Transformed: The New Lens

[Hydrogen]

For many GGP shareholders ... I think it's necessary to reshape your thinking:

Hard, but we have to look at Greatland through an entirely new lens: The company has been truly transformed by Shaun Day. Simply put it's not a 'JUNIOR GOLD developer' anymore - it's a now top 5 Oz (soon to be ASX listed) 'gold miner'. Obviously a HUGE SUCESS from management using extremely clever deal execution and leveraged circumstances.. IMO Shaun Day is yet to be fully recognised by the market for this frankly astonishing achievement (but don't worry, that's still to come). Skeptics are there, after all, to be won over.

To the Old Guard GGP LTH - you know who you are - we have to accept there probably won't be that much exploration news or new link ups/ JVs with far flung organisations for some time (especially with speculative tosh with nothing tangible to offer - ie Wishbone or GBP).

I'm not saying there won't be new drilling; at EG, Scally or Black hills or even Goliath (does anyone actually recall that we had gold hits over there?) I'm, sure that will continue. I think the Greatland's intense focus will NOW principally, and rightly, be fully on transforming Telfer.

Telfer is just a massive proven, former T1, globally significant, gold mine. Transforming it back into a major, highly profitable gold/copper asset is by far the biggest and best and most immediate opportunity for Greatland.

Simply put - It's immediate payback. Every dollar spent at Telfer directly improves our balance sheet - which in turn, directly increases the chances of perfect execution success at Havieron. Telfer pays for Havieron...but Havieron makes us filthy rich.

We ALL know Havieron is this exceptional, massive asset. The delivery of its full development will not only be hugely profitable, but also probably fairly complicated and time consuming from an engineering perspective - transforming it into at 5-6-7mt mine won't be easy. Unless they plan to block cave it. But I assume thats not possible anytime soon ... or at least until we get down 1500m to the base of the Eastern breccia or whatever many years away.

There is a well known adage, within the mining industry - that a junior bringing on a single development asset, as a single asset company, with debt on the balance sheet, is about the most risky scenario in mining. Period. Which on the bright side means, there is a lot of upside from here too (hence the SP roller coaster since the first MRE).

BUT The fact is - we NOW have effectively side-stepped much of that risk with our acquisition of 300-400koz PA gold mine in Telfer, humming away for what? - 2, 3, 5 or maybe even 10 more years, slamming Greatland fully into the 'investable bucket'. Greatland and Havieron are now hugely de risked.

The fact stands, extending Telfer's mine life is more important than anything to GGP shareholders, right now...And TBF probably even more important than another big discovery.. Just look at Hummingbird; two massive discoveries - no method of paying for them.

Over the past few years Greatland just went from being in the 'F**k bucket' (ie almost running out of cash and the 5% debacle) , to the 'chop bucket' - operational success in closing the deal to secure 100% , into the 'investible bucket' (showing a viable journey to execute the development of Havieron) .

For a long time - We were led to believe the narrative that Telfer was running out of gold.

I'm not sure where that came from , probably Gervais and Callum - but we were led to believed that's why Havieron was so critical to Telfer. Which long term, sure, it was... so it was not dishonest... However we now understand Telfer's short mine life was probably more a function of NCMs operational laziness and competition for capital within the group than Telfer running out of gold.

SO - The truth, it transpires was slightly different. Gaining 100% of Hav was critical to Telfer and NCM long term because they saw Telfer as too low grade and as a problem asset compared to Cadia. But the Telfer benefits, timescales (and problems) were not widely understood by us. Shaun day has always said Telfer was ripe for a massive overhaul. Telfer is so big, Day says, it may easily run for another 5-10 years "or like Jundee, another 20 years", if the gold price environment supports economic production. And if better management can address the fixed costs. This will take time but it will happen.

And remember- very large, lower grade bulk deposits like Telfer give you the highest torque to the gold price. As we’ve just seen Telfer makes unbelievable amounts of cash with 20mt running through the mill. Conversely : High grade deposits protect you from downside and bankruptcy. Fortunately we have both!.

