Key Notes from Investor Meet PFS Q&A - Oct 12th
Posted: Sat Jun 25, 2022 4:06 pm
Investor Meet PFS Q&A - Oct 12th
Video: https://www.youtube.com/watch?v=65pYtW9DVus&t=2s
Slides: https://greatlandgold.com/wp-content/up ... -Final.pdf
Main Presentation
*Slide - Growth Story - Three pillars of growth are to:
- 1/ Expand Havieron, deliver it on time and budget to the benefit of all shareholders, it's a tremendous prize as our flagship asset
- 2/ Continue to accelerate exploration, invest in the drill bit, develop the value within the portfolio and create the next Havieron for our shareholders
- 3/ Pursue opportunistic growth, be disciplined managers of our asset portfolio and look for opportunities to bring value in.
*Slide - SE Crescent PFS
- Really a phase one pre-feasibility study, centred on the southeast crescent
which is a high-grade backbone to Havieron but only a fraction of the asset and
study is really just on a fraction of that south-east crescent; you could describe this as a study on a fraction of a fraction of the ore body
- Tremendous outcome and is really the entrée into the main course which is really starting to measure up as a very high-quality world-class asset
- Gives us the opportunity to really unlock the whole value of the asset and gives us a view about where that journey is going
*Slide - Hav Growth Journey
- Started the decline early, risk for GGP in terms of partnering with a group like Newcrest is that they might want to sit back and drill this out like a pin cushion and do a huge amount of study and then develop this massive scale mine which everyone knows it has the potential to be. But of course, we would have been sitting here for years and we would have had an absolute wall of CAPEX ahead of us when we hit that point.
- Instead, it's being developed in this staged approach which is tailor-made for a mid-cap balance sheet like GGP, we've started the decline early, we've punched down into the southeast crescent and now we've got the initial stage one study which really just unlocks this southeast crescent.
- Then in parallel with that we continue to work up that southeast crescent and understand that better with the feasibility study in late next year but also as we drive down towards the top of the Havieron ore body, we create drill platforms that provide the opportunity to punch into that and increase the cycle time and reduce the cost of drilling out that bigger picture in understanding the northern breccia, eastern breccia and that high grade northwest corridor that we're starting to see across Havieron and really look at a broader bulk mining picture which unlocks the full potential of Havieron.
*Slide - Hav Maiden SE Crescent PFS
- This next slide tries to capture the tip of the iceberg on some of the key punchline numbers.
- Only a fraction of the existing mineral resource estimate i.e.,14 million tons out of 52 million tonnes so 28% of the current MRE.
- What it does delivers even at that small size is significant free cash flow and an IRR (Internal Return Rate) of 27%. Two factors have gone into delivering such a high IRR on what is a limited scale project in the context of the overall Havieron.
- This first limited scale edition of Havieron has to carry all the capex of developing down that decline, getting in those underground declines to unlock the ore body, roads, powerlines etc and still only leaves a 73 million USD hurdle for GGP to fund. Remember we've already got 50 million funded and that gives us a runway out to probably the balance of end of next year around this time when we expect the feasibility study to be delivered.
- So it gives us 12 months of runway and 73 million dollars to fund which as a fraction of our market cap is very modest and gives plenty of time to approach that and I’ll talk about banks and other opportunities that we have there and of course the other side of this is that world-class cost structure 643 dollars an ounce , we'll focus on this through the presentation but new GGP has the opportunity to be the second lowest cost gold producer on the planet so that's extraordinary .
*Slide - Hav Maiden Probable Ore Reserve
- Couple of points to note, firstly being that today we have our maiden ore reserve, previously we've had the resource, now with this study and infilled drilling we have a reserve. What's really important is that this reserve has seen the metal content of those 14 million tons notch up, normally there's a risk that that will fall away but in this case talking to the quality of the team, talking to the quality of the analysis that's been done and the very leveraging, the understanding of the Paterson that Newcrest have from 35 years should give people confidence not just about the resource and reserve number but about all the values all the figures that we use throughout this study.
- A picture is often worth a thousand words and you can see that dark red colour that's actually an outline of the stops under the sub-level open scoping and what you can see in that balance of the pink is all southeast crescent so high-grade material that sits outside of this mining case so you can see the upside and then again you know when we look at that southeast crescent we consistently drill it, consistently get good grades and you're actually seeing some higher grades and higher widths at depth and so far it looks like it plunges down to the centre of the earth.
- Going to continue to follow it, it's an absolute prize and this study focused on the southeast crescent so it is doesn't capture the bulk of it, so again this is the tip of the iceberg and we've got the cylinders on the side that hopefully kind of graphically represents where we are today and how many of those cylinders potentially fit into the long term size of this mine.
*Slide - Low CAPEX, Low Risk
- The low capex nature of this and low risk is exceptional so overall we've got this 123 million USD funding, we have 50 of that already through the Newcrest facility so that leaves us with 73 million USD which is a very modest value particularly when you take into account that there's a contingency in this of 64 million USD
- I talked about the confidence that we have in delivering the outputs of this study and again I want to recognise the value that Newcrest delivers in that partnership but we have a lot of confidence of delivering that and with those contingencies in there as well it gives us a lot of confidence there and importantly again, we have this 12 months of runway with the funding facility from Newcrest and then we can continue to pursue that over time and think about how to draw down the rest of those funds through a combination particularly of debt that we're currently looking at.
*Slide - Hav Leveraging Existing Infrastructure
- This slide talks to the brownfield nature of Havieron, we get to leverage the existing Telfer mining for structure and that's not just the processing plant there's the workshops, camp, stores, critical spares, airstrip all in place and all of that we get to utilise to create this low risk, low capex start-up of Havieron
- Also worth noting there that the discovery hole Hav 05 was drilled in 2019 and the results came back from that in 2019, just 2021 today and already we're a long way down the track to this actually being an operating mine so it shows the benefit of having Newcrest as a partner and having this infrastructure to leverage off
- Talked a lot about the physical infrastructure but the people infrastructure of around 1200 people in situ at Telfer collectively with 35 years of mining experience in the Paterson again gives this great value and insights on the cost and great understanding of the geology of the processing, all of which we get to utilise and leverage to deliver Havieron in a low risk and confident way.
*Slide - Hav Starter Mine Production profile
- Next slide looks at this start of mine production and you can see again one of the things that really jumps out is that grade of 4.58 grams per tonne gold equivalent, that is a spectacular grade and drives so much of the quality of this outcome and again hopefully it comes across but although today's presentation is around this two million ton per annum mine, what you actually have been taken to the feasibility study is a 3 million tonne per annum case.
- So that's 50% growth just centred on the southeast crescent which starts to give you an insight as to the ambition that the joint venture partners have for Havieron and in addition to that we'll talk about the bulk case later but you know this very special part of the mine, this higher grade southeast crescent, this start of the mine does carry this tremendous grade and then we deliver this growth with a much larger feasibility study assumption that is subject to ongoing drilling and everything we think will hang together well.
*Slide - Hav Low-Cost Starter Mine
- We get into a couple of great slides here which talk to the cost of Havieron, you see we sit there well and truly in the lowest quartile and that delivers you fantastic margin per ounce produced, not many mines sitting there to the left of screen, but the ones that do sit there are absolute bellwethers of the sector, Havieron sits in tremendous company there and sit there in the lowest quartiles of our peer group - so a really handsome slide there when you're looking at plus 1775 gold price and a cost of 643 dollars an ounce, a thousand dollar plus margin per ounce is special and we should really appreciate that for what it is.
- The second slide here under cost is potentially my favourite slide in the deck and I’ve just got to recognise Chris the CFO for us who actually got the data on this, it was a great initiative and GGP is positioned as a company with all in sustaining cost (AISC) as second globally. We would be the second lowest cost gold mine on the planet, that is a tremendous outcome and I think what's more is that there potential to actually walk down the cost structure looking at different mining methodologies even within the southeast crescent as part of the next study, adding bulk to the mine and getting that scale and then importantly one of the assumptions in the study is that no other ore is going through the Telfer plant, that's a 20 million tonne per annum nameplate facility and this study assesses two million tons going through it. So clearly as we increase the size of the southeast crescent, as we look at the balance of that zonation and bulk mining across there, there's an opportunity to share those fixed costs and overheads of Telfer across a bigger ore body.
- For those following Newcrest, Newcrest identifies that they're really focused on adding mine life to Telfer - so given the history of Telfer I think that's highly probable and when you look at that , you can see this downside risk because we're just using Train B of that Havieron processing facility.
- If Telfer’s also using Train A you get that cross subsidisation of costs, good for both mines and then what does all this low cost do, it drives the IRR up and what's really important as well with this low cost is we've talked earlier about that capex. This starter mine has carried all that capex of the full mine - as you expand it, as you bring incremental ore, it only has to cover the incremental capex of just driving down to that new layer, it doesn't have to build another road or another power station to get down the 400 meters and set up all that in-mine infrastructure. All of that's being carried by this little starter mine which just talks very strongly to the quality of this asset.
*Slide - Cash Flow Expansion
- Next slide talks about how we generate that cash flow, we obviously have development capex and then we generate funds beyond that and hopefully it gives you know some sense of the scale up that we can deliver as we take it beyond this two million tonne pre-feasibility and what I particularly like about this is its self-funding and tailor-made for a mid-cap - so we get in there and establish this mine, we get down there and we generate free cash flow.
- Then we reinvest a lot of that free cash flow into unlocking the full value of Havieron and this study really just gives us this line of sight as to what the metrics of Havieron can be and the fact that we can unlock that using these initial cash flows is fantastic in terms of minimising dilution to our shareholders.
*Slide - Evolving Mining
- I enjoy this slide as it sets out the way this mine has been planned, it's this lovely sub-vertical all-body underground mining, gravity is your friend and what's good about this is the flexibility it highlights. You've got four vertical mining fronts, what you want is flexibility that you know lets you manage risk, lets you keep your gear productive and why is this sub level open stoping (SLOS)? Because it's high grade with really defined boundaries, so you want to minimise dilution but also I talked before about this south-east crescent, how we continue to hit it at depth and it just seems to plunge down into the earth, we want to be able to follow it down so you want to be able to put in your pace feel and manage the size mysticity to follow this at depth and again on this page we also talked about the fact that these big stopes look a little bit like a Cali - that's the new mine across in the northern territory, a fantastic mine it was one of those special mines sitting to the to the left of us on cost structure that's down to about 21-2200 meters and still has fantastic cost because it's got really good ounces to vertical meter and has this same kind of large stoping under a SLOS system and of course just to reiterate what we're actually looking to take forward into the feasibility study is actually 50% bigger at a 3 million ton per annum SLOS assumption which looks like you know it can potentially hang together if we continue to get the continuity in this southeast crescent as expected
*Slide - HAV World Class Project
- The takeaway from this slide is look with nine drills running, you know we've got a lot of meters going into this giant deposit, it's a big area to drill out particularly from surface so again getting that decline in early is going to give us drill platforms and there's some 50,000 meters that have been drilled since the cut-off for this pre-feasibility. So, remember that was back in February, there's been 10 months of information that we've all seen that hasn't been captured in this pre-feasibility study plus there's a plan to do 90,000 meters of drilling over the next financial year to June 2022.
