Notes from GGPHelp interview with Callum Baxter - 08 Mar 2024

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Notes from GGPHelp interview with Callum Baxter - 08 Mar 2024

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Notes from GGPHelp interview with Callum Baxter - 08 Mar 2024

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Callum Baxter, Former Chief Geologist, and finder of Havieron stopped by for a chat and a catch up with all things Greatland Gold PLC.

* Hello welcome to GGPHelp TV, sorry I'm laughing because this is just… I've done this so many times now it's hilarious but you're about to see an interview that I did recently with Callum Baxter the former Chief geologist and board member of Greatland Gold who was credited with finding Havieron.
In this episode we're going to talk about the Newmont divestment case, what it means for Greatland and apart from that I hope you enjoy it. If you do, please hit the thumbs up button and now you got to join Callum and I as we get into our ice breaker and start the interview so Callum as always, we need to break the ice with a little ice breaker and today's is a question about music. What album did 16-year-old Callum listen to the most?

- wow okay that takes me back a bit, obviously that would have been sort of mid 80s for me and usual electronic bands of the time I suppose I was listening to
- but also the 80s guitar bands yeah, so quite a few different ones but yeah lots of good ones on the platter on the record table at the time

* It's probably almost too hard to choose as it were with the plethora of bands that were that that were out there…?
- yeah so so much different 80s music it's amazing

- I've got a few kids and one of them is 17 and he often drags out some of the 80s songs just from his own repertoire without me suggesting anything… is it quite amazing, it takes me back

* It does absolutely, thank you I normally, well it's too early in the morning for me, I normally like to work chronologically but I think we'll probably, all we want to talk about is what's currently going on at Greatland now as opposed to anything else.
I feel we should probably stipulate ahead of time that these are your thoughts and not something that should be construed as financial advice or is it guaranteed to be how things play out. Now my first question, Newmont just put Telfer operation and Havieron project up for sale, did that make you dip your head or give… did you give a little fist pump?

- I thought it was quite positive actually
- the whole move of Newmont buying Newcrest played out last year and came to a conclusion, so that sort of changed the dynamic for the Paterson a little bit in terms of the question on everyone's lips was what is Newmont going to do with the Paterson assets which includes Havieron
- and for them to make a swift decision and announce that the asset is up for sale is actually quite positive because quite often companies if they're bit ambivalent about a project…
- they can spend years trying to make a decision as to what they're going to do with it and that scenario wouldn't have been positive for Greatland
- but now Newmont has actually run its flag up the mast, there’s a sales process… it's good because that can focus everyone's attention on what the next step is for Havieron project and for Telfer

* Do you think that obviously when you look at the process between what happened with the Newcrest and Newmont and that took what February to November is that the sort of time frame you'd expect, or because of what work we've done already with Havieron and what we know… that time frame could be potentially shortened?
- well Newmont have said that a number of their assets are up for sale and they hope the sales to conclude during 2024
- they haven't really set it you know a specific date but they're obviously looking at the next 12 months to conclude various sales
- Newmont's motivation here is they have inherited some debt from the Newcrest transaction which they want to clear, they’re issuing some notes at the moment which will partially offset that debt but they also want to move some assets to offset the debt
- now the faster that they can offset the debt the better so it's in their interest to move faster rather than slower

* Okay Newcrest had Telfer really not performing very well at all, if someone came to you and said look here's a mine but it's also got a complete mill and everything you need to run a Gold mine, do you think over time it's possible to make Telfer profitable again?
- it is I believe, so there's a bigger dynamic here though in that Telfer is effectively a legacy asset
- it was established many years ago based on a very large gold resource and there's still a large gold resource albeit at low grade at Telfer
- so the plant has a very large annual capacity of plus 20 million tons processing capacity which is extremely large you know
- 1 million ton capacity per annum is you know a small operation in Western Australia, so Telfer potentially could be 20 times that size
- and Telfer has passed its Glory Days in terms of high grade ore but with Havieron with extremely high grade ore and then other deposits in the region Telfer could effectively become a processing hub for all these deposits and be a very large producer on an annual basis
- it obviously has the capacity to process the tonnage and then there's the plant there for the metallurgical processing of the ore which may need a few modifications to accept ore from the different ore bodies which is not quite the same as the Telfer metallurgy
- but nonetheless everything's already permitted, there's a gas pipeline and multiple power stations on site, an all- weather air strip, trafficable roads
- so to… I think to package Telfer with other deposits in the region is a very likely scenario going forward

