Our big vision - a question

[The Doors]

It’s an intriguing strategic question. Does SD set out to be a) one of Oz’s top two - three mining companies by size based on what is known about a Telfer and Hav or b) grow to that size by discoveries, efficiency maximisation, and opportunistic decision making ?

In a sense the decision to reach that scale is the first decision. Do we want to be that company? If yes, press 1. If no, press 2. I guess every shareholder will be pressing 1 right now

Then we reach 1 a) or 1 b).
If it’s a) then SD must be confident that we already have sufficient in-situ prospectivity to achieve scale. The technical choices about declines, shafts, haul roads, train processing decisions, feed from other companies are simpler.

If it’s 1 b) then that is very much riskier but still possible.

It’s a bit of a philosophical question but worth playing with it even if the argument might be you could have a bit of a) and a bit of b). The reason I pose the question is to try and work out what barriers to entry there are for investors right now with the company in this significantly advantageous real-world situation today.

Do the investors think we aren’t precise enough in spelling out our strategy? Are we a) or b) or a bit of both? I believe we haven’t adequately expressed what the strategy is for the longer term. We have some operational and tactical events coming over the next 18 months, but they’re just that - operational events and decisions.

Which takes me to the very first question. What do we wish to become, what is our strategic ambition, how big, how influential, how RICH as a company? And how attractive does that make us to others when we do elaborate on our big vision/strategy.

I’d welcome SD bringing us that big vision soon.

[Hydrogen]

Hey the Doors if it helps, I can tell you Shaun has said he sees Havieron as the 2nd largest producing gold mine in Australia and potentially, at some point in It’s life expectancy the largest mine in Australia.

The market simply doesn’t understand this. Yet.

From there, everything else flows. This is why there is no rush for acquisitions.

[The Doors]

Hey Hydrogen,
Appreciate your comment, have been out all day.
I’m keen to know though if the strategy - beyond plans for the next 18 months and Hav coming online - is explicit enough yet for bigger investors to feel comfortable getting on board for a 5 year commitment. A strategy starts with a vision that says something like ‘becoming biggest Oz gold miner by gold ounces by 2030’ and then for that to be underpinned by annual plans that show how we get there. It could say anything but it’s main purpose is to describe for investors where we are headed, so after Hav comes online what is the next steppingstone towards being (say) #1 Oz goldie.
There is often confusion amongst PIs about the difference between a vision, a strategy, and then plans.
What we have right now (at best) is an interim strategy covering operational plans for 18 months (that’s fine) until we have more certainty beyond the 18 months of big cash generation.
Shaun may not be in a position to tell us that until he has more evidence from the prospects we have that can then inform a 5 year strategy. I will of course wait for it but we should all be expecting to see something and hold the management to that.
Twiggy, Barnaba, Gaines etc will all expect that strategic elucidation as should we.
For the sake of clarity I am very pleased with what Shaun has achieved - who knew we would own the farm ! - and in the same way he joined x years ago with a clear plan to buy back the farm I also expect he is several years ahead in his strategising and it is this I am excited to hear, maybe even by the end of this year.

[strudel]

Shaun is aiming to be the biggest Australian gold miner for certain......

To get there?

He'll explore, I wouldn't say "like crazy", but more "steadily", particularly within range of Telfer. He'll be keen, but less enthusiastic about the greenfield far flung distant tenements. He said himself the chances of finding something when exploration drilling is a lot less than one in ten. That can easily equate to a decade or two of drilling to find diddly squat.

The reward if we do find anything is of course 100% of our own prize and we will have endless cash available to build the infrastructure required - assuming it is far flung from Telfer. Any new mine close to Telfer chucks out FCF a lot sooner when built, getting us to, or keeping us at, #1 Ozzie Gold Miner.

Knowing he won't be patient enough to wait for explanation drilling to find us our next elephant, he will be focusing on underground drilling, initially at Telfer then once the first loop is on the decline having reached the HAV ore body I think a lot of Northern Pod drilling will be his focus.

......I'm fairly sure he won't be in an acquisition mood while the price of gold is hitting new highs routinely. Everything will be hyped up and over priced. I can only see him buying out an exploration minnow if they find something in the same vein as HAV - he always wondered why Newcrest our JV partner didn't buy us out early on at 2p when the size of HAV was becoming self evident.