- So that gives you some context as to the upside that we have within the project we can deliver with all that information and some of the drill intercepts that we included in the RNS talk to the quality of the new drilling campaign.
*Slide - HAV Mine Growth
- The thing I love most of all about Havieron and indeed GGP is the opportunity that remains ahead of ourselves, that we are still very much in the growth phase, this is the same reason people were buying us 12 months, six months, six weeks, six days ago is around where Havieron is headed overall.
- That's what this slide talks about, we have a really good sighter now on the south-east crescent, I think the cost structure there and the capex probably exceed expectations but what we see across that broader zonation across that north-west crescent, that corridor moving through that northern breccia is where we're trying to stitch together these higher grade areas and getting that corridor of high grade.
- And potentially most exciting of all is to have these big intercepts sitting in this whole new area, different geo-chemistry, different ore body kind of sitting or deposit sitting to the eastern flank of Havieron is pretty exciting to have sitting to the east of what is already a world-class ore body. So, you know that's something that we spend a lot of time thinking about and it just talks to the quality of this asset and the quality of the growth. You don't need the eastern breccia for this to be world-class but to add that really becomes something significant.
*Slide - HAV sustainability
- I think we'll talk about sustainability briefly; we want to be a leader in this field because what it does is, it increases the universe of potential investors in addition to the really strong environmental outcomes.
- We'd like to target zero carbons within five years on net carbon, within five years of being in production. We need to engage with Newcrest around that and understand what we can do together but I’m really confident around the way Newcrest thinks about these issues of sustainability and we want to be great partners in that because we believe in it, we want to be leaders in the field but we also think it makes really good business sense.
*Slide - Exploration Paterson
- Just around the portfolio itself, we love the option value on our ground around Havieron and we're going to continue to invest in the drill bit and indeed we've added ground here, we've significantly increased our footprint and we'll continue to look to do that. We'll continue to look to drill there and we currently have a rig spinning there on scallywag.
- In terms of the overall portfolio again, we want to invest in this, we want to invest in the drill bit and we also want to be disciplined managers of our portfolio and we want to keep adding good quality assets that can compete for drilling budget with Havieron.
- Ernest Giles is top of that list, really excited about getting in there and we do need to get the access agreement done with the first nations. I’ve been working on that over the last six months and that's progressing well so we would like to think we've a chance to be drilling that next year and again great option value but we'll also be spending time on Panorama in the 12 months ahead.
*Slide - ESG
- ESG remains really important to us and a critical path of what we want to do and we love the copper aspect of our ESG profile. No better way to invest in EV and battery than through copper and I did hear Sandeep say from the Newcrest presentation today that the best gold companies to invest in are those with a copper profile in them - and we certainly fit that box as well.
*Slide - Human Resource Focused
- I do want to just pause for a moment here for those that that know me and have known me from other companies. I'm a huge believer in the team, in building our team in that we've invested in our team through the capacity we've added around safety, around mining engineering and we've augmented our resource and our finance team. It speaks volumes in the quality of people we're attracting because of the quality of the asset, we have also added to the board with Paul Hallam and we'll look to add further to the board , we really want to build the team because it's the team that's going to deliver our ability to understand the asset, to contribute to it and to scrutinise it to make sure that Havieron is developed for the benefit of GGP shareholders.
- The second part of the people, I won't spend a lot of time on this other than just to recognize an old friend there with Callum who remains part of the GGP family and had a tremendous contribution but also bringing in additional reinforcements such as Stuart Masters on the JORC board, Simon Hanrahan and Dr. Ian Ritchie on for processing. We're really lucky to have that augmented capacity within our team and again something I’ve really focused upon.
*Slide - Building a multi-asset company of significant scale
- I talked about the funding process, we've drawn about 20 million of that 50 million debt, that 30 million at least ostensibly is forecast to last us till the feasibility study scheduled for the December quarter so around 12 months away, but we also have banks lined up around the block too and we've received term sheets for debt and these are from tier one institutions, these are from named main street banks and I think today's PFS, a maiden reserve showing that cost structure and showing the margin is only going to further enhance their excitement about being part of it.
- This is a brownfield risk development with Newcrest, it's right down the fairway for banks as they perceive it as low risk - which works really well for us - so when we talk about that remaining 73 million USD of funding there's a great opportunity to tackle that with bank debt.
- That's not to say we won't consider equity components as well, but you know bank debt is certainly something we're going to understand. I've got a background in it and we certainly understand the magic of leverage for shareholders so look with that I just want to again say thank you for tuning in but I’m keen to move across into the questions, so with that I’ll invite the moderator Mark to fire away.
Q&A Session
Shaun if I could start off with these ones which I think kind of summarise a lot of those that we received ahead of the event - first question reads as follows - why did Newcrest decide to release this PFS now and not wait to include more information about Havieron?
I think, yeah this is very much a stage one study, uh it really identifies you know this southeast crescent, you know the low-cost, low capex nature of it which I think probably may have exceeded some people's expectations. So, I think that's really strong - having said that you know I talked about it before, this is the entree before the main course so that the scale of this is not huge.
Why would they want to do this, well it makes a huge amount of sense from a mine planning uh you know Newcrest puts around us 250 million USD into Havieron prior to Greatland and its shareholders contributing in part through that loan agreement so yeah it makes a huge amount of sense that they want to understand and confirm that it’s a sensible investment.
Some of you may have also noticed they've invested a further 180 million in Telfer to keep the lights on there - they don't want a gap year at Telfer, they don't want to lose those 1200 people in situ there and we don't want them either to lose those people. You know that's all part of the low-risk nature of this development so I think what does this do, it confirms that we're on the right track, it confirms the quick start of Havieron was the right course to take and it tells us we're on the right track so yeah I think these things are multi-factorial but I think it gives you this lovely line of sight as to what Havieron can become.
As a long-term investor in GGP, how does this PFS change your thinking about Havieron as a tier one asset?
I think it confirms my thinking about this being a world-class asset and a world-class asset being developed you know in a tier one jurisdiction. Australia is a great place to be a mining company but Western Australia is the jewel in the crown and then again, we're doing it with a tier one partner in Newcrest, Australia's largest miner with 35 years’ experience here in the Paterson and all their infrastructure and people infrastructure to leverage upon, so what does this tell me?
It tells me this is a world-class opportunity, it's a low risk low capex and it confirms that low capex, it confirms the low cost structure, it confirms the, you know that the bigger opportunity uh that what we can discover here, so I think this is more affirmation for me but perhaps as I kind of mentioned before, that capex hurdle, that cost structure are maybe a little bit better than I was expecting which is brilliant, it's uh it's always nice when the risk is on the downside and again for those that kind of follow mining companies I think when you're converting resource into reserve and actually seeing the metal content come up - I think that also speaks volumes to the team - but also the quality of ore body.
I know you did touch on funding but we did receive a number of pre-submitted questions relating to funding, will Greatland need to borrow significant amounts to fund the development of Havieron and will that be possible to obtain?
Well look, I said before it's a good question, look I think the way I look at funding is in three parts you know. Firstly we have this existing facility in place, we’ve drawn about 20, we have 30 million dollars of runway ahead of us on that which is expected to take us to delivery of the feasibility study in the December quarter, so we've got 12 months of runway ahead of us before we expect to have to contribute to the development of Havieron - so that's a lovely you know time frame to have it ahead of us.
We're already engaging with banks so I think the question was you know will we have to borrow a lot of money? Well it's always nice to be offered a lot of money from the bank, we won't want to you know, we want to right-size our debt but I think for banks to be able to invest in you know a low risk jurisdiction, high quality mine, low risk partners (he says high in presentation but think it was a mistake) being developed with a brownfield development is exactly where banks want to have exposure too, so we have a lot of engagement.
We've received term sheets already, uh we're going to be pursuing that and what does that do, it reduces the equity requirement if any to move forward - so I think it's a luxurious position for us to be in and it all talks to this capex profile is just tailor-made for a mid-cap - yeah it really is set out before us magnificently.
The final kind of pre-submitted thematic question that we had was around (and we received a number of them), around your relationship with Newcrest and really just relating and if you can give a bit of colour to how is your relationship with Newcrest and do you see this positive momentum moving forward?
Yeah look hopefully it came across in the presentation , yeah we really respect Newcrest, we like to think that respect is mutual certainly, that the exploration teams have worked together really well. Looked at you know, I think some people have observed there's a little bit of Newcrest experience in our team but I think that's all part of building the relationship of having existing relationships understanding the language, understanding the gold book standard that they approach studies in, having existing connectivity.
I think all of those were done to enhance the relationship, it's an important relationship for us, we think it's moving really well, the feedback I get from Newcrest is really positive and I don't think we could be in better hands in terms of all the experience they have in the Paterson leveraging their Telfer infrastructure to develop it and again it's us, you know the opportunity for us is not just to sit back but to understand it, to contribute to it, to be that peer review with Newcrest and indeed to scrutinise it to make sure we optimise the outcome for our shareholders and I think we do that well, I think we've got additional capacity to do that with and again it should give people a lot of confidence but it's built off a relationship of strength with Newcrest.
That's great thank you and thank you once again to those that submitted questions ahead of today's event and of course we did try to address a number of those questions throughout the slides during the presentation in addition to those we've just asked.
Shaun, if we could just turn to the live Q&A and perhaps I could start off at the top in time preference this one came in at 9:32 from Luke, so thank you Luke for your question - Why are Greatland using a gold price of 1750 as opposed to 1500 that Newcrest used in the PFS resulting in a lower AISC stated by Greatland than Newcrest?
Yes, good question and it's good to clarify that so look where is the current spot market is how we think about that - especially with gold and copper where you can hedge those outcomes we've used a gold price a bit under the current spot at 1750, we've used a copper price at 9000 which was meant to be a bit under spot but as those following the market would know copper price is going to surge in the last kind of 10 days so it's it we're a bit, we're kind of well under that now.
