Notes from LSE Q&A regarding Havieron funding , Board appointments and GM voting - 29 Sept 2022
Interview:
https://youtu.be/ykVrZ2YXiIE
Earlier notes from unstreamed Q&A:
https://www.ggpchat.co.uk/viewtopic.php?t=551
RNS re. funding:
https://polaris.brighterir.com/public/g ... ry/xegzdjw
RNS re. appointments:
https://polaris.brighterir.com/public/g ... ry/xpn9qjr
RNS re. options:
https://polaris.brighterir.com/public/g ... ry/wvj1kvw
Created from a messy YouTube transcript export
* London Southeast Q&A session with Greatland Gold managing director Shaun Day, for those of you who don't know me I'm Donald Leggett head of investor relations at London Southeast and I'm here today to put your questions to Shaun, Shaun spoke to a room full of Greatland Gold investors yesterday (28th Sept) and we're here to try and cover the same grounds today, thanks for all your many questions and I'll ask as many as we have time for and I'd like to start with a perhaps a simple question but an intriguing one nonetheless, it's about the Paterson region. I was having lunch with the CEO of Orissa mining Brad George the other day, just to name drop and he mentioned how unrelentingly hot that Paterson was, tell us what's it like exploring for gold or constructing a gold mine in those conditions and how do the seasons differ out there?
- hi Donald and thanks for having me on the program again, look the Paterson is is regional even by Australian or west Australian standards it's it is a reasonably remote area, it's north west it's north of Western Australia so you typically have the summer associated with rainfall events to the extent it does rain it's not a huge amount of rainfall, so really what we end up doing is actually typically suspending drilling through those really kind of peak summer.
- December through February, you can still do it at Havieron because you're supported by full Camp there you know, people can go back and you know eat well, lots of you know ability to rehydrate and everything
- but in terms of the like more temporary exploration caps just from the health and safety point of view we now try to run you know an eight to nine month drilling program just to manage their conditions for our team.
* And how hot is it actually there?
- Oh look it can vary but I think Marble Bar which is kind of on the way there is where they they've got record whether any you know records for you know 100 years is I think one of the hottest parts where it is I think the hottest part of Australia so it regularly can be in excess of 40 for multiple days in a row or notwithstanding I've been in London on a 40 degree day but that can be a bit more regular up there in the Paterson so it's a really dry part of Australia
- there's no personal leases up there which perhaps tells you what a dry part of the country it is because most of Australia, a lot of Australia has you know rangelands with pastural leases, those pastural releases were given up yeah a long time ago just because it's not a great environment to year round which sticks is a beautiful part of the world but dry.
* Oh no I've seen the pictures it is really beautiful isn't it and which takes us to Telfer itself it's a mining town created by Newcrest so did anything exist before the you know the you know the mining complex came along and what is the success of Havieron mean for the inhabitants of Telfer?
- well Telfer was a town but it's not anymore so although once upon a time there was a supermarket School post office Etc there, I 'm going to say in about 1985 or something they or maybe a bit later that maybe it was ‘95. they switched from a town to a FIFO, so effectively there are no families to my knowledge left in Telfer
- in fact I'm almost certain as not, they're now all back and that Workforce just kind of flies in for a one or two week shift and then flies home, so I think that's just been the evolution of mining in Australia where it's really gone from Telfer where there was nothing, a town created around a mine but what you've seen is that's no longer the case it really has transformed into a fly-in fly out where people and their families still live in or where they want to live but let's just say in Perth where they get access to better Education, Health and other community services and you know support and then the person in the family who's working at Telfer will fly out for that defined journey and then come home for off shift.
* Well that was a random question but that was not a random answer absolutely fascinating thank you so much, who would have who would have thought okay so interesting it's like the oil rigs here where you're flying you know it's two weeks in and two weeks off, you're flying and fly out absolutely fascinating.
- the old Supermarket there is now the kind of the terminal where you get on the plane so you see the history of the Old Town there but it's now uh what we call a FIFO work site which most mines are in in Australia now.
* Okay now I thought your mind would be turning to the GM resolution and we've got three questions, uh talking about that resolution and I put those they're a little bit analytical so but I put those at the top because I thought you'd want to deal with those quite smartly. John H wants to vote basically, wants to know how to vote and he thinks he's gonna vote by getting in touch with you is that the right way for him to vote, he's got a million and a half shares he says and he wants to vote them in the favour of your resolutions?
- look you know London's a little bit different to Australia where you can vote direct, mine a lot of people hold their stock through Brokers or nominees you need to contact that nominee to vote
- by all means you can try to contact info at Great London, we'll seek to assist but really all we will princely be doing is referring you to who the nominee that holds your stock and they'll have their own rules for how they do that I think what's very different in London compared to Australia where Australia you directly send out voting forms to every shareholder direct here you send them to those nominees
- they are not necessarily required to send them on to the underlying shareholders and my understanding is they typically only do it on request which is a bit different to Australia but that's your London system.
* Okay now I thought your mind would be turning to the GM resolution and we've got three questions, uh talking about that resolution and I put those they're a little bit analytical so but I put those at the top because I thought you'd want to deal with those quite smartly. John H wants to vote basically, wants to know how to vote and he thinks he's gonna vote by getting in touch with you is that the right way for him to vote, he's got a million and a half shares he says and he wants to vote them in the favour of your resolutions?