I'd anticipate a swift move to do a JV for any explorer with world class drill results in Australia, with a RoLR clause of course.....

Otherwise picking around the fringes of takeovers when a major moves in and casts off unloved projects was traditionally his feeding ground at Northern Star, particularly producing assets. I can see that being of interest if we have cash to spend.

The first Greatland corporate move may of course be a mega merger with another Australian miner. If it were a "friendly" merger I can't see Shaun wanting to step back to being co-pilot, and I can see him scrutinizing their portfolio pretty closely and being the one to make the first move, if there is anything in there he likes the look of....

Hemi is about the only project in Australia I think he would like to own at some point. He likes the size and longevity.

Left field musings ......how about Greatland buying out Northern Star in five or ten years time?

And of course like any other company publicly listed, Greatland are always in the international shop window - am I really saying the Canadians might be coming?

I'm curious to see what all these cash rich gold producing miners do with all their money? The answer may sort the management wheat and chaff.

How many will go on a mad shopping spree, lose focus and let costs get out of hand, and find they are squeezed when the gold price finally falls again - to become a distressed asset waiting to be rescued by a white knight in the downturn?

[The Doors]

Strudel,
Your points are really helpful in lubricating the discussion, thank you, and there is much in those visionary thoughts that I was hoping we could bring to the light.
ATB

[leslieby101]

What an excellent thread and gives any current investor much food for thought.

It's these dynamic conversations that feed into an individuals strategy on holding/selling or indeed, investing further.

Thanks chaps.

[The Doors]

Leslie,
So glad you see the value in this. In truth it was spurred on by the excitement about potential dividends which could only ever be speculative and based on what we think we know. I felt that was a fair topic for folk to raise though when, how much, and based on what was still unclear for me.
And with that came the question about what happens beyond 2027 which was a date some mentioned but that’s where I couldn’t visualise the path to ongoing divis. Which is where the vision and strategy become extremely pertinent.
And as you allude to, long term investors need to know that with clarity.
ATB

[Hydrogen]

Folks take a step back :

So I think you are slightly missing the key KING PIN concept... there is no huge requirement to make Jvs or drill Scallywag anymore to keep shareholders 'hooked'. Not anymore... Cash will do the talking.

We own Telfer. Perhaps One of the greatest gold mines on the planet. And basically we won for free in a David v Goliath battle over Havieron.

The high level strategy was to just that - to secure Telfer. THIS IS WHY >>>>>>>>>>>. Because Shaun wants to be King of the Patterson - literally.

At present reported Mill RUN rates, we are producing 1250oz per day (or 37,500 ounces of gold per month). Currently that's $4629 AUD per oz or A$173 million AUD per month. = $110m USD per month. REVENUE in the door OR GOLD DORE WAITING TO TOP BE SOLD.

BUT the really interesting part is that the mill wasn't running full chat. Nope far from it.

SD let slip in the conference call, that he plans next to run the mill 'OVER NAMEPLATE CAPACITY' this quarter. Now Telfer's records show the best performance ever was circa 24mt PA . SO let's assume thats SD's test target ( albeit it could be higher ).

24MT PA is = 67kt per day. or 2Mt per month.

The first shortened December month "Dual train processing operations resumed on the first day of Completion, 1,466kt of ore processed from 4 December to 31 December 2024".

Thats 54kt per day. Now, in my book 54KT P/D to 67Kt P/D is a WHOPPING 24% jump in processing volume.

This directly equates to a 24% increased ESTIMATES (and it could be even more..... Assuming grades hold up... )

There is VERY strong argument we MAY BE SEEING some $136M USD per month coming in.

Unbelievable. THATS £UKP108M PER MONTH.

That is the strategy folks. Print gold from Telfer like there's no tomorrow. Then blow the doors off with a massive new Havieron DFS

Rick Rule said it... It's why he is irresponsibly long Greatland and his statements that Telfer will 'surprise to the upside'.

[leslieby101]

Rick Rule said it... It's why he is irresponsibly long Greatland and his statements that Telfer will 'surprise to the upside'.

Forgive me for removing the bulk of your posy Hydro, exciting as those numbers truly are, however it was this part that caught my eye clearest.

Doesn't he have thousands of followers and therefore, his 'long' comment must have made a few folks take a closer look at Greatland?