I can’t emphasise enough that when I first met SD a few years back how excited he was at the prospect of making a huge efficiency savings as boss man at Telfer - King of the Patterson we joked. He was literally chomping at the bit back then, 3 years ago. He ripped apart and ridiculed the way NCM ran things at Telfer with that "stupid little black NCM book of theirs called "How to mine gold” ...from the 1980s, that they still followed, to the letter". That's just how they did it... stuck in a time warp or whatever.

At the time, his pipe dream had no context, because I don’t think I/we believed he could pull it off - it was like a slightly outrageous childhood fantasy or something. How could GGP possibly buy Telfer, and Havieron?!? - Well - just look at how the cookie crumbled.

The lesson? Don't ever underestimate Shaun Day.

And the cash - I mean $89m USD in the first 27 days - clearly facilitates a low risk pathway to a full scale GGP controlled DFS development of Havieron (ie not a 2 or 3mt operation but a 5-6-7Mt gig) Once production is executed, other opportunities such as Antipa will be considered to fill Telfer AS REQUIRED. Reality is, today we are a long way from that IMO.

Interestingly also, today, was the Money of mIne Podcast where GGP headlines the show and they obviously like what they see in this shortened quarterly... so it's well worth a watch: https://www.youtube.com/watch?v=GuFzzLYV-lI

But also Matty Michael, the ex miner discussed something totally new: - pretty crucial fresh NEW intelligence that I haven't ever heard before :

Apparently there is gold everywhere {at Telfer} and at some point there was once a high level plan to mine the whole zone between the main dome open pit and the the west dome open pit and underground. That's an absolutely massive opportunity to contemplate but presumably the 2016- 2018 gold price most probably precluded it...

Hello $4400 AUD gold my old friend... Total Game changer at Telfer. Like Shaun says "there has never been a better time to own Telfer". Watching his disciplined approach to capital allocation will be an education, thats for sure.

Also of note - Ali was flagging that if we're domiciled in Oz then wouldn't need FIRB approvals for future M&A deals..

The next key transformation I expect will be a steady re-rate to match up to our Australian peer valuations, such as Evolution and Degrey,... IMO GGP is way better near term, and will become a top 4/5 Australian gold miner and maybe a top 2nd /3rd Australian miner over 5 years:

I can guarantee that re-valuation hasn't happened - yet - and it is going to be quite a ride.

Enjoy ;0)

[Steveharris52]

Hydrogen,

Many thanks for taking the time to provide this analysis. I get so frustrated with the numerous I’ll thought out posting# on various chat sites p, that it comes as a welcome teller to read your (and Bamps, Paddygall etc,) contributions. GLA

[Redirons]

Yes - thanks very much Hydro - you have been a guiding light along with Bamps, Paddy, Dip and a few others I could name. You have always tried to state it as it is and added your opinion which has been a huge help to the likes of me who might know a fair bit about investing but admit to knowing very little (at first) about precious metal exploration and mining.
I wish all of you knowledgeable posters a wealth of success and happiness - thank you very much as we now embark on the fulfilment of transitioning into a Top Aussie Mining Operation

[Hydrogen]

Thanks guys - What's also perhaps most interesting and relevant about Telfer is another well known mining adage :

The lower grade, but very large bulk tonnage ore deposits give you the highest torque to the gold price.
Whereas High grade deposits keep you solvent (during gold price downturns).

Fortunately we now have both.

[HopefullyGold]

Cheers Hydrogen, wish you had been on lse the last 12 months dealing with the doom merchants which imo were installed disrupters for the likes of the institutions… but again I know nothing

[Hydrogen]

Just listening to that call last night - https://webcast.openbriefing.com/greatl ... r_id=55942

It's so good to hear Shaun answering to proper bigwig Australian analysts, like Daniel Morgan, (just as Sandeep used to). Except notice Shaun's so relaxed in his element - he doesn't defer to anyone - he knows this show inside and out.

