Chatham House rules apply so in that spirit these are interpretations of what was said and can’t be relied upon either for accuracy, are deliberately not verbatim, and are not investment advice. But knock yourselves out
A top 5 gold producer in Oz when compared to existing ASX miners.
The NCM JV was about the most terrible deal SD had ever seen, it became a burning platform and he had lawyers on to it on arrival at GGP. There was no free carry of the 30% and the LROR was dangerous as it applied both ways. The weaker GGP became the greater chance NCM got us for buttons. And the 50m loan from NCM equated to 70m on repayment in June 2029 as they compounded the interest. So paying off the loan as part of the financing of the takeover of Telfer dodged a huge cost.
NEM are polar opposites to NCM. The deal was done around the March quarter 2024 when gold was $1850/oz. At no point did NEM try to renegotiate when it rose. A good company who want it to be a success, not least as there are 500 employees and 1000 contractors moving across.
The deal - 30% discount was more than he hoped it would be but it is accretive to 1.4x (and the SP isn’t far off 7p now). The biggest mining raise on AIM since 2017. Went to significant lengths to ensure PIs were able to participate in the raise - very detailed efforts here to ensure longer holders got what they asked for. I don’t know they could have done much more. But this overall was the best deal we could have got and GGP raised 92% by itself with Wyloo c/f their
8%.
This deal is all about Telfer. That is the cash creation initially. But the glittering prize is Hav. They think they can make Telfer better with some interesting developments and pay back the buy costs within 12-18 months. Hav is a better starting asset that what Northern Star had. Av is the 2nd biggest undeveloped gold project in Oz. Our grade is 50% higher than DeGrey’s which is #1. And we have our own infrastructure! Confident we can become a 10m Oz company with Hav Telf.
Hav AISC in the lowest quartile globally.
A lot of value in the 30m tons at Telfer pile. About 400k oz. Keeping the mill full reduces AISC.
At Hav we’re Au-Cu. Ignore the chat about cobalt. Base metals are greater than the Cu but they want to unpack those and are matters of processing. Nickel and Cobalt are not the focus.
Hav is 13 times bigger than Northern Star starter asset. 125k tons of stope as per SRK report. This Hav ore body just wants to be mined.
500m AUD spent on Hav by NEM.
SD feels exponentially more confident marketing GGP as a producer now we have, from about 1 Nov, full control.
Will the share price catch up with all the good news? March 25 quarter is when serious investors will see a first full quarter of costs and income. The underlying intrinsic value of GGP is greater.
We dominate the Paterson and hold the best ground. There is no hurry for us to look beyond what we currently have (even if we wanted to) as there is no production gap.
ASX within 6 months and cross listing in London also. Top Hat Co streamlines and simplifies. A move to a main exchange? I understood him to say that if ASX and the mandated II buys drive GGP up the ASX league table, having only one premium ranking would be fine if it was Oz but AIM would remain.
Consolidation done at the same time as ASX and any consolidation should not increase or reduce value.
Not necessarily raising funds at ASX time. What is good is the c.200mAUD cash. Hopefully not/never say never to a raise. He alluded to ways of generating money- selling NEM stock ( check).
How can Telfer be extended. The West Zone Deeps are fascinating and super exciting - look at the slide deck re Telfer extension table. It could be possible to get 70m tons out rather than 30m shown. A lot of good grade hits and NCM didn’t drive this along! Some of the best grades seen at Telfer in 20 years and 2 reefs at least, open at depth. And NEM are so good they just keep drilling it whilst we wait for the deal to conclude.
Telfer VSC is a bit lower grade 1.8-2 Au .3-.4 Cu but is near the shaft. That’s 10m tons / 10 years of mine life.
Telfer Mill. Telfer ore is coarser. Hav needs to be milled finer.
So how did the deal get done if it’s so damned good ? Our narrative was that we would go it alone with Hav. But GGP knew Telfer had a lot more to give and actually wanted it for strategic reasons anyway but felt/believed there was a whole lot more gold there too.
Maybe we’ve missed the window for a shaft at Hav now but are interested in conveyors and all this will be in the FS. We will first come out with a much bigger resource for Telfer and get some booked to reserves.
SD feels the BOD are around for a while but not forever. He’s excited to stick around himself.
Hav ventilation drives to be done as first priority. Decline is second on critical path.
Telfer rehab costs are $340m in the expert report and the mine plan for Telfer goes to 2048 so apart from annual repairs of 3-4m the issue is a long long way off
And if/when the deal goes through we become a bona fide producer around 1 Nov.