- look you know London's a little bit different to Australia where you can vote direct, mine a lot of people hold their stock through Brokers or nominees you need to contact that nominee to vote
- by all means you can try to contact info at Great London, we'll seek to assist but really all we will princely be doing is referring you to who the nominee that holds your stock and they'll have their own rules for how they do that I think what's very different in London compared to Australia where Australia you directly send out voting forms to every shareholder direct here you send them to those nominees
- they are not necessarily required to send them on to the underlying shareholders and my understanding is they typically only do it on request which is a bit different to Australia but that's your London system.
* It's a bit disconcerting because normally no one gets in touch with you. I contacted Hargreaves Landslow directly I voted my shares directly on their platform and I went to the corporate action instructions it dropped down so it was quite hard to find but then quite easy. Once I'd done it I contacted them told them what I wanted you know what was happening the GM resolution and that I wanted to vote a certain way and they emailed me back said done you've voted so I would advise get in touch with your platform and then they'll take it from there.
- yeah and we're really keen to be fully you know to get that funding squared away so people should vote, you know what do they say you know vote early and vote often, so yeah we would love the support for those resolutions.
* Fantastic, Mike L asks and it's quite a long and complex question so let's quickly rock through this question concerns resolutions three to five at the general meeting and his concern is further dilution. So he wants to know what specific circumstances would invoke those resolutions, purchase of a near-term or actual Revenue generating asset to purchasing an asset financing a takeover of smaller producer perhaps, he's not keen in more dilution, he thinks you've got enough licenses and he'd only accept an investment opportunity utilizing 3-5 that added quickly to our cash flow and his question is do you agree?
- well firstly I think the resolutions we're focused on are one and two you know to be to get the funding complete three four and five are effectively a replica of last year's AGM and will be again replicated at our 22 AGM
- I think best practice is to refresh them every time you go to shareholders, we've just raised equity we've told the market we feel we're well funded we have absolutely no intent to go out and you know to issue additional equity
- you know we … I've talked about previously wanting to implement a dividend because you should not look at equity as free, it's there's a cost to it and paying a dividend is a way to recognize that cost just like you would pay interest on debt so I like the discipline of a dividend for that reason and respecting equity
- I think it's good to have that in place though it's recommended by both ISS and Glass Lewis both the governance firms to support all five resolutions, but including those three because they are considered best practice to have them in place but really that's just there as a contingency saying really you'd expect it to be there every time
- we don't have plans to use it, yeah our Focus right now is getting the feasibility study in into the market, we think we've got fantastic growth with Havieron, having said that you know I we do look at opportunities if one came along but I don't think there's anything kind of imminent there that I would be flagging to the market particularly inside the time frame of the next AGM.
* Great now within that answer which was a very clear Jonathan E’s question has been answered so I've got three questions about the GM and Jonathan E one has just been taken care of so well done thank you very much for that, now you yourself have received many questions and we've received a fair number too and out of our questions, 11 are what about the share price so this is this is and they're pretty much of a of a muchness and Bruce R says hi Shaun do you think the present share price reflects the true value of Greatland Gold?
- look well no I don't you know to give a very direct and clear answer
- in a more broad sense look I focus on what I can control and I think that's you know the share price is fundamentally driven by market and sentiment and all the things happening in in the market that can influence that
- I'd like to think what we've done over the last 12 months positions us to have a higher share price
- now removing funding uncertainty, removing the uncertainty of the option, building the team bringing in debt that should amplify returns to equity holders that are all supportive of a higher share price and I like to think that in a different Market sentiment that would be more fully reflected
- but the market sentiment is not super strong right now, - yeah if you do want to feel bored about owning Greatland stock have a look at a Great British pound gold price chart, it's the highest it's ever been, so you know there is some real positives there and in an Australian dollar sense it's also a very good price
- but having said that look we think there is a a huge opportunity to unlock the full value of Greatland, I often talk about it in this three-year cycle, in 18 months’ time we'll be in production I think that's a tremendous de-risking event and should be reflected in in a lower risk assessment which means you should be able to attribute more values to the company
- 18 months after that we're at kind of that full production on that Southeast Crescent of three to four hundred thousand ounces per annum unlocking really strong free cash flow I would have thought that's another really significant de-risking event, hopefully in that same three-year period you'd expect a pre-feasibility study say to come out perhaps on the Eastern Breccia kind of bulk mining or block cave option and I think that would then show the full opportunity at Havieron and perhaps really take us to the next level of value
- so I think there's a really beautiful growth and value proposition ahead of us, do I think the market fully captures that now, No.. but I think it's always a confluence of markets sentiment and the activity that the government takes and if you have a look at our performance compared to our peers the charts all look pretty similar but I think we should be outperforming, one because of all the de-risking activity we've done around funding and two we're also 20% copper so that should give us greater diversification and we should outperform gold only, not sure we've really seen that but that's my job, that's why I've been going around talking to institutional investors for the last two weeks and that's why today I'm meeting with a number of retail shareholders
- I met some more retail shareholders this month, yeah I'm trying to leave no stone unturned to support the share price.
