains to be seen. Newmont will then turn uber-bullish on the prospects for Havieron - expect massively upgraded resource statements etc - as they’ll be looking to sell their 100% interest. If I were SD I might settle for a small sum up-front and a share of whatever NEM ultimately realise. Such a shape might suit NEM better too.

Have at it, as Ozzy Man might say.

[Hydrogen]

Dear Francis

I would suggest that possibly you don’t understand something - scale - Havieon is much like Telfer (just under 400m of Sand cover

…. HAVIERON will be a 40 - maybe 50 - year project.

Havieron is so big there’s almost no chance of the liability of Telfer being an Issue in our lifetime. It’s a major regional hub that will never be closed on a scale that will be unlikely to be ever be repeated.

Plus as Shaun has explained the geology geo-chemistry and science of Havieron demonstrates that it is very unlikely to be orphan. There will be other Havierons in the vicinity. It’s just a matter of time finding them.

Not to mention O”Callahan’s. Minyari, Winu that we actually know about today.

[Rotherby]

Francis:

You may find these figures of interest
Newmont purchased 2,015 Koz of production for$17billion
Now in 5 mines they want to sell 1.250 Koz of production for $2 billion , they should not struggle to realise the full amount and more from the5 producing mines.

I agree with Hydrogen that long term if GGP succeed any cost for reinstatement will not be a problem. Today there could be the requirement of some form of guarantee of performance should GGP end up with the reinstatement costs for Telfer. WA have an interest in the success of mining and will cooperate if they think any plan is viable for WA.

I do appreciate that all I post is suppositions,