Yeah Newcrest is using you know a price deck which is you know 15-20% below market, you know that's a way to approach these things but I think to understand what how the asset would perform in the current market, prices may go up, prices may go down - but certainly when I look at things corporately, we tend to focus around a spot outcome and you know I think that's the right way to look at things.
Equally i think we get the best of both worlds, a lot of the mine planning here has been done on a far more conservative price deck, what does that mean? It means this asset can perform to expectations through the cycle, so a notch down or a pullback in gold or copper prices or combination isn't actually going to change the metrics of this mine, isn't going to change the performance, isn't going to change the economics of the material - so we are getting the best of both worlds there and you're right the - where our assumptions are basically the same as Newcrest other than with a slightly higher copper price - of course that gives us a slightly higher credit in the cash cost which notches them down a little bit - but otherwise you know we've basically used the same technical studies and platform as Newcrest, just with different macro-economic assumptions laid over them and we think using under-spot a fraction conservative but we think tells the story.
Devshe asks, do you expect the release of the PFS to attract significant institutional investment?
Yeah look - my background you know with Northern Star as Australia’s I think second largest gold miner, Sakari before that out of Singapore and Straits were all multi-billion multi-asset companies with hugely institutional investor bases. You know my strategy with Greatland is to maintain the strength that we've historically had with retail investors and then augment that with institutions.
I think like most people whether it be retail or an institution, you know they often don't buy on the first meeting, it's building the relationship, it's building the trust, it's delivering what you say you're going to deliver - so we've really been building those institutional relationships over the last six months - you know we've seen some you know institutional institutions creeping into the register.
I think this study is only going to enhance that attractiveness and you know to be honest I’ve had a couple of chats with insto’s today even and yeah, I think it's been well received and I think it positions us really strongly - so I think it's very positive our engagement with institutional investors just now.
Paddy G asks which of the growth targets excites you the most - the eastern breccia, the north-west pod or the external targets like Zipa, Havieron North and Meco?
Oh well that's a that's a that's a ripping question! Look to some extent I think the lowest risk target….I'll answer it in two parts - the lowest risk target is (or three parts rather), the lowest risk part target is that north west corridor kind of bringing together these high grade areas that we're seeing and knitting together this trend that we're seeing in that northwest corridor that brings that fresh air together - I think that's really exciting - it's going to take time to drill but yeah it's very positive in what we're seeing.
That eastern breccia is just extraordinary you know, to find widths of you know 200 meters sitting in the shadow of Havieron (referring to drill intervals), different geo-chem signature is spectacular. Yeah, I can't help but be really excited about that you know when you already have an ore body and then you've got you know what looks like a mineralised extension of some 650, 750 meters sitting next to it - yeah wowee that’s good fun - so yeah looking forward to drilling that out.
The option value that the banker in me always enjoys a bit of option value, sitting in those proximal targets, uh so we do want to drill them. I think we have similar on the Scallywag tenements that sit next door - but I think all three of them bring you know different stories to the growth and that multi-layered growth profile that we have at Havieron - it all adds to why this is a world-class system.
Stewart H - he asks can we expect regular updates from tenements outside Havieron and particularly when assays have been sent into tech and when visible mineralisation is seen by the on-site scanners?
Uh look - we tend to work well - we do work with Newcrest in a very cooperative way. We talked about the relationship before around effectively kind of trying to get our drill results out in a six weekly cycle, that's really good of Newcrest because they typically work in a quarterly cycle so I think again it's - there's a little bit of give or take in any good relationship.
The yeah look, we do do TruScan at site, so we do get a little bit of an indication as to where drilling's going - having said that there's no substitute to assays, so we're always going to want to finish the assay process, finish the quality control QHQC procedures before we announce anything, so I think that should be the expectation.
It's really important from the integrity of our process that we fully complete that before we share information with the market and again I think that should be giving confidence, you know, part of the benefit I’d like to think Greatland would do this in any case by ourselves - but part of the benefit in being partnered with a world-class organisation like Newcrest is the quality of those processes, the quality of the risk assurance and all that feeds into the confidence you can have in the study numbers and why you see things like when we convert a resource into reserve with additional density of drilling, the metal content actually notching up rather than dropping down, as people go our estimates overestimated that so I see that as all the upside about the quality of the team we have at Havieron.
Stephen H asks does the statement every drill hits mineralisation still hold true?
Yeah yes, in a word - so yeah look this is, it's this beautiful look- we shouldn't call it a pipe you know or a cylinder - it's a series of nested intrusives, but it is kind of this pipe or cylinder shape so you can kind of drill into it from a lot of different angles and still consistently hit mineralisation and that's what we're seeing when you're punching holes into this - it's a really consistent ore body and you know particularly through that southeast crescent uh so yeah - look we continue to hit mineralisation ranging from the lower end through to the spectacular. Plus, you know, one-thousand-gram meter intercepts - but yes, we continue to hit mineralisation today.
Turning to uh Mark S the oops uh that's gone - let me just take the next question from Nicholas - my apologies - are you seeing any improvements in the time it takes for the labs to assay cores?
Yes, uh gradual - they've invested, we our team was just out at one of the big labs that is, I think they said it was 98% at commission now so I think what we saw this year was as assay times walked up to say eight weeks from you know say three or four, you saw the quantity of assay information or intercepts coming through in our announcements walked down because more and more assays were held up in the labs.
As that starts to walk down, I think that's going to be a gradual process because there's a big backlog established now - but we actually might see an acceleration of you know of intercepts coming through. I don't want to flag that's going to be the next one, this is going to take months and months to flow through, but in the same way we saw a slowdown in the curve of results coming back, you ultimately should get the acceleration down the hill on the other side, so something to look forward to. There's been a lot of investment in those assay labs over the last you know 18 months and we're going to start to see - with the sector expects to start to see that the benefits of that.
Thank you very much indeed Shaun, turning to Mark S - the ore body is very much open at depth, is there a limitation to the practical mining depth of the ore body and if so, what is that depth?
Uh yeah, look good question - it does depend on mining methodologies, the and you know for instance in some of the bulks you might be leaving larger voids and you know the rock support nature and everything is and you know is different.
One of the reasons we talked before about using a SLOS down that southeast crescent is because it's high grade, you want to be able to chase that at depth so this more selective mining methodology, you know put in the pace fill and I’ve used Kallie as a really good example that uses the SLOS mining, they're down about 21-2200 meters vertical I understand. I think that shows you that if you have those ounces per vertical meter you can chase those kind of mining methodologies down at depth so that probably gives you a pretty good insight, as I think if we think about Havieron as ultimately perhaps having potentially, having two mining methodologies, a selective mining such as a sub-level open stack down on the southeast crescent and going deeper there and then still a deeper mine, but not as deep on the breccia assaying, it uses a larger bulker style mining methodology.
That's great thank you very much indeed, Martin R - his question reads as follows - would there be, would there need to be any modifications required to the Telfer mill to treat Havieron future feed?
Uh yeah look, there is that obviously, you know is captured uh by Newcrest that that own the mill - but what you're going to see the intent right now is actually to put Havieron ore down Train B, which is the newer of the two trains at Telfer and the reason for that is just simply the grade, the grade coming out of Havieron is very high, uh I think it's okay for me to say, Newcrest wouldn't mind me saying out of the open pit you get a much lower grade ore feed out of, out of Telfer, so you don't want to blend them together.
You want to keep those ores discreet to maximise the outcome from Havieron high grade ore, so you want to capture that particularly, that high grade copper coming through, so there are some modifications being worked through uh and you know what do we want to do, we ultimately want to optimise the recoveries of Havieron gold and copper and yeah, I'd like to think there's a little bit of upside risk in those recoveries as we continue to work through that as part of the cycle.
Thank you - Andrew W says - hi Shaun are you able to give your thoughts on how we compare the resource and growth you oversaw at Northern Star?
Hi Andrew, the look I think the first look Northern Star was a spectacular success story and continues to be, it's a you know it's a great organisation and you know as was Sakari, a tremendous growth story and Straits before that you know. I've been really fortunate to be involved in three stories that have all delivered you know 5 to 10 times multiple of invested capital - so you know my journey through mining's been really good.
I've been part of some fantastic teams and I like to think I’ve contributed to some of those teams as well, all of those teams, the look, I think about the comparison to Northern Star and it's a goodie, a launch asset uh you know Paulson’s was the launch asset at Northern Star, Bill Beament might be on the tape here, the former chairman and CEO of Northern Star- I don't think Bill would mind me saying , you know Havieron's you know a different scale up from Paulson’s - but from that Northern Star was able to grow to you know, just a world-class organisation and similarly I think we can do that with this - we have a better starting asset and what did we do at Northern, we invested in the drill bit you know - you don't drill you don't find you don’t mine, that was one of our mantras there and that's why you'll see me continue to invest in the drill bit you know.
The discipline i think, at Northern Star, we used to pride ourselves as being really good miners, really good underground miners - I think that's you know again, I've invested in the team, I want that same capacity here - but it all starts - you've got to be good at each stage of the mining, you've got to have the vision, you've got to invest in the drilling, you've got to be able to deliver that efficiently in a productive mine.
And then you've got to be able to process it and then you also want to be able to create the financial structures to optimise that for shareholders, so that's very much the same template we're going to be using here - and we do use here at Havieron and you know that's the opportunity ahead of us - that's what you know gets me out of bed every morning excited - is to grow the platform here at Greatland.
Thank you Shaun, I’m turning to Mark P's question - the presentation makes Greatland Gold look very attractive - what are the chances of a takeover and would one be welcome?
Well it was intended to you know to be attractive so that's good, but the look I think when I think about uh our share price and Havieron itself - the you know the challenge for me and for the Greatland team is that our narrative to the market is understood, well received and that we're able to grow Greatland as Newcrest grows, you know Newcrest as all right sorry, as Havieron grows - every day you know there's nine rigs spinning on this site - adding information you know giving us better understanding of the ore body, unlocking value giving us you know a better insight.
As to the future, so you know the challenge for us is to continue to grow Greatland because if we're unsuccessful in that - at some stage the hammer will fall and someone's going to take this asset off our hands- you know you don't find world-class assets in world-class jurisdictions being developed on a low capex low-risk profile often.
This is a precious jewel which we're fortunate enough to own and develop so I think, our risk of our share price risk is asymmetrical - if we're that if we're unsuccessful at delivering that narrative to the market our bear case is that takeover comes and we get the 35-50-70% premium and we're taken out.
Yeah I like to think the bull case is you know at least a theoretically unlimited upside in the share price as we fully unlock Havieron and look to leverage that platform for further financially disciplined growth - so that's the way I look at it you know, we are immature, we have a massive growth profile and every company in the sector wants a growth profile and that's all Greatland is right now.