Same language he always used with us, but in this area, it felt different : more informed and more heavyweight! He’s clearly and genuinely so excited and positive about Telfer. And responsive too, raising and covering off all the questions we asked him to address, in the opening and in closing remarks.

I couldn't ask for a better CEO. Key Points for me :

20% more stockpiles than expected ie 11 MT high grade confirmed in the call and exactly 509k ounces of gold in surface stock piles plus the copper! WOW!!!!!

That’s exceptional: essentially a $1bn cash balance - with very minimal handling costs. Ignoring the copper, revenue on just the stockpiles is $1.2 Billion ie around 50% more than our present mcap… and key we replaced 730kt of ore mined in the period - while they processed 1.5kt. So almost 50% ore replacement in the opening month.

So with circa $1.36 Billion in cash net, sat at surface, Shaun goes on "there's probably 20moz endowment at Telfer”. "The stage 8 and 7 cutbacks are ready to go…. V Low strip 1.2 :1. so cheap to mine. Higher up ratio probably 3:1 ( De Grey is like 6:1 )

"SO No Capex relatively low cost mining run of mine material"... Check out this slide - the Orange areas area ready to go - and note stage 7 :

I've just noticed the stage 7 cutback in the EPA permits is for 9mt

https://geodocsget.dmirs.wa.gov.au/api/ ... kf3sn6rwer

so absolutely huge amounts still to come - that's another 7-9 months processing... new material added to the existing $1.2bn inventory. ... so surely that gets us to $2bn in cash received region ...

OF NOTE - On our current daily run rate ( assuming they can maintain this 34koz pre month run rate ) I make it that we're making 1200oz equivalent per day and earning GGP some $3.2 million USD per day (at $2700 USD gold) .

Just think how big a deal rasing $10m or $20m was to drill out scaly or fund Hav development.

Today - we make $30m in revenue in just 10 days We’re literally going to print more than our present market cap in cash this year.

Let that sink in folks... Any sellers at this level are totally nuts. The new Telfer resource is going to blow the doors off.

[Rotherby]

Good post I don't disagree at all, but....

I prefer to see the figures taking in the costs of production AISC (estimated if required) taken into consideration.

So Telfer mined ore as the stated AISC which I think will be conservative as we have very little infrastructure costs to get at the ore on the cutbacks.

The Stock piles have a considerable lower AISC as we have no mining costs so the Havieron AISC will be a conservative figure for this ore.

Using figures of this nature we get very near to a real profit figure for the operation.

Really looking forward to the new information as and went it is released.

Big Smiles for 25, and 26, 27, 28

[Hydrogen]

Yeah figures will come …

I suspect they haven’t had the runway yet to produce an accurate AISC so no point providing guess work. I’ll bet they haven’t even got a full shipment of concentrate at Port Headland yet….

Maybe some one has a view on that.

And the beautiful thing about this acquisition is there was no ramp up. It went into immediate steady state production at nameplate capacity…. 15minutes after ownership … I mean WTF!!!

What situation does that ever happen… to a junior miner….? Production Ramp up is always fraught with issues and setbacks.

Nothing short of an exceptional performance from Greatland.

[‘96dc2]

Be interesting to get a plan on exactly where the cash flow will be spent. I’m sure Hav will use a good portion to get on line. At what point do they issue Dividends?

[Michael]

The April 2025 update will include a full year 2025 projection/forecast. That will be a massive moment for GGP.

They will be reporting a full quarter's operations which will be extremely detailed. And also provide a 9 months forecast.

I am excited to see the Broker updates in April. If 19pence is the latest target price following the December 2024 update then I expect over 20pence a share target price in April !!

Other key 2025 catalysts to look forward too are:
- the Telfer mining plan and resource update due around April,
- ASX cross listing within the next 6 months,
- the Havieron Feasibility Study due later this year, about 9 months away,
- June 2025 quarter results due in July,
- Sept 2025 quarter results due in October.