[The Doors]

Hydrogen,
I always get a boost from your data and analysis.
I’m trying not to leap into numbers as they are compelling as you contend. It may well be a strategy of sorts which is why I refer to it as an interim strategy.
Taking your invitation up to ‘step back’ the argument about being the Paterson Kingpin are our words, not yet the explicit stated destination- he alludes to it, infers it, all but states it.
So is there a reason why it can’t be stated yet? Stepping back (as I believe we are) and applying cold eyed, dispassionate logic here is what appears to be the evidence in front of us:
- we have a lot of surplus cash being generated
- we have Telfer and Hav as symbiotic assets
- we have a processing unit and prospects all around

So would anyone be surprised one day if, as Strudel (half) jokingly suggested, that we acquire someone else of significant size with all our cash. Or get taken out by Canada?

Without labouring the point any more I feel that any investment decisions by us or new ASX buyers who aren’t mandated would like to see ‘where are we headed beyond Hav /Telf ‘ and it it’s to be Kingpin of the Paterson through stealth then that needs saying out loud.

I beliwve GGP will become an unrecognisable version of itself over the next few years. But if SD and the serious senior board members are only looking to the next 18 months without an explicit growth strategy I for one would be stunned. And accepting the growth in gold prices isn’t a strategy either, though fortuitously we seem to be riding that happy wave.

I am expecting a strategy document to cover beyond 2017 some time this year

[RationalAssessor]

Hi TheDoors.

Not sure that SD is going to set the company strategy to achieve goals which are comparitive to other companies. If I were him, I certain;ly wouldn't do that as I have no idea what the other companies have up their sleeves and cannot control what they do
.
Also, in the gold mining business, I'm not sure that you're necessarily"in compettition" with other miners. The goal surely is to mine cheeper, safer and find replacement orebodies and sell at the highest price in order to give shareholders the best payback.
Taking a look at the website, the "strategy" is clearly set out. I have to admit that I would like to see more focus on payback to shareholders.

[The Doors]

Thanks RA,
‘Aspires to be a profitable multi-mine’ company.
Very much a big tick for ‘profitable’ once the debts are paid, and then when Hav is a working mine a tick for that.
It’s certainly good enough for 18 months or so.

[Hydrogen]

Thanks RA - It’s fair to say that GGP strategy doesn’t rule out a possible acquisition. 100% rules it in.

I just think super important task of streamlining Telfer is a monster job that will focus Shaun’s mind for the first 6-12 months…

After that we may see something more corporate and exciting… But reality check here - what can be more exciting than to be running Telfer… in today’s gold price environment?

Possibly the best job in the oz gold business?

They call Jimmy Wilson ‘the toe cutter’ for a reason.

[RationalAssessor]

Agree that GGP's strategy certainly does not rule out further acquisitions - but if this comes about - I'm sure they will be very disciplined.

As for streamlining Telfer - not sure that SD will be working that problem himself - he has plenty of very capable folks who know what they're doing - it's amazing what a "flat" organisation can accomplish without huge committees snd the ability to make quick decisions.

But I also agree that it's a fantastic situation owning all of the train set, which incidentally removes some the hurdles to the options when Telfer and Hav assets were shared. The potential to trial mixing of ores now is unencumbered by the commercial agreements over ore ownership and subsequently share of profits.

I suspect that it is not only the Telfer deposits which present themselves as a "dripping roast".

ATB RA

[Hydrogen]

You can't mix or blend the hav and Telfer ore due to slightly different metallurgy - grind size and iron content. But you can run two campaigns swinging between the ores - AND - this is where the vision and expertise of a highly motivated CEO and COO and leadership team come into their own...

How do you squeeze maximum juice out of this absolutely huge asset base?

[The Doors]

All of which raises the very interesting reflection about what would have happened to GGP had we not bought the farm.

We would see rising gold prices but couldn’t necessarily have found a route to paying for it without NEM. They would have canned Telfer and Hav would have been tossed on the waves of corporate fate.

Hard to think about that and what would have happened.

Instead of that we have the privilege of musing over ‘what next’ and rubbing shoulders with Croesus.

[PeteJG]

I agree, I think we were low on cash and had limited control evident in the lack of FS and pause in decline. Ggp has migrated to a miner with the skills and focus to extract maximum cash from telfer and extend the mine to fund a serious development of havieron.