* Okay and it's probably worthwhile name checking a lot of these people because they've been very nice in the way they ask the questions but I'm sure they're a bit you know it's not the nicest place to be when you're underwater in a chair so let's name check Keith A Tina M Chris T Greg Y Lyndon D Michael O John C Neil B Sharon A Steve G and of those the most intriguing John C he says I've persuaded a friend of mine to buy in when the price was 38p, do you think he'll ever make a profit which is not the easiest of questions to answer I don't think but there you go that sort of get you get a flavour of all these questions that they’ve asked?
- yeah look I don't think it's appropriate for me to make share price predictions but what I am happy to kind of say is kind of reaffirm what I just spoke to I think over the next three years there is a pathway to understand that there would be de-risking that understanding that future cash flows I think investment theory tells you there is a negative correlation between risk and return, the higher the risk the well sorry positive correlation in in that you'd expect a higher return at higher risk so IE a share price should be low when you perceive it to have high risk, when it's perceived as low risk the share price should be higher because people should have more confidence in those future cash flows
- so I think there is a pathway to showing a significant de-risking at Havieron and that should.. investment theory would tell you be supportive of an appreciation in the share price and I think the magic of leverage and the quality of the team we have I think should give people confidence in our ability to deliver that but also confidence that that should amplify equity returns.
* Okay let me ask you questions about the new board and if I could summarise all the bits that are not included in the questions that people are overwhelmingly positive that you've got a high quality board so no doubt about that but nevertheless people are drilling down and into the detail and it's about the share options and you know that how they're how they're remunerated and whether we're going to get as shareholders we're going to get value for money so let me let me.. Simon B asks the three new board members come to GGP with luxurious backgrounds and enviable track records, truly they are the masters of the Australian mining universe so well done Shuan, can you give some greater clarity around what we can expect that we evaluated contributions from each of them (and the wonderful Dip S who asks brilliant questions well done Dip) top class pedigree he says but how can we ensure that performance in ROI will be measured rather than them enjoying a production re-rate passively because as you say in 18 months, we go into production and the share price will kick on so how do we guarantee that they will actually you know push the share price up for us as well as it just simply happening organically?
- well let me answer that in in three parts and thanks for the question I think you know when you look at the calibre of this board that we've put together it is exceptional it it truly is I think it you know it's reasonably I think we stand out as an entity with having the quality of board that we do and I think it also one of the reasons I was able to attract such a quality board is because of the quality of asset that we have
- when you know I really sat there with a blank piece of paper and thought who I would like to join the board, Mark Barnaba kind of was at the at the top of that list I literally started conversations with Mark in September 2021 so it wasn't yeah a quick process but it was a really valuable one and I think I would add like through that period I've used Mark as a sounding board through a whole range of events that Greatland has gone through around the option process the funding in engaging with institutional investors and indeed why Lou so I think you know to some extent having this calibre of people as a sounding board over the last 12 months has already been extremely valuable to me and so and I want to recognize the role that the existing board does it you know as well in that regard
- but yeah I think Mark's strategic Insight is exceptional similar with Elizabeth, her operational experience together with kind of financial background is you know an incredibly powerful combination and then you've got Jimmy who's coming to our office a number of times even before starting has gone through the project with our technical teams and myself he's you know heavily engaged in terms of with the technical insights that he can provide and it's a good discipline for us to go through them with Jimmy who's also got an enormous amount of corporate experience so really I think what we've got is these beautiful skill sets somewhat overlapping but each bringing something different to the table to give us a very well-rounded complement of directors
- and I think all of this goes to… it's not a guarantee of success but I think it increases the probability of being successful and increasing the probability that will make the most of the opportunities that we have both with the existing asset base but also with opening opportunities for us in the future.
* Okay Sally J takes it takes it in another direction and she says can you confirm remuneration for the three new transformational appointees just announced and then the secondary equation can you confirm the current level of annual cost for salaries and administration costs?
- well yeah there's probably more to add in terms of you know just around out. I think the wind.. the doors that they open for us having a board of that quality in terms of being able to pursue extra opportunities I think should not be lost on people I think also in terms of the ability to attract capital
- and I think even when us being able to close the bank debt being able to attract the high quality of Institutions that we did the Wyloo etc., perhaps those directors have already contributed hugely to our success because the funding package was critical and be under no doubt it was all announced at one point in time and all three of those supported each other
- so I think the value of that board I think is already demonstrated but I think it goes on into you know their main form of renumeration is the options
- look I think that's great alignment, they need to increase the share price for more than 45% from today's price but up 45% percent I think we're all doing well if that is achieved
- yes you can talk about how do we know that individual has contributed to the team outcome but I think to some extent the team works well if it's well led the team works well with if it has the right strategic capability I think there's no question about the calibre of those people
- and for me to be able to work with those people to be able to have a sounding board to be able to generate our strategy together I think it's undoubtable that our organizational capacity has been enhanced which should lead to better outcomes
- in terms of our G&A cost it's relatively modest, I've built the team make no apology about that we could have not have gone through that option process we could have not have prevailed in that option process unless we had all the component parts that we understood the geology the resources geology the mining engineering the processing the legal ramifications that we had the finance teams bring in the debt
- mines are not free to create a 35-year cash flow generating platform we need the team that can amplify that I think our G&A costs have been very modest they continue to be modest I think really what we're trying to do is first and foremost we make sure we're fully funded for Havieron and then we can think about you know what other augmentation we need
- but I think we have a small high quality team and I think that will continue to be our focus.
