New note from Asymmetric Research 15/05/25
Posted: Wed May 14, 2025 12:45 pm
Greatland Gold (USD2.4bn market cap)
UK-listed gold miner and developer in Australia, which will also list on the ASX next month. Greatland Gold (GGP) operates the low-cost Telfer gold mine it recently bought from Newmont. As a reminder, Newmont had inherited Telfer in its acquisition of Newcrest. In addition, core to the GGP story is its development nearby of what looks to be a world-class gold project, Havieron (8Moz geo), which would utilise the existing infrastructure at Telfer; notably its significant and hungry 20Mtpa processing plant. Once operational in 2028, Havieron will have the potential to be a 30y+ mine, in our view. We expect GGP to become a consolidator in the Paterson region in Australia.
The company is in net cash and should generate >USD200m of FCF pa from Telfer this year-on and over the next three years at least we estimate at a conservative gold price of say USD 2700/oz. In other words, at that gold price, GGP can more than self-fund Havieron to production. At spot gold instead, GGP would also be left with > USD1bn of excess cash in 2028 (>40% of current market cap). Just for reference, given this is such a low-cost producer and developer, we think the stock presents upside even in a very low gold price scenario of USD 2300/oz gold in perpetuity. In any case, the company has put options on c40% of volumes over the next couple of years at a gold price of USD 2600/oz – protecting cashflows from any gold price downside yet keeping the upside unhedged. All in all, at this share price, you are getting Havieron for a cheap implied value of cUSD 100-150/oz.
The bull case upside presented in the chart assumes USD 3500/oz gold, and 1.3x NAV multiples on the two key assets. Not unrealistic since gold miners traded at to 1.7-2x NAV historically.
Key catalysts:
1) Quarterly results confirming the solid operational performance tendencies delivered at Q1 at Telfer and delivery of guidance.
2) Upgrading the category of the inferred resources at Telfer (c1.7Moz).
3) More resource discovery / consolidation.
4) ASX listing
https://asymmetricresearch.substack.com ... irect=true
UK-listed gold miner and developer in Australia, which will also list on the ASX next month. Greatland Gold (GGP) operates the low-cost Telfer gold mine it recently bought from Newmont. As a reminder, Newmont had inherited Telfer in its acquisition of Newcrest. In addition, core to the GGP story is its development nearby of what looks to be a world-class gold project, Havieron (8Moz geo), which would utilise the existing infrastructure at Telfer; notably its significant and hungry 20Mtpa processing plant. Once operational in 2028, Havieron will have the potential to be a 30y+ mine, in our view. We expect GGP to become a consolidator in the Paterson region in Australia.
The company is in net cash and should generate >USD200m of FCF pa from Telfer this year-on and over the next three years at least we estimate at a conservative gold price of say USD 2700/oz. In other words, at that gold price, GGP can more than self-fund Havieron to production. At spot gold instead, GGP would also be left with > USD1bn of excess cash in 2028 (>40% of current market cap). Just for reference, given this is such a low-cost producer and developer, we think the stock presents upside even in a very low gold price scenario of USD 2300/oz gold in perpetuity. In any case, the company has put options on c40% of volumes over the next couple of years at a gold price of USD 2600/oz – protecting cashflows from any gold price downside yet keeping the upside unhedged. All in all, at this share price, you are getting Havieron for a cheap implied value of cUSD 100-150/oz.
The bull case upside presented in the chart assumes USD 3500/oz gold, and 1.3x NAV multiples on the two key assets. Not unrealistic since gold miners traded at to 1.7-2x NAV historically.
Key catalysts:
1) Quarterly results confirming the solid operational performance tendencies delivered at Q1 at Telfer and delivery of guidance.
2) Upgrading the category of the inferred resources at Telfer (c1.7Moz).
3) More resource discovery / consolidation.
4) ASX listing
https://asymmetricresearch.substack.com ... irect=true