Thank you Shaun - just turned into Steven H and his question - do you have a view on drill results from the Juri JV, Scallywag prospect slides look to have a red dot advanced prospect in addition to the one at Havieron?
Oh look the scallywag drilling you know it has a number of I guess what I’ll describe as tier one targets, uh yeah we are systematically going to work through them you know the I, you know the team here might pull me up on this - but you know we tried to do a lot of work with Geo-physics, Geo-chem you know to Geo-physical information to use these modern technologies in exploration to help us look undercover - to help us understand the opportunities better albeit you know we can have anomalies with higher grade gravity, sorry high density gravity and magnetic anomalies that look you know better than Havieron - but they might not carry mineralisation.
Another one might have a lower footprint but actually carry you know just as good of mineralisation, so I think you know exploration is a little bit of an art and science mixed together - so we've got a lot of opportunities and targets , I’m not a believer of genuinely ranking them - I think it's very hard to rank them you know in terms of which ones will be successful - but we've got a lot of opportunity and the way we approach it is incredibly disciplined.
We don't go in and pattern drill something and spend lots of money - we drill a hole we understand the stratigraphy - we compare it to what we expected to have - we recalibrate and then we decide about going back there and what that information has given us to reposition that hole where we should be looking. So, it's a very iterative process - we're excited about Scallywag we think there's some good opportunities in the portfolio and you should have confidence that we'll continue to pursue them with vigour.
Next question is when are we looking at updating the resources at Havieron, is it this December?
Yeah look, we need to work through that with Newcrest - I know you know our teams kind of try to you know recycle that information regularly to get - an aside from where that's going - uh last year we, the agreement with Newcrest is went out in December.
I think this year you know, I think it's that December through February period would be where you should expect to - so it's not far away - but you know both companies have to work on that together, but we, you know from a Greatland perspective, we'd love to get that out by the end of the year - otherwise very early in the new calendar year is our strong preference and again lots of meters drilled, nine rigs spinning and the results if you know, take a moment to kind of familiarize yourself with the results across this year - yeah there's some spectacular intercepts since the last update, so all of that gives us a lot of confidence about where an updated resource would take us.
Marcus H question reads as follows, can you touch on the drilling next to the Artemis ground, who I believe will also be drilling shortly?
Yeah - they are drilling across the border from us or across the tenement boundary from us uh which is good again - that will give us some insights on information. Uh yeah you know and God bless hopefully they're really successful, you know the best place to look for gold is where it's already been found so look - they've got a campaign underway uh and you know we'll monitor that with great interest as we do across the Paterson and if they are fortunate to find something that we really like the look of you know - hopefully we'd be first in the queue to work with them.
But you know they're a really good organisation, they have some good ground and you know, I wish them every success because their success is a really good pointer as to our success as well - so uh especially along that shared boundary with them, so yeah, we'll continue to monitor that.
Shaun we are currently coming up to the hour but if you're happy I’ll gladly throw some more questions at you, for every one question you seem to be answering there seems to be two or three following it, so if you're okay I’ll crack on with a few more questions if that's okay?
Now look I’ve got another 15 minutes if people, yeah looking I can see those questions flying in, so look - I’m enjoying it, hopefully the viewers are too, so pleased to do so.
David W asks - great PFS but why hasn't a decision to mine been announced?
Hi David , look yeah I think this gives you a lot of confidence as to where that decision is going but technically a financial investment decision would follow the Definitive Feasibility Study, again December quarter next year - I think you'll find Newcrest are sticklers for that process, but you know the fact that we already have a decline going down to the top of the ore body - I think you know - Havieron becoming a mine is the worst secret in the industry.
Alan N asks uh to remove ore efficiently from Havieron - would a second decline be built and where would it be?
I think the yeah again, this talks to mining methodologies , it talks the larger scale opportunity - yeah when we look at this PFS and perhaps if you look at the southeast crescent - three million ton per annum case in isolation - so that's where we think the feasibility study may go.
You're going to be kind of running that on a single decline basis, look my rule of thumb is you know with trucks you can probably manage about three million tonnes per annum with various overtaking bays, upper decline with - and I think that's a lot of the planning that that the team's looking at that - so that's your single decline case, which is you know what we're presently working on.
I think when you start looking at the bulk mine to get out more than three million tons per annum, that's where you start thinking about uh a second decline, again look you know this could have shaft - it could have another decline for trucks - but if you have a look at what Newcrest does very well within their portfolio at Cadia they also use conveyor and dedicated conveyor declines, smaller cheaper straighter run it back towards Telfer I think - that probably gives you an area where I’m sure Newcrest would be very confident if that's what the economics said was the most viable bulk material handling methodology - again you know studies will run this to ground in a very disciplined way - but I do like to think that there's every opportunity to put a conveyor, underground conveyor into an ore body of this size and grade.
Thank you, Shaun, turning to John D - asks what sort of average crackle grades are we seeing would you say and what threshold would make the bulk breccia more commercial?
Yeah look - I think when you when you talk about the breccia - we tend to divide it into to you know into the general brecciated area and then into the crackle zone and then into the cemented breccias - and really what that is, is just how brecciate, how cracked the rocks are in that so, the more cracked up it is uh the more mobilised fluid the more mineralised mobilised fluid has had a chance to go in and fill those cracks - and you know cement them up, so to speak with gold and copper.
In the crackle breccia it's far less brecciated, far less cracked so ergo it carries less mineralisation. So really our drilling is targeted on that cemented breccia zones when we talk about the eastern breccia - when we talk about that northern breccia and that high grade corridor and even that northwest crescent and pod area, kind of we are talking about those more brecciated areas, which gives the opportunity to carry higher grade.
So that's what we're targeting on the drilling and what's really positive there is that as we drill, we're finding that the areas of the crackle breccia are retreating, as we better understand that the boundaries, as we drill more, we find more pockets of this great brecciated areas - but the cemented breccia here is really just halo material - that that might run at you know 0.2 grams so that's not what we target it's not really part - it's nice that you've got a little bit of mineralisation there if you're taking bulk material - so you bring it in.
But fundamentally it's that you know, it's that that higher grade brecciated area and the higher your bulk, different mining methodologies change your cut-off grades - obviously the more efficient the lower cost you can - the more scale you apply to something and you know if you look at something like a Cadia, which again is a Newcrest asset, the cost structure they achieve there is outstanding because of this beautiful block caving methodology.
One of the great advantages that we have with Newcrest isn't just that they happen to be next door at Telfer, but they are one of the few mining companies globally and certainly the only one in Australia that runs both a block cave, sub-level caves and stoping - so they've got the expertise - they have the confidence - they have the experience to deliver any of those mining methodologies and understand their application well, so that's part of the beauty of the joint venture - is that expertise that you know we collectively bring to the table.
Shaun thank you, uh let's go with a question from Devshe who asks can you talk us through the company's progress with regards to divesting assets where you don't see them being a tier one asset?
Yeah look this all comes down to the competition of capital - of scarce capital within Greatland, yeah I quite like you know the properties in Tasmania - I think they've got you know they you know they are reasonably attractive on some metrics with high probabilities of mineralisation.
To some extent we wouldn't like to let them go because of that, so we'd ideally probably continue to have some holding there, but having said that - the scale of their - the potential size of them as we presently envisage it just does not compete with a Havieron. Uh that's why we like Ernest Giles, because we think it's elephant country - uh it can have a similar size prize in that region - so it attracts capital.
If you know the drill rigs are attracted to go there, so look as part of being disciplined managers of our portfolio you know I’ve flagged previously that we're assessing those Tasmanian assets and perhaps they are the ones that we trim at this stage - but equally we'd like to bring other opportunities in, particularly other opportunities that we think have the capacity to be Havieron ilk - to have that world-class scale to them - and that's certainly what we spend a lot of time trying to identify.
Stuart H asks will DDH1 and Mitchell Services drill through the Australian summer barring Christmas?
Uh yes - so at site look I think when you start to get into true exploration drilling with very limited camp features, as it really gets hot and as it happens it kind of gets hot and potentially wet out in this area of Australia during the winter - that's not great conditions for drilling - but when you've got more of a proper or I don't want to use the word proper - a more substantive camp set up as you have with Havieron which also has again the benefit of being supported by Telfer- well then you can drill through the you know 365 days a year, so yeah there'll be no slowdown over summer.
Obviously you know there's a lot of thought around safety and work practices and all those things and you know both Greatland and Newcrest you know put a lot of focus and energy into that - we've got a lot of confidence around our joint venture partner in that area and you know where there are safety opportunities to learn and work together I think, again it talks to the nature and the strength of the relationship but yeah and again Newcrest has 35 years’ experience working in the Paterson region, so again beautifully placed to understand those - how to manage those issues - but no, we'll be drilling through the year and Havieron will just continue to grow with that.
Uh this might be a difficult question to answer but we'll give it a go, this is from Liam R who's from a telegram group who asks - what would be your drink of choice at the one-pound share party?!
The look, I think I think we'll be popping champagne corks at the uh at the one pound share party - so that's a, that's a easy answer - thanks Liam!
Well, look Shaun we are coming up to the 15 minutes extension you very kindly gave us and I do want to get a few closing remarks from you to really just give us a snapshot of how you see the future and I know that feedback's important and I will shortly divert investors to provide you with feedback - so if I may if I could just ask you for a few closing comments to wrap up with and then as I say I’ll redirect all those investors on the call to give you their thoughts and expectations.
Yeah please do look - firstly just thank you Mark and thank you for everyone who's tuned in - yeah I really enjoyed the webinar, I enjoy the QA interaction, I’m hoping to get up into London in the new year and hopefully have some kind of town hall opportunities to meet more of the shareholders in person.
But uh look I think if you're going to take something away from today it's look we really - this is a stage one study - but Havieron is ahead of us - there's a magnificent opportunity tier one asset, tier one location, tier one partner and we're delivering it at a very low capex - beautifully set up for a mid-cap, 12 months of runway that the existing debt facility provides and this high margin development with this second lowest cost gold producer on the planet and then we tie that all together with the forward looking opportunity to continue to invest in the drill bit - get another 90,000 meters of growth drilling and unlock the full potential in that bulk size scale of Havieron - so yeah it's a tremendous opportunity and you know the team here does a great job and we're enjoying walking this forward.
Shaun, thank you very much indeed once again for your time and uh for updating investors this morning - could I please ask investors not to close this session as I will now automatically redirect you for the opportunity to provide your feedback in order the management team can really better understand your views and expectations - this only takes a few moments to complete but I’m sure will be greatly valued by the company.