*So good value for money you think?
- I think exceptional and I think to achieve what we've done this year and you know to some extent I get to be at the front of that team but you know again make no mistake I can't do that without a really strong technical team supporting me
- I can't do it without really strong strategic advice, without good legal advice without good commercial you know Chris Toon our CFO you know took a huge amount of the weight running the financing process
- I enjoy running those processes but that option process was pretty consuming as was buying equity as was you know engaging with you know finding the best calibre new directors that we could so yeah it's it takes you know it takes the full team to be successful and I think you know I've spoken about this before my greatest achievement was probably in 2021 setting the foundation setting putting in place a team that could give us the opportunity to be successful.
* Okay fantastic, there is a question from somebody and I can't quite find it in the in the time frame who says well where do the gaps, you've got a fantastic team, are there any gaps there that you would still like to plug into Phil an apologies for not being able to name check them.
- yeah no well thanks for the question nonetheless the I think I think there are a couple of positions I think around investor relations and kind of business development that is something that hasn't been absolutely core to us
- I've you know probably handled a lot of that myself in the last 18 months but I think you know we want a strong share price we want all these things and I think having someone who's more focused on that and can be available to engage and think about how we present our narrative to the market and how we prepare internal data and how we communicate that and how we analyse our own business I think is something
- so I think another couple of really high quality people around that aspect would probably round out our team in the present asset base so it's again a small number of high quality people, we talked about the board before and I want to link this back we are more of a destination than we were a month ago, I think we have a good culture which attracts people I think we have a good asset that attracts people
- but having some really you know exceptional high calibre people on our board with big brands in Australian mining but just in Australian corporate sphere or space does attract high quality talent that want exposure to those people and the opportunities to get come with it
- so I think a couple of people we're not going to have , building you know a massive army of people but a couple more I think would round out and perhaps put me on a more sustainable footprint which would be nice too.
* Okay those are the big blocks of questions dealt with, on to something interesting undoubtedly interesting but slightly more random questions from here on in and a straightforward one to start with Mickey asks when's the earliest production could start at Havieron?
- well wouldn’t be an interview with you Donald without scanning in some left field questions but but it's great that you work through all the questions that we've had
- I think in terms of you know first production our guidance is towards that early 2024 I think when you look at the Run rate and the acceleration of the decline you know I think that's a very achievable so I feel really good about that
- look I wouldn't want to kind of suggest that it's going to be any earlier than that but I think we should have some increased confidence around that look we can always take a more conservative view on it but right now I think the accelerating meters that you're doing if you look at the last quarter of productivity you just see that it's working well and we've seen that the face has moved to full blast, which again is all part of the accelerated and more efficient and productive development.
* Okay which takes us to Richard S and he says when the decline reaches the ore body, development will immediately begin in the ore body casting out the SLOS stopes producing development ore possibly in the second half of 2023 and he makes you know interesting point is it reasonable to expect development golden H2 2023 resulting in significant revenue from sales you are the man who knows?
- so it's a good question by Richard and you often do see that flow through like my own view on this is we have an existing Mill which is currently being fed at Telfer through it's ore, I think if you are a single deposit new mill you're looking for some development and commissioning or you often put that development ore through
- it's really inefficient and expensive to do that because you're only running the mill at a fraction of what you would normally do but you're partly using it for commissioning of a new mill
- in this case we have a mill that's been established for 35 years I would think it's more likely that you'd stockpile that
- we're not going to be using the full capacity of that mill, we have surge capacity so to speak so I would have thought it's more likely that you would stockpile and build up to you've got a more economical quantity of ore to put through which I think would be more likely to be associated with those first stopes in Q4 2024 so although you would have the potential to do that I don't think would actually optimize the cash flow from Havieron in the first 12 months by doing that approach
- so I think I'm kind of Richard I think you should more think about it starting with once we begin stoping albeit having a bit of a ROM stockpile of development ore is a positive thing.
* Okay good answer Mike H, if we go here's your question, great welcome to finance anxiety says so people are not all born and grown some of them are very happy (note: hard to make out) in view of the current share price investors need a bit of a boost, do you plan to prepare an updated MRE before the feasibility study is published by Newcrest, I mean you used that as a device once, will you do it twice?
- thanks Mike for both elements to the question so thank you around the debt I think it is outstanding in terms of the MRE just to my mind we didn't put out an updated resource just before the PFS, we did it afterwards to show this is a good PFS albeit it showed what Havieron was like 10 months earlier and it only showed part of Havieron
- and I think we hopefully communicated that message well I think we'd be unlikely to put out an MRE you know it to front run the definitely feasibility study but again we'd like to see an update of that MRE as part of the Newcrest universe of resource updates in in February next year and that would be my expectation and we kind of know the cut-off of the, of the feasibility study because in August Newcrest released its updated resource and reserve it was within one percent of the August Newcrest release as we released independently on the 3rd of March 2022
- the cut-off for Newcrest was November 2021, so it's quite possible that the feasibility study will be a look back in time 12 months.
* How does that make me feel?