I am expecting telfer and havieron to have revised resource estimates and a focus on feasibility studies that extract as much as possible over the next three to five years to fund growth through acquisitions. The price is now right to maximise the revenue from the lower grades. I think that there is a strong possibility that the results from the drilling the deeps over last year will result in a FS to maximise the extraction of high grades to run as a second train and eventually merge with early havieron ore. The funds from telfer (including deeps) over the next two years could be used to build the capability to accelerate havieron and built a cash pile for acquisition. We need to pay newmont a cut of revenue from havieron and newmont will be a significant shareholder. We could be acquired by them but I think Shaun will try and dominate the Patterson, drilling to understand the geology and target acquiring assets from junior explorers that lack resource to mine. Keen to hear more about the long term strategy of which the news over the last year has been understandably lacking. Prior to ASX I expect news flow to improve, sharing longer term plans in detail.

[Rotherby]

A very interesting discussion.

With our good luck in buying the Patterson assets from Newmont, has come the rising Gold price, which hopefully makes it a lot easier to manage and operate the massive operation we have acquired (especially relative to our size at the time of acquisition).

I am happy with the statements to date both on the web site and by Shaun.

I feel that the the company strategy cannot be viewed in isolation of the world in which we exist, for us at the moment all the ducks seem to be aligning extremely well, but with Trump in the White House there is an unpredictability about the world economy. (In this I think the success of the Telfer Havieron project has to be assumed as secure, in the continued conversation)

This brings us to the routes to growing "Greatland".

Exploiting our position in the Patterson, while not at this point secure it is well on the way, in these type of statement I assume that the management (Board and Team) of "Greatland" are good enough to ensure that opportunities will be taken in as Shaun says in a disciplined way', by drill bit, Acquisition and cooperation with other companies, in what ever form.

Shaun's past shows he likes to takeover 'end of life assets' the gold price seems to extend the life of assets owned by majors, hopefully the logic that allowed us to acquire the Patterson assets will mean that projects do become unloved and we can add them to Greatland.

The ducks that are aligning for us are also aligning for other companies, companies that would not of had the clout to progress will now due to the gold price be able to proceed. deposits that would not have been economical will become economical, I am not sure that Shaun will be very interested in projects as a means of development due to the risks involved, unless they are Havieron type projects.

Having added a word of caution, I think if anyone can, Shaun can, develop Greatland into a business that will be eye watering successful, most likely via paths we cannot even envisage at this point in time.

I hope we can all get out of it what we want in a timely manner.

[The Doors]

One other piece of information worth taking account of in terms of GGP’s long term aims/goals/vision is Shaun’s statement that he reset the clock of his time at GGp from year zero when Telfer was bought.

It’s reasonable to expect that from Dec 2024 he has set himself and the company some 5 year expectations and aspirations. He said when he started at GGP he had a rough time in mind for his tenure, but the clock was reset as we became a miner.

That’s another reason why his tenure and a ‘destination’ for the company in 5 years will have been set at least in his own mind. And why I think we can expect a story of th expected journey for his remaining 5 years.

He also said the heavyweight board may be around for another couple of years (from memory) although he wouldn’t speak for them, but their hopes are clearly based on the Telfer/Havieron nexus when the first major tangible point of inflection is reached.

Now they may all stay on if the vision is so exciting that 2029/30 is just the start....

[Redirons]

Hi TheDoors - great posts great opinions - in my mind Hydro’s assertion that Shaun could be the “King of the Paterson” highlights to me that Shaun came out from under the safety of CFO at Northern Star to prove his own self worth as CEO of GGP (a small-time explorer with potential). If I’m right he has assessed where GGP could really end up amongst the pantheon of Gold Mining Companies and is setting in train (with his acquisition of a superb BoD and Team and then 100% of Telfer and Havieron) to provide a legacy that will be hard to match elsewhere. The stars seem to be aligning to assist his objectives (including the PoG) but my God he has grafted and overcome huge pitfalls to get us to where we are now. I pinch myself that Shaun Day came into our lives as I can’t believe there are many with his vision, strategy and drive that could have achieved what he has so far in so little time. Now we await crystallisation of his plans with everything crossed that nothing scuppers him/us out of the blue. Good luck to all true Lthers who have ridden the storm with Shaun at the helm - if he ends up King of the Paterson then we are all truly blessed.