On behalf of the management team of Greatland Gold we'd like to thank you very much for attending today's presentation, that now concludes today's session so good morning to you all.
Video: https://www.youtube.com/watch?v=65pYtW9DVus&t=2s
Slides: https://greatlandgold.com/wp-content/up ... -Final.pdf
Main Presentation
*Slide - Growth Story - Three pillars of growth are to:
- 1/ Expand Havieron, deliver it on time and budget to the benefit of all shareholders, it's a tremendous prize as our flagship asset
- 2/ Continue to accelerate exploration, invest in the drill bit, develop the value within the portfolio and create the next Havieron for our shareholders
- 3/ Pursue opportunistic growth, be disciplined managers of our asset portfolio and look for opportunities to bring value in.
*Slide - SE Crescent PFS
- Really a phase one pre-feasibility study, centred on the southeast crescent
which is a high-grade backbone to Havieron but only a fraction of the asset and
study is really just on a fraction of that south-east crescent; you could describe this as a study on a fraction of a fraction of the ore body
- Tremendous outcome and is really the entrée into the main course which is really starting to measure up as a very high-quality world-class asset
- Gives us the opportunity to really unlock the whole value of the asset and gives us a view about where that journey is going
*Slide - Hav Growth Journey
- Started the decline early, risk for GGP in terms of partnering with a group like Newcrest is that they might want to sit back and drill this out like a pin cushion and do a huge amount of study and then develop this massive scale mine which everyone knows it has the potential to be. But of course, we would have been sitting here for years and we would have had an absolute wall of CAPEX ahead of us when we hit that point.
- Instead, it's being developed in this staged approach which is tailor-made for a mid-cap balance sheet like GGP, we've started the decline early, we've punched down into the southeast crescent and now we've got the initial stage one study which really just unlocks this southeast crescent.
- Then in parallel with that we continue to work up that southeast crescent and understand that better with the feasibility study in late next year but also as we drive down towards the top of the Havieron ore body, we create drill platforms that provide the opportunity to punch into that and increase the cycle time and reduce the cost of drilling out that bigger picture in understanding the northern breccia, eastern breccia and that high grade northwest corridor that we're starting to see across Havieron and really look at a broader bulk mining picture which unlocks the full potential of Havieron.
*Slide - Hav Maiden SE Crescent PFS
- This next slide tries to capture the tip of the iceberg on some of the key punchline numbers.
- Only a fraction of the existing mineral resource estimate i.e.,14 million tons out of 52 million tonnes so 28% of the current MRE.
- What it does delivers even at that small size is significant free cash flow and an IRR (Internal Return Rate) of 27%. Two factors have gone into delivering such a high IRR on what is a limited scale project in the context of the overall Havieron.
- This first limited scale edition of Havieron has to carry all the capex of developing down that decline, getting in those underground declines to unlock the ore body, roads, powerlines etc and still only leaves a 73 million USD hurdle for GGP to fund. Remember we've already got 50 million funded and that gives us a runway out to probably the balance of end of next year around this time when we expect the feasibility study to be delivered.
- So it gives us 12 months of runway and 73 million dollars to fund which as a fraction of our market cap is very modest and gives plenty of time to approach that and I’ll talk about banks and other opportunities that we have there and of course the other side of this is that world-class cost structure 643 dollars an ounce , we'll focus on this through the presentation but new GGP has the opportunity to be the second lowest cost gold producer on the planet so that's extraordinary .
*Slide - Hav Maiden Probable Ore Reserve
- Couple of points to note, firstly being that today we have our maiden ore reserve, previously we've had the resource, now with this study and infilled drilling we have a reserve. What's really important is that this reserve has seen the metal content of those 14 million tons notch up, normally there's a risk that that will fall away but in this case talking to the quality of the team, talking to the quality of the analysis that's been done and the very leveraging, the understanding of the Paterson that Newcrest have from 35 years should give people confidence not just about the resource and reserve number but about all the values all the figures that we use throughout this study.
- A picture is often worth a thousand words and you can see that dark red colour that's actually an outline of the stops under the sub-level open scoping and what you can see in that balance of the pink is all southeast crescent so high-grade material that sits outside of this mining case so you can see the upside and then again you know when we look at that southeast crescent we consistently drill it, consistently get good grades and you're actually seeing some higher grades and higher widths at depth and so far it looks like it plunges down to the centre of the earth.
- Going to continue to follow it, it's an absolute prize and this study focused on the southeast crescent so it is doesn't capture the bulk of it, so again this is the tip of the iceberg and we've got the cylinders on the side that hopefully kind of graphically represents where we are today and how many of those cylinders potentially fit into the long term size of this mine.
*Slide - Low CAPEX, Low Risk
- The low capex nature of this and low risk is exceptional so overall we've got this 123 million USD funding, we have 50 of that already through the Newcrest facility so that leaves us with 73 million USD which is a very modest value particularly when you take into account that there's a contingency in this of 64 million USD
- I talked about the confidence that we have in delivering the outputs of this study and again I want to recognise the value that Newcrest delivers in that partnership but we have a lot of confidence of delivering that and with those contingencies in there as well it gives us a lot of confidence there and importantly again, we have this 12 months of runway with the funding facility from Newcrest and then we can continue to pursue that over time and think about how to draw down the rest of those funds through a combination particularly of debt that we're currently looking at.
*Slide - Hav Leveraging Existing Infrastructure
- This slide talks to the brownfield nature of Havieron, we get to leverage the existing Telfer mining for structure and that's not just the processing plant there's the workshops, camp, stores, critical spares, airstrip all in place and all of that we get to utilise to create this low risk, low capex start-up of Havieron
- Also worth noting there that the discovery hole Hav 05 was drilled in 2019 and the results came back from that in 2019, just 2021 today and already we're a long way down the track to this actually being an operating mine so it shows the benefit of having Newcrest as a partner and having this infrastructure to leverage off
- Talked a lot about the physical infrastructure but the people infrastructure of around 1200 people in situ at Telfer collectively with 35 years of mining experience in the Paterson again gives this great value and insights on the cost and great understanding of the geology of the processing, all of which we get to utilise and leverage to deliver Havieron in a low risk and confident way.
*Slide - Hav Starter Mine Production profile
- Next slide looks at this start of mine production and you can see again one of the things that really jumps out is that grade of 4.58 grams per tonne gold equivalent, that is a spectacular grade and drives so much of the quality of this outcome and again hopefully it comes across but although today's presentation is around this two million ton per annum mine, what you actually have been taken to the feasibility study is a 3 million tonne per annum case.
- So that's 50% growth just centred on the southeast crescent which starts to give you an insight as to the ambition that the joint venture partners have for Havieron and in addition to that we'll talk about the bulk case later but you know this very special part of the mine, this higher grade southeast crescent, this start of the mine does carry this tremendous grade and then we deliver this growth with a much larger feasibility study assumption that is subject to ongoing drilling and everything we think will hang together well.
*Slide - Hav Low-Cost Starter Mine
- We get into a couple of great slides here which talk to the cost of Havieron, you see we sit there well and truly in the lowest quartile and that delivers you fantastic margin per ounce produced, not many mines sitting there to the left of screen, but the ones that do sit there are absolute bellwethers of the sector, Havieron sits in tremendous company there and sit there in the lowest quartiles of our peer group - so a really handsome slide there when you're looking at plus 1775 gold price and a cost of 643 dollars an ounce, a thousand dollar plus margin per ounce is special and we should really appreciate that for what it is.
- The second slide here under cost is potentially my favourite slide in the deck and I’ve just got to recognise Chris the CFO for us who actually got the data on this, it was a great initiative and GGP is positioned as a company with all in sustaining cost (AISC) as second globally. We would be the second lowest cost gold mine on the planet, that is a tremendous outcome and I think what's more is that there potential to actually walk down the cost structure looking at different mining methodologies even within the southeast crescent as part of the next study, adding bulk to the mine and getting that scale and then importantly one of the assumptions in the study is that no other ore is going through the Telfer plant, that's a 20 million tonne per annum nameplate facility and this study assesses two million tons going through it. So clearly as we increase the size of the southeast crescent, as we look at the balance of that zonation and bulk mining across there, there's an opportunity to share those fixed costs and overheads of Telfer across a bigger ore body.
- For those following Newcrest, Newcrest identifies that they're really focused on adding mine life to Telfer - so given the history of Telfer I think that's highly probable and when you look at that , you can see this downside risk because we're just using Train B of that Havieron processing facility.
- If Telfer’s also using Train A you get that cross subsidisation of costs, good for both mines and then what does all this low cost do, it drives the IRR up and what's really important as well with this low cost is we've talked earlier about that capex. This starter mine has carried all that capex of the full mine - as you expand it, as you bring incremental ore, it only has to cover the incremental capex of just driving down to that new layer, it doesn't have to build another road or another power station to get down the 400 meters and set up all that in-mine infrastructure. All of that's being carried by this little starter mine which just talks very strongly to the quality of this asset.
*Slide - Cash Flow Expansion
- Next slide talks about how we generate that cash flow, we obviously have development capex and then we generate funds beyond that and hopefully it gives you know some sense of the scale up that we can deliver as we take it beyond this two million tonne pre-feasibility and what I particularly like about this is its self-funding and tailor-made for a mid-cap - so we get in there and establish this mine, we get down there and we generate free cash flow.
- Then we reinvest a lot of that free cash flow into unlocking the full value of Havieron and this study really just gives us this line of sight as to what the metrics of Havieron can be and the fact that we can unlock that using these initial cash flows is fantastic in terms of minimising dilution to our shareholders.
*Slide - Evolving Mining
- I enjoy this slide as it sets out the way this mine has been planned, it's this lovely sub-vertical all-body underground mining, gravity is your friend and what's good about this is the flexibility it highlights. You've got four vertical mining fronts, what you want is flexibility that you know lets you manage risk, lets you keep your gear productive and why is this sub level open stoping (SLOS)? Because it's high grade with really defined boundaries, so you want to minimise dilution but also I talked before about this south-east crescent, how we continue to hit it at depth and it just seems to plunge down into the earth, we want to be able to follow it down so you want to be able to put in your pace feel and manage the size mysticity to follow this at depth and again on this page we also talked about the fact that these big stopes look a little bit like a Cali - that's the new mine across in the northern territory, a fantastic mine it was one of those special mines sitting to the to the left of us on cost structure that's down to about 21-2200 meters and still has fantastic cost because it's got really good ounces to vertical meter and has this same kind of large stoping under a SLOS system and of course just to reiterate what we're actually looking to take forward into the feasibility study is actually 50% bigger at a 3 million ton per annum SLOS assumption which looks like you know it can potentially hang together if we continue to get the continuity in this southeast crescent as expected
*Slide - HAV World Class Project
- The takeaway from this slide is look with nine drills running, you know we've got a lot of meters going into this giant deposit, it's a big area to drill out particularly from surface so again getting that decline in early is going to give us drill platforms and there's some 50,000 meters that have been drilled since the cut-off for this pre-feasibility. So, remember that was back in February, there's been 10 months of information that we've all seen that hasn't been captured in this pre-feasibility study plus there's a plan to do 90,000 meters of drilling over the next financial year to June 2022.