- like Tom Baker but the but the … so I think we kind of know what it will look like but that's great because we've got 12 months of drilling since that and we can just see ongoing growth and I think we should celebrate that ongoing growth.
* So will you do an updated MRE after the definitive feasibility study comes out?
- well I think we'd like to say the joint venture do one in February with the as is the practice of Newcrest to update all its assets typically in that February and that is always our preference
- we you know we're gonna, we value the relationship with Newcrest we go on well together especially at that technical team levely ou know
- I got to see Sandy briefly in Denver, yeah our preference is to do things together like if we need to we we've shown a proven capacity to come out with our own updates on the resource reserves to do our own version of a of a feasibility study which ultimately an independent expert believed was a very credible and more representative view of Havieron
- and that's a great testament to the team so we have that capacity and it's great that shareholders have that confidence but fundamentally our preference is to do everything as a joint venture with Newcrest.
* Right, Ruby is a happy camper she's thrilled to see how you face attack face and tackle challenges thrown your way like creating a funding plan when needed after Newcrest declined the five percent, adding substantial heavyweights to our board to create future value, producing your own MRE even one more than forthcoming my question is her question is given you desire it seems to go mining if what else do we need to add to a repertoire in order to equip… be equipped to do so confidently. Ruby you are… you write very nicely and if the unthinkable happened and Newcrest decided not to mine have it on then what's your backup plan to overcome this and how and where would we process our ore?
- so that a little bit to unpack there so look I think we kind of have a team that can work through that you know, we have we'd have to scale up potentially but also with the augmentation of Jimmy in that executive role…
- just to remind people Jimmy spent 25, 35 years a tBHP ran a number of Divisions not just the Supras prestigious Iron Ore but I think ran kind of nickel and other divisions there, so he's got just a huge range of mining experience widely seen as to what I see and you know head of operations BHP so having his expertise his contact database of people in the industry which is like an encyclopaedia of everyone who you know does mining not just in Australia but around the world and then his ability to bring those people into our organization gives us a competitive advantage
- I think I have a magnificent rolodex of mine in kind of around Northern Star and other entities but your credit with credit's due you know Jimmy is next level what BHP is the largest Mining Company in the world so I think the ability to scale is really there
- the ability though of a relatively small number of senior experience and really capable people to make judgments and assessments around mining opportunities are really good
- in terms of alternatives to process ore… or look I don't you really think that's something we have to you know focus on too much but they're yeah…
* Are there other options?
- yeah look there's there's Nifty further to the West there's a number of modular plants when you're only trying to put through say a mllion tonnes you know modular parts are quite capable but you know there's Antipa that wants to build something, so there's a number of ranges but fundamentally I think you know we you know would make sense I don't think Newcrest would want to hold Telfer without Havieron
- you know they tried to sell it twice, it's scheduled to close in 2024
- it wouldn't be something I you know I doubt Newcrest would have a strategy where they'd want to retain an asset and rehab a you know a site but not have a world-class ore body next door.
* Okay which links us neatly into Anya and she says with Newcrest downplaying Havieron not exercising their option for the further five percent and Greatland now being supported by Wyloo are Greatland/Wyloo seeking to issue an offer to Newcrest for Telfer?
- so I think one of the benefits of what we've done over the last month that I say over the last month when we announced it this was a 12-month process the yeah we make ourselves a very credible organization to look at opportunities for growth in terms of the calibre of the team in terms of the access to debt with Tier 1 Banks and equity support
- and I think having all those elements make us a very credible organization in a market where perhaps capital was more scarce available to resource companies than it was two years ago
- so I think it puts us in incredibly strong position for whatever opportunities arise.
* Now we've got lots of questions still to get through so if you could perhaps condense your answers as we go forward that'd be very helpful, Mark H says I'm putting the cart before the horse here but if the future is kind enough to us and there was a commercial scale discovery at Ernest Giles what's the situation regarding local infrastructure logistics Etc and the wonderful Dip S who asked some really fantastic questions, he says something similar, can you detail exploration timelines at Ernest Giles and if there is a viable project what about the options and the timeframes for development taking into account infrastructure and capital requirements, so two detailed questions about Ernest Giles for you to answer?
- it was… it's difficult when you asked me to accelerate because there's a lot you could be said there but look firstly it is a fantastic exploration opportunity and option value in our portfolio yeah yeah I'm I'm unapologetically do really like it
- we'd like to be on it next year it's really important that we're respectful to the indigenous engagement and we need to work with them to achieve that, we'd like to I think there's a really good prospect that we will but we do need to do that as a as a Gateway
- I think once you're drilling these things it is a reasonably remote site east of Kalgoorlie but plenty of sites have been you know developed in those kind of regions, it's I can't think of any infrastructure but you know another kind of existing gold mill near it that we would just kind of piggyback on the back off
- but what we now have is a bigger balance sheet better access to capital, I would expect we'd have free cash flow coming from Havieron which would uh potentially help fund the development of a Ernst Giles kind of asset so I think there would be a range of ways for us to deliver it
- I hope it would be so big that it would be a decade before we'd develop it, yeah if it's smaller you can normally punch in a little bit quicker and develop it quickly, I hope that's not the case I hope it's another Havieron and it's a really substantial development over years and years but so I think without knowing the ore body it's difficult to necessarily comment on development time frames but I think we again, I think what I would say is it's unlikely I would go out and joint venture that with someone else if we were onto a world-class ore body
- this time selfishly we keep it for all our shareholders and optimize our value and exposure to that asset.