* And I suppose that's the thing because all we've really got at the moment is Havieron… but there's the likelihood of that extra find... that next find… it exists doesn't it?
- there's some smaller deposits a bit further to the north at Minyari (Antipa) which are known about and they're part of the existing joint venture with the old Newcrest, which is now Newmont
- so Newmont effectively have some kind of control over those at the moment and presumably the joint venture interests will pass to a new owner
- but don't forget also there's the Winu deposit and the other nearby satellite deposit Ngapakarra which Rio Tinto found a few years ago
- Winu itself is very large, it has copper and gold as well similar to Havieron, so you know there's large tonnages that could be extracted from those deposits and brought to Telfer for processing into the Central Hub
- of course you don't have to build another plant, you don't have to go through the permitting exercise for a new operation, establish all that infrastructure so it's not so much about finding new deposits, it's tapping into the existing ones

* That's interesting… because like Winu is like 80 kilometres north of Telfer, but you don't see that as an issue at all?
- no no, in around Kalgoorlie, ore is quite often trucked for those kinds of distances between operations so ore from satellite deposits is trucked to a central processing facility, so those kind of distances are easily achievable

* And there I'm smiling because there's me like oh 100 km, that's away and but this is Australia we're talking about 100 km is a daily occurrence yeah?
- it's actually not that far

* No no that's fair that's fair, I just it's just made me smile, sorry so when we look at Telfer geologically how different is it from Havieron?
- well Telfer deposit itself is similar to Havieron in that it is an intrusion related gold system
- Havieron is gold related intrusion deposit as well, they have similar geology in that they’re sort of limestone rich sandstones and that's been the reactive rock of which the ore fluid has like to deposit the metals
- but the differences are between Telfer and Havieron is… Havieron’s got a slightly different sulphide assemblage in that the different minerals that hold the gold in the copper… and Havieron is much higher grade than what Telfer is at the moment
- now Telfer had a very high-grade core to it in the gold lodes or the quartz vein structures which were quite large and then it had has a low grade sulphide halo around those lode structures of I think the footprints roughly 5 km by 3 km
- whereas Havieron is much more compact but it has an extremely higher metal content per square meter
- where Havieron footprint is roughly 1 km by 1 km but then when you get into the mineral resource estimate and look at the blocks it shrinks a little bit more but the concentration of the metal is much higher in that square meter at Havieron

* Okay, thank you… for the layman what would owning Telfer mean should Greatland purchase both sites… yeah I'm not sure what happened there, my camera is just gone, I shall work on that while you're answering their question… should Greatland purchase both sites or better still if you had the opportunity would you purchase Telfer?
- short answer is yes I would
- and the reason being I've explained already you… you've got a large camp for 100 plus people, all weather air strip, multiple power stations, gas pipeline and an existing processing facility which is rather large broken into two trains
- so you don't have to run 20 million tons per annum, you can break it down to 10 and 5 million tons, flotation circuits are already there, slight modifications to accept the Havieron ore
- and the only thing that's needs to be completed is the decline to the top of the Havieron ore body and then the Haul Road… 50 between 50 and 75 km of Haul Road and you're producing metal
- so I think people will be surprised actually what the actual value of Telfer is, because there are some environmental requirements there which goes along with every other mining operation in Western Australia
- so I think the purchase of Telfer will actually be quite cost effective and it's a perfect match for Havieron

* Okay so after my little technical hitch, I am now back so thanking you for your patience there.
You more than anyone will know about the intricacies of the JV agreement that was signed with Newcrest, did you ever think that as that deal was done that you'd be sat here today, sat here today with the opportunity to take it all back and be in a strong position to get some kind of deal that could see it come to fruition?...that's a really badly worded question but hopefully it makes sense?

- sure yeah I understand the gist
- well I suppose when we entered the joint venture no I didn't really have any idea that we'd be in this position where potentially Greatland could take the asset of Havieron back
- but we did consider that in the documentation for the joint venture because Greatland has a right of first refusal or some term it as a ‘right of last refusal’ (ROLR)
- so if the asset is potentially being sold by Newmont to a third party then Greatland has a final say as to whether it wants to match that offer or not
- so you know in the documentation we did contemplate this scenario which is actually playing out right now
- but in reality the chances of it happening, we didn't perceive to be very strong but you know fairly slim chance but it has it has happened, so it shows that we were fairly thorough with the documentation

* Absolutely, it's an amazing story, I genuinely think part of it should end up on Netflix at some point because the way the whole story has played out… so and that's awesome, can I ask you a personal question and sorry for being so intrusive but I feel like we should ask the question. Are you still a Greatland shareholder?
- I am… I'm still heavily invested in Greatland and I do follow the story
- I believe it's a great story and it still has a lot of upside and if ever you've seen a cheap investment… or shouldn't say cheap but a compelling investment then look at the share price today and look at the gold price today and it's easy to convince yourself that you should be invested in Greatland