- So that gives you some context as to the upside that we have within the project we can deliver with all that information and some of the drill intercepts that we included in the RNS talk to the quality of the new drilling campaign.
*Slide - HAV Mine Growth
- The thing I love most of all about Havieron and indeed GGP is the opportunity that remains ahead of ourselves, that we are still very much in the growth phase, this is the same reason people were buying us 12 months, six months, six weeks, six days ago is around where Havieron is headed overall.
- That's what this slide talks about, we have a really good sighter now on the south-east crescent, I think the cost structure there and the capex probably exceed expectations but what we see across that broader zonation across that north-west crescent, that corridor moving through that northern breccia is where we're trying to stitch together these higher grade areas and getting that corridor of high grade.
- And potentially most exciting of all is to have these big intercepts sitting in this whole new area, different geo-chemistry, different ore body kind of sitting or deposit sitting to the eastern flank of Havieron is pretty exciting to have sitting to the east of what is already a world-class ore body. So, you know that's something that we spend a lot of time thinking about and it just talks to the quality of this asset and the quality of the growth. You don't need the eastern breccia for this to be world-class but to add that really becomes something significant.
*Slide - HAV sustainability
- I think we'll talk about sustainability briefly; we want to be a leader in this field because what it does is, it increases the universe of potential investors in addition to the really strong environmental outcomes.
- We'd like to target zero carbons within five years on net carbon, within five years of being in production. We need to engage with Newcrest around that and understand what we can do together but I’m really confident around the way Newcrest thinks about these issues of sustainability and we want to be great partners in that because we believe in it, we want to be leaders in the field but we also think it makes really good business sense.
*Slide - Exploration Paterson
- Just around the portfolio itself, we love the option value on our ground around Havieron and we're going to continue to invest in the drill bit and indeed we've added ground here, we've significantly increased our footprint and we'll continue to look to do that. We'll continue to look to drill there and we currently have a rig spinning there on scallywag.
- In terms of the overall portfolio again, we want to invest in this, we want to invest in the drill bit and we also want to be disciplined managers of our portfolio and we want to keep adding good quality assets that can compete for drilling budget with Havieron.
- Ernest Giles is top of that list, really excited about getting in there and we do need to get the access agreement done with the first nations. I’ve been working on that over the last six months and that's progressing well so we would like to think we've a chance to be drilling that next year and again great option value but we'll also be spending time on Panorama in the 12 months ahead.
*Slide - ESG
- ESG remains really important to us and a critical path of what we want to do and we love the copper aspect of our ESG profile. No better way to invest in EV and battery than through copper and I did hear Sandeep say from the Newcrest presentation today that the best gold companies to invest in are those with a copper profile in them - and we certainly fit that box as well.
*Slide - Human Resource Focused
- I do want to just pause for a moment here for those that that know me and have known me from other companies. I'm a huge believer in the team, in building our team in that we've invested in our team through the capacity we've added around safety, around mining engineering and we've augmented our resource and our finance team. It speaks volumes in the quality of people we're attracting because of the quality of the asset, we have also added to the board with Paul Hallam and we'll look to add further to the board , we really want to build the team because it's the team that's going to deliver our ability to understand the asset, to contribute to it and to scrutinise it to make sure that Havieron is developed for the benefit of GGP shareholders.
- The second part of the people, I won't spend a lot of time on this other than just to recognize an old friend there with Callum who remains part of the GGP family and had a tremendous contribution but also bringing in additional reinforcements such as Stuart Masters on the JORC board, Simon Hanrahan and Dr. Ian Ritchie on for processing. We're really lucky to have that augmented capacity within our team and again something I’ve really focused upon.
*Slide - Building a multi-asset company of significant scale
- I talked about the funding process, we've drawn about 20 million of that 50 million debt, that 30 million at least ostensibly is forecast to last us till the feasibility study scheduled for the December quarter so around 12 months away, but we also have banks lined up around the block too and we've received term sheets for debt and these are from tier one institutions, these are from named main street banks and I think today's PFS, a maiden reserve showing that cost structure and showing the margin is only going to further enhance their excitement about being part of it.
- This is a brownfield risk development with Newcrest, it's right down the fairway for banks as they perceive it as low risk - which works really well for us - so when we talk about that remaining 73 million USD of funding there's a great opportunity to tackle that with bank debt.
- That's not to say we won't consider equity components as well, but you know bank debt is certainly something we're going to understand. I've got a background in it and we certainly understand the magic of leverage for shareholders so look with that I just want to again say thank you for tuning in but I’m keen to move across into the questions, so with that I’ll invite the moderator Mark to fire away.
Q&A Session
Shaun if I could start off with these ones which I think kind of summarise a lot of those that we received ahead of the event - first question reads as follows - why did Newcrest decide to release this PFS now and not wait to include more information about Havieron?
I think, yeah this is very much a stage one study, uh it really identifies you know this southeast crescent, you know the low-cost, low capex nature of it which I think probably may have exceeded some people's expectations. So, I think that's really strong - having said that you know I talked about it before, this is the entree before the main course so that the scale of this is not huge.
Why would they want to do this, well it makes a huge amount of sense from a mine planning uh you know Newcrest puts around us 250 million USD into Havieron prior to Greatland and its shareholders contributing in part through that loan agreement so yeah it makes a huge amount of sense that they want to understand and confirm that it’s a sensible investment.
Some of you may have also noticed they've invested a further 180 million in Telfer to keep the lights on there - they don't want a gap year at Telfer, they don't want to lose those 1200 people in situ there and we don't want them either to lose those people. You know that's all part of the low-risk nature of this development so I think what does this do, it confirms that we're on the right track, it confirms the quick start of Havieron was the right course to take and it tells us we're on the right track so yeah I think these things are multi-factorial but I think it gives you this lovely line of sight as to what Havieron can become.
As a long-term investor in GGP, how does this PFS change your thinking about Havieron as a tier one asset?
I think it confirms my thinking about this being a world-class asset and a world-class asset being developed you know in a tier one jurisdiction. Australia is a great place to be a mining company but Western Australia is the jewel in the crown and then again, we're doing it with a tier one partner in Newcrest, Australia's largest miner with 35 years’ experience here in the Paterson and all their infrastructure and people infrastructure to leverage upon, so what does this tell me?
It tells me this is a world-class opportunity, it's a low risk low capex and it confirms that low capex, it confirms the low cost structure, it confirms the, you know that the bigger opportunity uh that what we can discover here, so I think this is more affirmation for me but perhaps as I kind of mentioned before, that capex hurdle, that cost structure are maybe a little bit better than I was expecting which is brilliant, it's uh it's always nice when the risk is on the downside and again for those that kind of follow mining companies I think when you're converting resource into reserve and actually seeing the metal content come up - I think that also speaks volumes to the team - but also the quality of ore body.
I know you did touch on funding but we did receive a number of pre-submitted questions relating to funding, will Greatland need to borrow significant amounts to fund the development of Havieron and will that be possible to obtain?
Well look, I said before it's a good question, look I think the way I look at funding is in three parts you know. Firstly we have this existing facility in place, we’ve drawn about 20, we have 30 million dollars of runway ahead of us on that which is expected to take us to delivery of the feasibility study in the December quarter, so we've got 12 months of runway ahead of us before we expect to have to contribute to the development of Havieron - so that's a lovely you know time frame to have it ahead of us.
We're already engaging with banks so I think the question was you know will we have to borrow a lot of money? Well it's always nice to be offered a lot of money from the bank, we won't want to you know, we want to right-size our debt but I think for banks to be able to invest in you know a low risk jurisdiction, high quality mine, low risk partners (he says high in presentation but think it was a mistake) being developed with a brownfield development is exactly where banks want to have exposure too, so we have a lot of engagement.
We've received term sheets already, uh we're going to be pursuing that and what does that do, it reduces the equity requirement if any to move forward - so I think it's a luxurious position for us to be in and it all talks to this capex profile is just tailor-made for a mid-cap - yeah it really is set out before us magnificently.
The final kind of pre-submitted thematic question that we had was around (and we received a number of them), around your relationship with Newcrest and really just relating and if you can give a bit of colour to how is your relationship with Newcrest and do you see this positive momentum moving forward?
Yeah look hopefully it came across in the presentation , yeah we really respect Newcrest, we like to think that respect is mutual certainly, that the exploration teams have worked together really well. Looked at you know, I think some people have observed there's a little bit of Newcrest experience in our team but I think that's all part of building the relationship of having existing relationships understanding the language, understanding the gold book standard that they approach studies in, having existing connectivity.
I think all of those were done to enhance the relationship, it's an important relationship for us, we think it's moving really well, the feedback I get from Newcrest is really positive and I don't think we could be in better hands in terms of all the experience they have in the Paterson leveraging their Telfer infrastructure to develop it and again it's us, you know the opportunity for us is not just to sit back but to understand it, to contribute to it, to be that peer review with Newcrest and indeed to scrutinise it to make sure we optimise the outcome for our shareholders and I think we do that well, I think we've got additional capacity to do that with and again it should give people a lot of confidence but it's built off a relationship of strength with Newcrest.
That's great thank you and thank you once again to those that submitted questions ahead of today's event and of course we did try to address a number of those questions throughout the slides during the presentation in addition to those we've just asked.
Shaun, if we could just turn to the live Q&A and perhaps I could start off at the top in time preference this one came in at 9:32 from Luke, so thank you Luke for your question - Why are Greatland using a gold price of 1750 as opposed to 1500 that Newcrest used in the PFS resulting in a lower AISC stated by Greatland than Newcrest?
Yes, good question and it's good to clarify that so look where is the current spot market is how we think about that - especially with gold and copper where you can hedge those outcomes we've used a gold price a bit under the current spot at 1750, we've used a copper price at 9000 which was meant to be a bit under spot but as those following the market would know copper price is going to surge in the last kind of 10 days so it's it we're a bit, we're kind of well under that now.
Yeah Newcrest is using you know a price deck which is you know 15-20% below market, you know that's a way to approach these things but I think to understand what how the asset would perform in the current market, prices may go up, prices may go down - but certainly when I look at things corporately, we tend to focus around a spot outcome and you know I think that's the right way to look at things.