* Okay David E asks you about scallywag can you please advise when we'll be getting drilled results from our 100% owned Scallywag area as it's been a long time since we've had any news from this area?
- we are drilling there now, we did the RC pre-collars we have diamond rig drilling as we speak
- I wouldn't really want to comment on assay times right now I have heard anecdotally they're coming down like materially down but one swallow does not a summer make so I think I'd like to see that consistently before I start talking about an expectation that assay times have come down
- we typically like to bring them out kind of as we get them we don't you know hold them back till you know… so I would like to think that there's a relatively short period before we have some but we don't have any assays back
- you know we have to get the core back, cut it get it into the assays, return the assays, analyse them and then announce them but I'd like to think that's in a you know certainly this calendar year you'd start to see the flow of results but again our exploration campaign in scallywag over the last well over the last five years has been remain very measured
- we really needed to be fully funded on Havieron, now perhaps we are that we can accelerate that into 2023 but right now it's still just like the last five years it's a single rig, so you know that's going long
- this year unlike last year where we just ran a diamond rig, this year I think we've done it a little bit smarter we've done the RC pre-collars that's cheaper quicker to get in that and then we've got the diamond drill rig coming in and punching back through all those collars
- so the more expensive diamond rig is just drilling core so although that means we get the results later in the year it should mean that it accelerates through that program quite smartly now it's underway
* Okay you learn as you go like that it's just the nature of life isn't it Shaun, yeah Barbara W as the last time the hall in July you mentioned there were two fantastic deals you're busy working on there have been a few announcements that have released via RNs in the interviewing months, have both of these deals that you spoke of before we've been formally announced in the market, are both still irons in the fire?
- I think what I've probably tried to emphasize over the last 12 months is probably around the debt piece new directors and getting you know strategic equity support so that is all announced
- look we yeah we do have other you know conversations with people you know, we really like to look at opportunities to expand our footprint in that Paterson region where I think we have a good understanding of the tech, of the geology
- we have a really good team that's been put together to kind of look through cover so I think I can articulate a competitive advantage in that region so we'd like to look at opportunities to expand that
- now you know there's there's opportunities to do that but like everything you know you do you have to find the right partner who sees value in your contribution as well, so we continue to look at those things, not nothing imminent but I think probably what I've referred to in in the past is announced
- but you know we like to keep ourselves active so you should think that we're thinking through those kind of options and who we can talk to.
* Okay Mike D talks about 2D representations of the ore body it says they're hard to understand he prefer to see a 3D representation is there any way that with your software or your 3D software you can actually make that accessible to people like him?
- great I can answer that one quickly for you Donald yes we announced it this morning it's on our website today and I also part of the Town Hall presentation was a walkthrough of it so yes that's done we've had a couple of people ask for that, great idea good question something that our technical team launched into and got done for us all and yeah I've enjoyed going through it as well
- I think it's a it's a big ore body hard to understand the 3D fly through really helps.
* Great all right so well done Mike D good question, so Dip S the man who has,, we could almost have a Q&A with Dip’s questions alone, he's got 20 minutes of answers, so we have to only ask the only ask the you know the very finest of his questions, Shaun can you please articulate your case for a potential investor sitting on the fence that GGP will be able to transition from Explorer to a company that can develop and operate their own mines?
- yeah look I think we've done that quite well in terms of I think we've got an incredible organizational capacity around that expanded board, we have a technical team that I think is proven and battle hardened over the last 12 months and also that technical team contributes hugely towards the banking success
- it contributes hugely towards the successfully engaging in the equity markets because just like sessions today those people ask questions, technical questions and being able to answer them and give them confidence about the quality of those answers
- Newcrest coming out with its own resource and reserve and it being within one percent of our third of March, uh you know Resource and Reserve update which was our banking case and then having that confirmed by Newcrest enhanced our reputation with people as high calibre and our credibility
- so all of these things, the strength of the team I think has been tremendous and again I.. I'm very happy to keep talking about the investment we made in 2021 into high calibre people has paid off in Spades
- so I think having that organizational capacity around the board leadership around the executive and the management team I think that's how you optimize the value of your asset
- at Havieron I think we've you know through the option process through the funding we've demonstrated an ability to do that I think we also have the ability to do that with other assets both understanding opportunities which is important but also being able to apply ourselves to be successful at mining
- now in certain cases you might be taking over teams, in other cases you might be augmenting them in other cases you'd you might be building them but I think having that leadership and the capacity to do that I think then you can populate out that pyramid and that organizational capacity
- so yes I think we're really well placed to do that and access to Capital should not be underestimated and when you see a difficult market such as we're in now, access to capital as king.
* That's a good answer, okay my final Dip question, he makes more of a statement so I'm going to turn it into a question, he knows to the fact that you've got an ASX listing, the Wyloo partnership the board additions, he says you're built you're building up something for something big here, do you intend to adopt an aggressive inorganic growth strategy focused on accelerated growth?