[Lennie]

Well Hydro you are certainly on fire just now .. oh and for info I posted your initial observation on Telegram and it was very warmly applauded .. so a big thanks from us all

[Stebol]

Morning Hydro & everyone

I read the post and thread this morning - interesting stuff. Went for a walk and my tired old brain starting whirring so obviously a thought provoking thread as well.

At the risk of looking like a numpty (thinking out loud is dangerous at the best of times), a couple of things occurred to me that others may have a view on.

So, we know the initial 15 month mine plan for Telfer had estimated production of 426koz gold equivalent. But we now know there is 507koz stockpiled so that's all good.

AISC was estimated to be US$1454/oz. I was wondering if the AISC figure takes in to account the stockpiled ore or is that the estimated cost of processing 1oz from start to finish? As the stockpiled ore has already been mined, could the actual cost of production be significantly lower than this?

I realise we'll find out in due course but wondered if anyone had read or seen anything that could clarify this.

Either way, very exciting times ahead.

[Irish24]

Hi Stebol,

Shaun said on an interview, I think the Proactive Investors one, that there were no mining costs for the ore at surface.

[Rotherby]

My take on the situation is that we should not look at production as the first thing.

It is the profit that we get from the production and the value if processed of the stock piles.

On Production I have worked with the figures published of $1454 for ore put through mill in December, but I think that this is an inflated value as the ore processed for the fact that Greatland are a slimmer company than Newmont, I feel sure that the Greatland management will have also ran a tight ship again reducing the costs on site, meaning (IMO happy to be corrected) that the use of a maximum gold price is realistic, as the $1316 is a realistic profit level from what we know.

With the Stock piles I have used the Havieron AISC as the cost of dealing with these will be considerably less than the cost of mining, transporting and processing the Havieron ore. Albeit that the quality of the Havieron ore will require a lot less processing (IMO happy to be corrected) so with our unlimited information this figure should be a good approximation, most likely a conservative figure.

[Lennie]

Production will continue or we run out of ore .. that gap between Telfer ore and Hav ore has to be filled . But yes the stockpiled ore will reduce the overall AISC what that is we don't know yet .. but even at $1450 it's still exceptional in todays gold market . IMHO

[Lennie]

Production will continue or we run out of ore so thst will affect the AISC, plus that gap between Telfer ore and Hav ore has to be filled . But yes the stockpiled ore will reduce the overall AISC what that is we don't know yet .. but even at $1450 it's still exceptional in todays gold market . IMHO

[Irish24]

Hi Rotherby,
Interesting figures and great we are all talking about actual production costs rather than exploration maybes.

Isn't the $1454 the usual Telfer cost?

Shaun said the ore at surface has no mining costs, the figure is therefore for processing and should be lower.

Or am I missing something?

[Luxpagain]

Just looking at the above calculations and they seem to be using the contained metal numbers.

Don’t they need conversion rates applying as well or have I misunderstood?

[Rotherby]

Hi Rotherby,
Interesting figures and great we are all talking about actual production costs rather than exploration maybes.

Isn't the $1454 the usual Telfer cost?

Shaun said the ore at surface has no mining costs, the figure is therefore for processing and should be lower.

Or am I missing something?

You are right the $1454 figure is the figure that was quoted in the documents, but it is not set in stone, as Greatland implement improvement to processes and as Shaun has said, Greatland do not have to run the Telfer the same way that Newcrest and Newmont have, and inferred that there will be economy in this, which is why I am happy to use a high Gold price with the $1454 figure and the calculations are still conservative.

Again you are right that there are no mining costs to the stock piles, so by using $818 again it over covers the costs and I think all my figures are Minimum profit figures, so very conservative.

To Sum up Happy Days

[Rotherby]

Just looking at the above calculations and they seem to be using the contained metal numbers.

Don’t they need conversion rates applying as well or have I misunderstood?

Happy as always to be corrected, as I understand it AISC is the cost to produce a single Oz of Gold therefore by subtracting from the spot price we get the surplus/profit per Oz. The Spot price is high but I also think that the AISC is higher than it will be under Greatland Management.