Equally i think we get the best of both worlds, a lot of the mine planning here has been done on a far more conservative price deck, what does that mean? It means this asset can perform to expectations through the cycle, so a notch down or a pullback in gold or copper prices or combination isn't actually going to change the metrics of this mine, isn't going to change the performance, isn't going to change the economics of the material - so we are getting the best of both worlds there and you're right the - where our assumptions are basically the same as Newcrest other than with a slightly higher copper price - of course that gives us a slightly higher credit in the cash cost which notches them down a little bit - but otherwise you know we've basically used the same technical studies and platform as Newcrest, just with different macro-economic assumptions laid over them and we think using under-spot a fraction conservative but we think tells the story.
Devshe asks, do you expect the release of the PFS to attract significant institutional investment?
Yeah look - my background you know with Northern Star as Australia’s I think second largest gold miner, Sakari before that out of Singapore and Straits were all multi-billion multi-asset companies with hugely institutional investor bases. You know my strategy with Greatland is to maintain the strength that we've historically had with retail investors and then augment that with institutions.
I think like most people whether it be retail or an institution, you know they often don't buy on the first meeting, it's building the relationship, it's building the trust, it's delivering what you say you're going to deliver - so we've really been building those institutional relationships over the last six months - you know we've seen some you know institutional institutions creeping into the register.
I think this study is only going to enhance that attractiveness and you know to be honest I’ve had a couple of chats with insto’s today even and yeah, I think it's been well received and I think it positions us really strongly - so I think it's very positive our engagement with institutional investors just now.
Paddy G asks which of the growth targets excites you the most - the eastern breccia, the north-west pod or the external targets like Zipa, Havieron North and Meco?
Oh well that's a that's a that's a ripping question! Look to some extent I think the lowest risk target….I'll answer it in two parts - the lowest risk target is (or three parts rather), the lowest risk part target is that north west corridor kind of bringing together these high grade areas that we're seeing and knitting together this trend that we're seeing in that northwest corridor that brings that fresh air together - I think that's really exciting - it's going to take time to drill but yeah it's very positive in what we're seeing.
That eastern breccia is just extraordinary you know, to find widths of you know 200 meters sitting in the shadow of Havieron (referring to drill intervals), different geo-chem signature is spectacular. Yeah, I can't help but be really excited about that you know when you already have an ore body and then you've got you know what looks like a mineralised extension of some 650, 750 meters sitting next to it - yeah wowee that’s good fun - so yeah looking forward to drilling that out.
The option value that the banker in me always enjoys a bit of option value, sitting in those proximal targets, uh so we do want to drill them. I think we have similar on the Scallywag tenements that sit next door - but I think all three of them bring you know different stories to the growth and that multi-layered growth profile that we have at Havieron - it all adds to why this is a world-class system.
Stewart H - he asks can we expect regular updates from tenements outside Havieron and particularly when assays have been sent into tech and when visible mineralisation is seen by the on-site scanners?
Uh look - we tend to work well - we do work with Newcrest in a very cooperative way. We talked about the relationship before around effectively kind of trying to get our drill results out in a six weekly cycle, that's really good of Newcrest because they typically work in a quarterly cycle so I think again it's - there's a little bit of give or take in any good relationship.
The yeah look, we do do TruScan at site, so we do get a little bit of an indication as to where drilling's going - having said that there's no substitute to assays, so we're always going to want to finish the assay process, finish the quality control QHQC procedures before we announce anything, so I think that should be the expectation.
It's really important from the integrity of our process that we fully complete that before we share information with the market and again I think that should be giving confidence, you know, part of the benefit I’d like to think Greatland would do this in any case by ourselves - but part of the benefit in being partnered with a world-class organisation like Newcrest is the quality of those processes, the quality of the risk assurance and all that feeds into the confidence you can have in the study numbers and why you see things like when we convert a resource into reserve with additional density of drilling, the metal content actually notching up rather than dropping down, as people go our estimates overestimated that so I see that as all the upside about the quality of the team we have at Havieron.
Stephen H asks does the statement every drill hits mineralisation still hold true?
Yeah yes, in a word - so yeah look this is, it's this beautiful look- we shouldn't call it a pipe you know or a cylinder - it's a series of nested intrusives, but it is kind of this pipe or cylinder shape so you can kind of drill into it from a lot of different angles and still consistently hit mineralisation and that's what we're seeing when you're punching holes into this - it's a really consistent ore body and you know particularly through that southeast crescent uh so yeah - look we continue to hit mineralisation ranging from the lower end through to the spectacular. Plus, you know, one-thousand-gram meter intercepts - but yes, we continue to hit mineralisation today.
Turning to uh Mark S the oops uh that's gone - let me just take the next question from Nicholas - my apologies - are you seeing any improvements in the time it takes for the labs to assay cores?
Yes, uh gradual - they've invested, we our team was just out at one of the big labs that is, I think they said it was 98% at commission now so I think what we saw this year was as assay times walked up to say eight weeks from you know say three or four, you saw the quantity of assay information or intercepts coming through in our announcements walked down because more and more assays were held up in the labs.
As that starts to walk down, I think that's going to be a gradual process because there's a big backlog established now - but we actually might see an acceleration of you know of intercepts coming through. I don't want to flag that's going to be the next one, this is going to take months and months to flow through, but in the same way we saw a slowdown in the curve of results coming back, you ultimately should get the acceleration down the hill on the other side, so something to look forward to. There's been a lot of investment in those assay labs over the last you know 18 months and we're going to start to see - with the sector expects to start to see that the benefits of that.
Thank you very much indeed Shaun, turning to Mark S - the ore body is very much open at depth, is there a limitation to the practical mining depth of the ore body and if so, what is that depth?
Uh yeah, look good question - it does depend on mining methodologies, the and you know for instance in some of the bulks you might be leaving larger voids and you know the rock support nature and everything is and you know is different.
One of the reasons we talked before about using a SLOS down that southeast crescent is because it's high grade, you want to be able to chase that at depth so this more selective mining methodology, you know put in the pace fill and I’ve used Kallie as a really good example that uses the SLOS mining, they're down about 21-2200 meters vertical I understand. I think that shows you that if you have those ounces per vertical meter you can chase those kind of mining methodologies down at depth so that probably gives you a pretty good insight, as I think if we think about Havieron as ultimately perhaps having potentially, having two mining methodologies, a selective mining such as a sub-level open stack down on the southeast crescent and going deeper there and then still a deeper mine, but not as deep on the breccia assaying, it uses a larger bulker style mining methodology.
That's great thank you very much indeed, Martin R - his question reads as follows - would there be, would there need to be any modifications required to the Telfer mill to treat Havieron future feed?
Uh yeah look, there is that obviously, you know is captured uh by Newcrest that that own the mill - but what you're going to see the intent right now is actually to put Havieron ore down Train B, which is the newer of the two trains at Telfer and the reason for that is just simply the grade, the grade coming out of Havieron is very high, uh I think it's okay for me to say, Newcrest wouldn't mind me saying out of the open pit you get a much lower grade ore feed out of, out of Telfer, so you don't want to blend them together.
You want to keep those ores discreet to maximise the outcome from Havieron high grade ore, so you want to capture that particularly, that high grade copper coming through, so there are some modifications being worked through uh and you know what do we want to do, we ultimately want to optimise the recoveries of Havieron gold and copper and yeah, I'd like to think there's a little bit of upside risk in those recoveries as we continue to work through that as part of the cycle.
Thank you - Andrew W says - hi Shaun are you able to give your thoughts on how we compare the resource and growth you oversaw at Northern Star?
Hi Andrew, the look I think the first look Northern Star was a spectacular success story and continues to be, it's a you know it's a great organisation and you know as was Sakari, a tremendous growth story and Straits before that you know. I've been really fortunate to be involved in three stories that have all delivered you know 5 to 10 times multiple of invested capital - so you know my journey through mining's been really good.
I've been part of some fantastic teams and I like to think I’ve contributed to some of those teams as well, all of those teams, the look, I think about the comparison to Northern Star and it's a goodie, a launch asset uh you know Paulson’s was the launch asset at Northern Star, Bill Beament might be on the tape here, the former chairman and CEO of Northern Star- I don't think Bill would mind me saying , you know Havieron's you know a different scale up from Paulson’s - but from that Northern Star was able to grow to you know, just a world-class organisation and similarly I think we can do that with this - we have a better starting asset and what did we do at Northern, we invested in the drill bit you know - you don't drill you don't find you don’t mine, that was one of our mantras there and that's why you'll see me continue to invest in the drill bit you know.
The discipline i think, at Northern Star, we used to pride ourselves as being really good miners, really good underground miners - I think that's you know again, I've invested in the team, I want that same capacity here - but it all starts - you've got to be good at each stage of the mining, you've got to have the vision, you've got to invest in the drilling, you've got to be able to deliver that efficiently in a productive mine.
And then you've got to be able to process it and then you also want to be able to create the financial structures to optimise that for shareholders, so that's very much the same template we're going to be using here - and we do use here at Havieron and you know that's the opportunity ahead of us - that's what you know gets me out of bed every morning excited - is to grow the platform here at Greatland.
Thank you Shaun, I’m turning to Mark P's question - the presentation makes Greatland Gold look very attractive - what are the chances of a takeover and would one be welcome?
Well it was intended to you know to be attractive so that's good, but the look I think when I think about uh our share price and Havieron itself - the you know the challenge for me and for the Greatland team is that our narrative to the market is understood, well received and that we're able to grow Greatland as Newcrest grows, you know Newcrest as all right sorry, as Havieron grows - every day you know there's nine rigs spinning on this site - adding information you know giving us better understanding of the ore body, unlocking value giving us you know a better insight.
As to the future, so you know the challenge for us is to continue to grow Greatland because if we're unsuccessful in that - at some stage the hammer will fall and someone's going to take this asset off our hands- you know you don't find world-class assets in world-class jurisdictions being developed on a low capex low-risk profile often.
This is a precious jewel which we're fortunate enough to own and develop so I think, our risk of our share price risk is asymmetrical - if we're that if we're unsuccessful at delivering that narrative to the market our bear case is that takeover comes and we get the 35-50-70% premium and we're taken out.
Yeah I like to think the bull case is you know at least a theoretically unlimited upside in the share price as we fully unlock Havieron and look to leverage that platform for further financially disciplined growth - so that's the way I look at it you know, we are immature, we have a massive growth profile and every company in the sector wants a growth profile and that's all Greatland is right now.