- oh look I'd never choose to describe my inorganic or Business Development or growth outside of Havieron as aggressive, I think I'd rather characterize it as financially disciplined
- I think one of the reasons we should be looking at it now because we've got all the time in the world right now, we have the next three years just of growth at Havieron
- beyond that we have the bulk mine which probably gives us another kind of say three years of growth
- the right time to look at growth opportunities is when you don't need to do them, if you've just sold your house and you're about to settle it in two week’s time and you need to find a right in the next place in two weeks you're going to go out and buy the first thing you see
- if you've got six years to pick the eyes out of the market you can make financially disciplined good decisions, so I would describe it's aggressive so far as it starts now but the beauty of it is we're not in a hurry
- the market will potentially come to us in any case but we have the team we have the network to see good opportunities and we have the luxury of time to be financially disciplined in how we assess them so yes I'd love to do it
- my track record is with three businesses going from single asset to multi-asset multi-billion dollar platforms I'd love to achieve that with Greatland, I'd like to achieve that with Greatland but in all those cases we created shareholder value, we returned a multiple of invested equity Capital to shareholders because we're financially disciplined around that and we had good teams to do it
- I like to think I was a part and an important part of all those three teams but I was part of a bigger team and that's like what I like to think we've achieved here at Havieron as well, the team that can go out and try to replicate the same success.
* Okay, George Z asks, well he has a question regarding the number of shares on offer and he's worried about share dilution amongst other things, is further dilution on the way before production and/or will consolidation need to be considered as we prepare to list on the ASX so he's worried about dilution, will there need to be consolidation before we list on the ASX?
- so let me answer that in in three parts like yeah I'm a shareholder I don't want dilution of our stock and firstly let me say we are we believe we're funded so there is no need to and I and I'm going to take it back to the second question about resolutions three four and five no they're not needed they're good practice to have in order
- but the so we're not looking to go and raise additional equity but just remind people you know we had four billion shares on issue, yeah 18 months ago when I joined , it took BHP 100 years to get 4 billion shares on issue so there was always a lot of shares on issue
- you know fully diluted that might be 20% higher now but through that 20% when I joined we had four million Aussie dollars in the bank, we've now raised on a fully diluted basis well on a fully diluted basis we've raised about 450 million and funded the asset so I think the dilution we've incurred over the last couple of months has been smart dilution and I haven't heard of a mine being developed without money
- yeah you need to pay people to develop mines, you have workforces you have contractors you have equipment so since Roman times you've needed money to and probably before you've needed money to develop a mine so I know some people have sent me messages going why did you raise money
- well we had to, that was the deal we entered the joint venture was not a free carry we had to pay our own and we've done that, so I think the dilution we've done has been extremely wise and necessary and we've got something for i
- the in terms of ASX, look there's a number of different ways to do it but again if it's compliance listing we wouldn't raise any equity, we'll assess that there's you know more than one way to skin a cat if I'm able to say that but we can…
* You've already picked the eyes out of the market so why not!
- yes so and then in terms of a share consolidation look I don't love that we've got 4 billion plus shares on issue
- I'd probably love to do a consolidation at some point but I'd probably rather consolidate into strength, so yes we'd look at that it's something I think about but it's not a burning platform for us, again it's something that look we can look at and at the right time it's probably good to to reassess so we'll continue to monitor that
- but I think if you I think about shares in a percentage way at Greatland because the numbers are big and I think you know sometimes people see a number of shares being issued and probably think it's a large number but most companies you probably see have 400 million shares on issue not 4 billion so when you divide when you take a zero off when you divide it by 10 it puts the numbers in a little bit more context
- so yeah a share consolidation is probably a good idea but I think we get, we have the strategic initiative as to when we think about implementing something like that.
* Okay Peter T is an Irishman who wants you to come to Ireland basically and he's not bothered whether it's Belfast or Dublin he just wants you to come to Ireland he called himself a leprechaun. I'm not going to go there believe me even as a Scotsman I'm not going there and he says there's lots of people sitting on golden GGP shares and he wants to see you and if the opportunity arises that we made an offer for Havieron or even GGP as a whole or this is a tricky question I do apologize so fun he wants to see you but on the other hand he wants to know if you're gonna if 40p a share would be an insult for GGP, he wonders if anybody made an offer at 40p would you accept?