* That's awesome thank you very much for that, I appreciate that. Obviously we can't talk for the Greatland board of directors but if you were them what would your approach be to getting the money available or perhaps the better question is what options are available to a company like Greatland?
- yeah well I don't have any inside information although I do keep in touch with the board and other people at Greatland but I'm not privy to any information that's not already released to Market
- but if you look at the way that Greatland has put debt facilities in place and funding in place you can see that the stage is already set for the scenario that could potentially play out over the next 3 to 6 months
- they have access to Capital from various financial institutions and private organizations
- and if you have a look at the current presentation which I think was made available in the last 48 hours on their website you'll see that the those facilities and who's behind them
- so you there's an awful lot of support from the big end of town here and so in terms of where they will go looking for the financing you can already see where it would come from

* Okay that makes sense and do you… we being the private investors quite often talk about all the Pension funds that are waiting on the side lines, do you see them having a big impact on a company like Greatland once those shares become available to them for purchase?
- oh definitely, the moving to a different… not moving I should say dual listing on a different Market such as the ASX will effectively open the floodgates to institutional investment and also insurance companies etc.
- you can see that a few have dipped their toe in the water in the last six months, State Street and there are others waiting on the side lines for their green light to invest actually and I think at the moment AIM is maybe not their favoured market for Investments and that's why they haven't pushed the button yet
- but definitely an ASX listing will change the dynamic

* Okay thank you, I could keep asking probing questions on this but I wonder if it's almost better to ask you your thoughts on anything I may have not said or covered because it's such a complicated subject that I'm keen to ask you the right questions.
But obviously not probe too much… so I just wonder is there anything else that you feel that for an investor would be handy information to know I guess is what I'm asking?

- okay for a basic retail investor it would be very handy to look at what's called the Lassonde Curve and it's effectively a share price graph over time of a small company that starts doing mineral exploration, makes a Discovery and then that Discovery moves through development and then into production
- and you can clearly see that there's three phases here from a relatively low price in exploration to a higher price on Discovery
- and then the price of the stock declines during the development phase, that is you know creating the decline, getting the plant under construction and then producing metal
- and then once production starts there's a rerating of the stock and the share price increases again quite often to levels higher than the original exploration scenario price
- so that's called Lassonde Curve, people should just look it up and clearly Greatland at the moment is in the development phase which is a relatively subdued share price in between the high exploration price and then the high production price
- and so it's easy to see that the next move up will be on production and that is potentially not too far away
- I know at the moment we potentially got a sale process to go through and completion of the decline but also put that into context with the current gold price which is at record highs of over 2150 USD per ounce at the moment and there's going to be a lot of retail eyes looking for compelling Investments and if you look at the price of Greatland stock at the moment and the assets that they have and the opportunities that they have it's very easy to convince yourself that it's worth buying Greatland stock at these levels
- And a lot of other people and institutions will be doing that at the same time

* And I guess that leads quite nicely into the next note that I've got on my piece of paper here, that kind of comes back to the fundamentals of Greatland, that the fundamentals are strong for this company?
- yeah and they always have been, now Greatland has an extremely competent board which are really well connected
- also the company is financially secure and also Newmont’s provided a clear mandate that the assets are for sale and they want to move these things along as quickly as possible
- which gives Greatland the impetus to potentially secure the Telfer asset and the rest of Havieron which is now owned by the Joint Venture partner
- or alternatively a sale process to a third party may come through which means a higher share price for Greatland when its stock gets bought

* Either way this comes back to one of the first things that you said to me in our first interview which is win-win-win?
- of course and because the asset is just so wonderful, the Havieron asset, it's very difficult for anyone to walk away from it
- So the various scenarios all play out as a win-win situation for Greatland and it's still the case?

* Yeah, no that's amazing okay, thank you, so let's talk about Ernest Giles… in February Greatland issued the news that two Diamond holes have been drilled with 8 meters of 0.12 grams per ton gold, what did you make of these results?
- I thought it was good in that mineralization was intersected again in the basement rocks
- again this is an undercover exploration opportunity which has been Greatland’s plan of attack for over a decade
- go into areas that are perspective undercover, no outcrop and look for large deposits and we were successful at Havieron and we definitely I still say we…
- Greatland is definitely still following the plan at Ernest Giles and there was a bit of a hiatus there because native title negotiations took a little while to conclude but that's all behind them now and the holes have been drilled
- and it was the first look at core from the basement of the Archean here at Ernest Gils and yeah positive signs
- I did notice that they were going to follow up with some geophysics and some RC drilling so it'll be good to see what comes of that as well