Thank you Shaun - just turned into Steven H and his question - do you have a view on drill results from the Juri JV, Scallywag prospect slides look to have a red dot advanced prospect in addition to the one at Havieron?
Oh look the scallywag drilling you know it has a number of I guess what I’ll describe as tier one targets, uh yeah we are systematically going to work through them you know the I, you know the team here might pull me up on this - but you know we tried to do a lot of work with Geo-physics, Geo-chem you know to Geo-physical information to use these modern technologies in exploration to help us look undercover - to help us understand the opportunities better albeit you know we can have anomalies with higher grade gravity, sorry high density gravity and magnetic anomalies that look you know better than Havieron - but they might not carry mineralisation.
Another one might have a lower footprint but actually carry you know just as good of mineralisation, so I think you know exploration is a little bit of an art and science mixed together - so we've got a lot of opportunities and targets , I’m not a believer of genuinely ranking them - I think it's very hard to rank them you know in terms of which ones will be successful - but we've got a lot of opportunity and the way we approach it is incredibly disciplined.
We don't go in and pattern drill something and spend lots of money - we drill a hole we understand the stratigraphy - we compare it to what we expected to have - we recalibrate and then we decide about going back there and what that information has given us to reposition that hole where we should be looking. So, it's a very iterative process - we're excited about Scallywag we think there's some good opportunities in the portfolio and you should have confidence that we'll continue to pursue them with vigour.
Next question is when are we looking at updating the resources at Havieron, is it this December?
Yeah look, we need to work through that with Newcrest - I know you know our teams kind of try to you know recycle that information regularly to get - an aside from where that's going - uh last year we, the agreement with Newcrest is went out in December.
I think this year you know, I think it's that December through February period would be where you should expect to - so it's not far away - but you know both companies have to work on that together, but we, you know from a Greatland perspective, we'd love to get that out by the end of the year - otherwise very early in the new calendar year is our strong preference and again lots of meters drilled, nine rigs spinning and the results if you know, take a moment to kind of familiarize yourself with the results across this year - yeah there's some spectacular intercepts since the last update, so all of that gives us a lot of confidence about where an updated resource would take us.
Marcus H question reads as follows, can you touch on the drilling next to the Artemis ground, who I believe will also be drilling shortly?
Yeah - they are drilling across the border from us or across the tenement boundary from us uh which is good again - that will give us some insights on information. Uh yeah you know and God bless hopefully they're really successful, you know the best place to look for gold is where it's already been found so look - they've got a campaign underway uh and you know we'll monitor that with great interest as we do across the Paterson and if they are fortunate to find something that we really like the look of you know - hopefully we'd be first in the queue to work with them.
But you know they're a really good organisation, they have some good ground and you know, I wish them every success because their success is a really good pointer as to our success as well - so uh especially along that shared boundary with them, so yeah, we'll continue to monitor that.
Shaun we are currently coming up to the hour but if you're happy I’ll gladly throw some more questions at you, for every one question you seem to be answering there seems to be two or three following it, so if you're okay I’ll crack on with a few more questions if that's okay?
Now look I’ve got another 15 minutes if people, yeah looking I can see those questions flying in, so look - I’m enjoying it, hopefully the viewers are too, so pleased to do so.
David W asks - great PFS but why hasn't a decision to mine been announced?
Hi David , look yeah I think this gives you a lot of confidence as to where that decision is going but technically a financial investment decision would follow the Definitive Feasibility Study, again December quarter next year - I think you'll find Newcrest are sticklers for that process, but you know the fact that we already have a decline going down to the top of the ore body - I think you know - Havieron becoming a mine is the worst secret in the industry.
Alan N asks uh to remove ore efficiently from Havieron - would a second decline be built and where would it be?
I think the yeah again, this talks to mining methodologies , it talks the larger scale opportunity - yeah when we look at this PFS and perhaps if you look at the southeast crescent - three million ton per annum case in isolation - so that's where we think the feasibility study may go.
You're going to be kind of running that on a single decline basis, look my rule of thumb is you know with trucks you can probably manage about three million tonnes per annum with various overtaking bays, upper decline with - and I think that's a lot of the planning that that the team's looking at that - so that's your single decline case, which is you know what we're presently working on.
I think when you start looking at the bulk mine to get out more than three million tons per annum, that's where you start thinking about uh a second decline, again look you know this could have shaft - it could have another decline for trucks - but if you have a look at what Newcrest does very well within their portfolio at Cadia they also use conveyor and dedicated conveyor declines, smaller cheaper straighter run it back towards Telfer I think - that probably gives you an area where I’m sure Newcrest would be very confident if that's what the economics said was the most viable bulk material handling methodology - again you know studies will run this to ground in a very disciplined way - but I do like to think that there's every opportunity to put a conveyor, underground conveyor into an ore body of this size and grade.
Thank you, Shaun, turning to John D - asks what sort of average crackle grades are we seeing would you say and what threshold would make the bulk breccia more commercial?
Yeah look - I think when you when you talk about the breccia - we tend to divide it into to you know into the general brecciated area and then into the crackle zone and then into the cemented breccias - and really what that is, is just how brecciate, how cracked the rocks are in that so, the more cracked up it is uh the more mobilised fluid the more mineralised mobilised fluid has had a chance to go in and fill those cracks - and you know cement them up, so to speak with gold and copper.
In the crackle breccia it's far less brecciated, far less cracked so ergo it carries less mineralisation. So really our drilling is targeted on that cemented breccia zones when we talk about the eastern breccia - when we talk about that northern breccia and that high grade corridor and even that northwest crescent and pod area, kind of we are talking about those more brecciated areas, which gives the opportunity to carry higher grade.
So that's what we're targeting on the drilling and what's really positive there is that as we drill, we're finding that the areas of the crackle breccia are retreating, as we better understand that the boundaries, as we drill more, we find more pockets of this great brecciated areas - but the cemented breccia here is really just halo material - that that might run at you know 0.2 grams so that's not what we target it's not really part - it's nice that you've got a little bit of mineralisation there if you're taking bulk material - so you bring it in.
But fundamentally it's that you know, it's that that higher grade brecciated area and the higher your bulk, different mining methodologies change your cut-off grades - obviously the more efficient the lower cost you can - the more scale you apply to something and you know if you look at something like a Cadia, which again is a Newcrest asset, the cost structure they achieve there is outstanding because of this beautiful block caving methodology.
One of the great advantages that we have with Newcrest isn't just that they happen to be next door at Telfer, but they are one of the few mining companies globally and certainly the only one in Australia that runs both a block cave, sub-level caves and stoping - so they've got the expertise - they have the confidence - they have the experience to deliver any of those mining methodologies and understand their application well, so that's part of the beauty of the joint venture - is that expertise that you know we collectively bring to the table.
Shaun thank you, uh let's go with a question from Devshe who asks can you talk us through the company's progress with regards to divesting assets where you don't see them being a tier one asset?
Yeah look this all comes down to the competition of capital - of scarce capital within Greatland, yeah I quite like you know the properties in Tasmania - I think they've got you know they you know they are reasonably attractive on some metrics with high probabilities of mineralisation.
To some extent we wouldn't like to let them go because of that, so we'd ideally probably continue to have some holding there, but having said that - the scale of their - the potential size of them as we presently envisage it just does not compete with a Havieron. Uh that's why we like Ernest Giles, because we think it's elephant country - uh it can have a similar size prize in that region - so it attracts capital.
If you know the drill rigs are attracted to go there, so look as part of being disciplined managers of our portfolio you know I’ve flagged previously that we're assessing those Tasmanian assets and perhaps they are the ones that we trim at this stage - but equally we'd like to bring other opportunities in, particularly other opportunities that we think have the capacity to be Havieron ilk - to have that world-class scale to them - and that's certainly what we spend a lot of time trying to identify.
Stuart H asks will DDH1 and Mitchell Services drill through the Australian summer barring Christmas?
Uh yes - so at site look I think when you start to get into true exploration drilling with very limited camp features, as it really gets hot and as it happens it kind of gets hot and potentially wet out in this area of Australia during the winter - that's not great conditions for drilling - but when you've got more of a proper or I don't want to use the word proper - a more substantive camp set up as you have with Havieron which also has again the benefit of being supported by Telfer- well then you can drill through the you know 365 days a year, so yeah there'll be no slowdown over summer.
Obviously you know there's a lot of thought around safety and work practices and all those things and you know both Greatland and Newcrest you know put a lot of focus and energy into that - we've got a lot of confidence around our joint venture partner in that area and you know where there are safety opportunities to learn and work together I think, again it talks to the nature and the strength of the relationship but yeah and again Newcrest has 35 years’ experience working in the Paterson region, so again beautifully placed to understand those - how to manage those issues - but no, we'll be drilling through the year and Havieron will just continue to grow with that.
Uh this might be a difficult question to answer but we'll give it a go, this is from Liam R who's from a telegram group who asks - what would be your drink of choice at the one-pound share party?!
The look, I think I think we'll be popping champagne corks at the uh at the one pound share party - so that's a, that's a easy answer - thanks Liam!
Well, look Shaun we are coming up to the 15 minutes extension you very kindly gave us and I do want to get a few closing remarks from you to really just give us a snapshot of how you see the future and I know that feedback's important and I will shortly divert investors to provide you with feedback - so if I may if I could just ask you for a few closing comments to wrap up with and then as I say I’ll redirect all those investors on the call to give you their thoughts and expectations.
Yeah please do look - firstly just thank you Mark and thank you for everyone who's tuned in - yeah I really enjoyed the webinar, I enjoy the QA interaction, I’m hoping to get up into London in the new year and hopefully have some kind of town hall opportunities to meet more of the shareholders in person.
But uh look I think if you're going to take something away from today it's look we really - this is a stage one study - but Havieron is ahead of us - there's a magnificent opportunity tier one asset, tier one location, tier one partner and we're delivering it at a very low capex - beautifully set up for a mid-cap, 12 months of runway that the existing debt facility provides and this high margin development with this second lowest cost gold producer on the planet and then we tie that all together with the forward looking opportunity to continue to invest in the drill bit - get another 90,000 meters of growth drilling and unlock the full potential in that bulk size scale of Havieron - so yeah it's a tremendous opportunity and you know the team here does a great job and we're enjoying walking this forward.
Shaun, thank you very much indeed once again for your time and uh for updating investors this morning - could I please ask investors not to close this session as I will now automatically redirect you for the opportunity to provide your feedback in order the management team can really better understand your views and expectations - this only takes a few moments to complete but I’m sure will be greatly valued by the company.
On behalf of the management team of Greatland Gold we'd like to thank you very much for attending today's presentation, that now concludes today's session so good morning to you all.