- okay so delighted to come to Ireland if there's a share base there that's to get across to you know that that might be a sensible thing to do on my next trip but don't back that in but that's something I can look into so thank you
- the in terms of 40 Pence I'm you know with the risk of getting the maths wrong that sounds like 450% premium, I think that would be that's I think I might answer that in two ways
- so firstly my ambition with this platform is not to be taken over we… world-class assets do not grow on tracks, we have one we should take pride in that, we should nurture it we should enjoy it we want to take the full value of it and people who you know offer you bids obviously think they're going to make more money than what they're paying
- having said that, yeah I think what's important and the way I think about it’s about delivering value for shareholders it's about enhancing reputations, if you know if there was a strong enough bid you probably would put it to shareholders but I think that's not what I want to achieve, but my belief is the best way to create short-term value be in the share price there in the manifestation of an attractive takeover bid is to create medium to long-term value and the short-term price over time will take care of itself
- and I think there remains asymmetrical risk in our share price at some point if we're not successful at demonstrating the value of Havieron yeah a predator will come and take us over, again that's not what I want to achieve but this is a world-class ore body and although I think perhaps we're slightly less susceptible to an opportunistic bid, so a bid that manifestly underestimates the value it we are still susceptible to a bid and so it's a bit of a head scratcher for me
- the current share price but I do view it in context of the overall market and I think if you look at Newcrest for instance and you know Newcrest is a great company, a global major Australia's leading gold company and a relationship I really value and I think they do a lot of things very well but they're at an eight year low, their share price have gone from 29 to I think 15 dollars, so yeah I like to think Greatland can swim against that tide that we can demonstrate that it should be performing better than its peer group
- because we're growing because we have a world-class asset because we have copper exposure I don't think I've really seen that out performance yet we're fully funded but I like to that's why I'm take the time to engage with shareholders that's why I take the time to meet new shareholders you know we want the word out
- you know Greatland I think has a high profile in London but has been a bit of a secret globally prior to this
- the number of institutional funds I meet in Australia and USA not so much now but had never heard of Greatland was phenomenal, now I think we fixed that profile and fundamentally when those insto’s see value they can move so I like where it's headed.
* Okay second last question Abba M, why is gold not outperforming as a global economy struggles?
- well it's interesting I think I can argue it has outperformed, it's gone down and I think it is highly correlated with the strengths of the US dollar and the US dollar has been probably the strongest asset you know on the planet and I'm sure there's some other things that are better
- but the if you have a look at the deterioration in gold price vis-a-vis equity markets gold has actually performed well hasn't doubled it hasn't knocked the lights out but in a falling Market falling less is outperformed in I think I mentioned at the start of the session Great British pound price I think we're at an all-time high gold price in Aussie gold price it's not an all-time high but it's pretty darn good
- so gold has outperformed have gold equities outperformed maybe not but gold price has so now could it more outperform I think it could and I think there are some fundamentals but I think the world's still trying to understand whether there is real inflation I.E inflation that is greater than interest rates and we all appreciate interest rates have gone up or whether there's just inflation now gold is an excellent hedge against inflation less against real and increasing real interest rates so there's a little bit of a battle going on
- you know the fed the bank of England the RBA you know are all in this little bit of a war with each other kind of increasing rates or at least against inflation I mean so I think that's yet to play out and I think the market loves to have a direction and not uncertainty so whilst that's flying out I think gold is in a little bit of a wait and see.
* Um state of flux, yeah okay last question from Simon J..
- sorry and we have 20% copper!
* You've got 20% copper! Why should I invest in Greatland today I've kept the investment summary until last, why should I invest in Greatland today instead of waiting until respective definitive feasibility studies and the decision to mine resolves, give me a reason, he's got cash , says wants to invest why should you invest in you now?
- well you where we’re less than I'd like to think we're less than three months away the December quarter starts next week and the DFS the definitive feasibility studies due out in that December 22 quarter
- so we're not far away, look I think well to be frank I think the pullback in price gives you an opportunity to enter which I'd like to think won't forever be there but I think what you should see is a 50% increase in the production profile of Havieron with this feasibility study
- you'll see a longer mine life based on a larger Reserve Base, now typically from a PFS to a feasibility study there's not a lot of change, it's just a reiteration of the same report because you've already drilled it out, you're already kind of committed to what you're doing you're just sharpening up your numbers you're going from kind of plus or minus 25% to plus or minus 10,15%
- in this case we're actually going to be 50% bigger on plus a bigger Reserve Base so I think there's really Positive Growth there and we're 12 months closer to production because normally you haven't started production you haven't started ore development, you haven't started your decline
- this passage of time… we used to be three years away from production now we're kind of 18 months away from production so the passage of time from an NPV perspective is a lot shorter
- so I think all these things give you an indication that the feasibility study… now it might have a drill cut off of November 2021 and we know there's a heck of a lot of good drill results since then that gives you exposure to even more growth
- but it should be enhanced, it should look better and remember Newcrest together with its.. the loan to Greatland its 180-million-dollar commitment in September 2021 to the growth of Telfer has put in something like 450 million USD so even for a company like Newcrest you know a half billion-dollar commitment pre-feasibility study says something about their conviction and I don't know the mind of Newcrest but I do know in the mind of Greatland, we certainly have conviction that we have a world-class asset.
* Shaun Day we’ve run out of time, I'm just very very grateful on behalf of all the investors I just like to say thank you, you always spent such a long time going through everybody's questions in detail, we couldn't be more grateful thank you so much, thank you for your time thank you core London for staying on late and looking after us for which we're deeply deeply grateful, for the fantastic team at here who looked after us and to London Southeast as a platform who always delight in having you on, keep using the GGP chat board, we love having you thank you so much to everyone bye-bye.
Download link:
https://www.mediafire.com/file/ubhuj407 ... 2.pdf/file
Earlier notes from unstreamed Q&A:
https://www.ggpchat.co.uk/viewtopic.php?t=551
Notes from LSE Q&A regarding Havieron funding , Board appointments and GM voting - 29 Sept 2022
Notes from LSE Q&A regarding Havieron funding , Board appointments and GM voting - 29 Sept 2022
“Study the past if you would define the future.” ― Confucius