* It's interesting because from a retail perspective you want to see these exploration programs happen really quickly but I think it was you that said on a chat with a gentleman that you had a coffee with that it can take up to 25 years to develop an exploration project, is that right?
- well it can do, that's probably the longest time frame
- okay if you for example look at the Simandou iron ore deposit in Africa that Rio Tinto is putting into production at the moment, that has a very long history from Discovery to where it is now still not in production
- and when you compare that to the timeline for Greatland and Havieron it's extremely compact
- 2018 first drill hole and then decline commencement several years after and it's just been a rapid development of the project which couldn't have been done by Greatland on its own
- and to have that joint venture input from a large company at the time really move things on at pace and it's in a good position now to take it forward, there's only a little bit more work to do to get it into production

* Yes okay, thank you… Scallywag gave us a result of 1 meter at 0.83 gram per ton, do you think they're getting closer to finding the source of this mineralisation at Alpha 35?
- we have various targets through the Scallywag license and obviously close to the home is a great place to find new deposits… close to Havieron
- so I think there's a lot of smoke around Scallywag and one of the drill holes as you mentioned did show some extremely good signs of mineralization potentially being really close to something a bit larger
- so yeah I'm encouraged by what I saw at Scallywag

* Awesome thank you, we also had the first initial drills from Paterson South which is the Rio Tinto joint venture but rather than focusing on the result which is obviously only for a first drill or first look… I wonder if you could talk about your thoughts about Sting Ray, Deca and Atlantis?
- yeah I was always jealous that we didn't have that ground because they're fantastic targets, so I followed that one very closely while I was at Greatland
- of course I haven't got the technical information on those targets because I don't have access to confidential information at the moment so it would be yeah it would be really interesting to see what work that Rio Tinto did on those targets
- and yeah I'd love to unpick them and look at the raw data that's been collected just to see how good they are, because I think they are outstanding targets with a lot of potential

* So, what was it… I'm going back on what you just said then… what was it that made you jealous that you didn't have those tenements at your disposal?
- I suppose it was, it was open ground back in 2017 and we acquired the Havieron license from Pacific Trends and I was sitting on the fence as to whether to acquire more licenses in the area based on the geophysics that we saw at Havieron and geophysics that we could see in the very basic data sets further north in the likes of Deca etc.
- and yeah I should have lodged some exploration licenses and secured it before Rio Tinto did but nonetheless it's played out that Greatland has an interest in them now
- so yeah be great to get on the ground on those

* Absolutely, it's encouraging that the managing director says that they look more like Havieron than Havieron, so just more time to wait on those to find out what they what they really hold.
We spoke about the gold price very briefly earlier but I just wanted to touch on it with you, what effect does the gold price have… well obviously it has a huge effect on a gold mine but sort of from your point of view what is the relationship there between gold and a gold mine and the junior miner in exploration and stuff like, are you able to talk to that at all?

- well for Greatland a very high gold price and I must mention that we're at record historical highs over 2150 US per ounce at the moment and that hasn't been seen before ever
- it effectively moves a lot of eyes into the gold space globally you know
- a lot of retail investors will be looking at Gold opportunities, a lot of larger institutional investors will be more willing to invest in gold opportunities and it's good for Greatland and the broader gold mining companies that are listed on various stock exchanges around the world
- the strength in the gold price has been fairly consistent over more than six months now and it looks like it's going to continue
- I know people were sort of a bit ambivalent when it was about 1950 thinking oh it's not going to go through 2000, well it did go through 2000 and then thinking oh it's not going to go through 2050… it did… is it going to go through 2100… it did… it's gone through 2150
- so you know there's a lot it's a lot of momentum now and I think that momentum will follow through to the retail investor looking at stocks to invest in and Greatland is probably one of the best gold stocks you can invest in London at the moment, particularly AIM… it's outstanding

* I've been down the back of the sofa so many times now that I don't think there's anything down there at all, is there any other business that I've not covered that you think I really should? That's a really bad question to ask a guest, I'm not going to lie my writer block was just not helping me yesterday at all when I was writing these questions, so I'm just going to put it to you there… any other business Callum?
- No I think we've pretty much covered it now
- it's a good time in that the share prices at a fairly low ebb but that said, that'll attract people to the good opportunities which Greatland is one of them
- and I think the share price will start to move accordingly

* It's just a matter of time now isn't it, just a little bit more patience and the story will play out
- it will yes, it's a long game not a short game

* Absolutely Callum thank you so much for joining me on GGPHelp TV today, have you any final words for our viewers?
- not at this stage but I'm glad to catch up and always happy to have a chat Liam

* Thank you, thank you very much and until next time my name is Liam and you've been watching GGPHelp TV!
“Study the past if you would define the future.” ― Confucius