Notes from Sunday Roast Podcast - 21 Jan 2024

[DipSard]

Notes from Sunday Roast Podcast - 21 Jan 2024

Interview Link:
https://youtu.be/xMwoihirF2A?t=2869

GGP RNS’s:
https://greatlandgold.com/investors/regulatory-news/

Download Link:
https://www.mediafire.com/file/n8vgkptl ... 4.pdf/file

[47m, 50 seconds in]

* Thank you so let's move on to our second guest this week Shaun Day MD of Greatland Gold, welcome back Shaun Happy New Year hope you had a good one
- hi Phil thanks very much for having me on the Sunday Roast again and Happy New Year to yourself Phil and Kevin

* Yeah, did you have a good one Shaun what did you get up to, did you have a bit of downtime
- did get a bit of downtime which was pleasant, it's our Summer here in Australia so there's a lot of going down south where it's a few degrees cooler and around the beach

* Excellent tell us now before we go into GGP and the story that we want to talk about which is the overview of GGP, what are you thinking about the world at the minute, you heard us waxing lyrical at the start there about fish shops not having fish because of Russia and problems between Iran and Pakistan and Gaza is getting blown to pieces from Israel and we've got supposed democracy in the US and we've also got votes happening in the UK as well, what is your view?
- yeah the geopolitics is really unstable globally right now and it's an amazing year of elections, you've had Taiwan but you've got the UK you've got the USA obviously but there's just a huge number of synchronized elections in 2024 in in the world's liberal democracies and I think that creates a certain level of potential uncertainty and I think that's adding to that kind of overall sense of geopolitical risk
- and then there's a couple of Hotspots obviously… the Gaza Israel Hamas thing is off the chart, you know Russia invading Ukraine's probably worse and then you continue to have this really irresponsible approach by China who you I think… Australian divers were in the water recently and they came and sonar at them at close range which is an incredibly dangerous thing to do, so you just have all these very uncertain things
- yeah I enjoy following geopolitics.. the US election I find kind of gob smacking… albeit I still don't think Trump can motivate a majority of the electorate to be re-elected president but he does, he seems to have captured you know one quarter of that electorate
- but it's probably good for gold that level of uncertainty but it'd be nice just to get back to a normal world again wouldn’t it?

* Absolutely, I was listening to a podcast actually and this comes down to sort of social media and the fact that we're in this constantly connected state of 24/7 rolling news and one of the things that struck me was it apparently in the 2020’s in one day we hear more tragedy than we would in 25 years in the 1990s, so that's just shows you how much negative… I mean I'm not saying that things that you know that more things happening but are we living in a time when actually this is normal you know… do you know what I mean, it's like Wars have gone on and he's saying that it's actually safer to be born now than it was in the last past 75 years
- well it is hard to find a period of time where there hasn't been a war going on somewhere so I don't think the number of active conflicts are particularly different today than has been historically
- and I agree with you I think the 24-hour news coverage coupled with social media really amplifies these things and you also have the headline you know that constantly people are trying to refer to things as crisis to get headlines and clicks
- there's also I think it was in the original George Bush period there was a pretty innocuous piece of change to US regulations around media which stopped equal content laws where you had to… the news had to present both sides of an argument in about equal measures
- and that seemed like quite a sensible thing to repeal but what it did lead to is the bifurcation of the US News with a right wing let's call that Fox Media and a left wing I think it's right to call that CNN and I think that is unhealthy to have a society where people with one view tend to tune into one source of news and people with a different view tend to tend to tune into a different station for their news
- I think it was a far more healthy environment where everyone was using more common news sense and sure you might interpret it different you might emphasize things differently but I think the bifurcation of where people get their information and then the way algorithms feedback what you're already thinking I think is perhaps making some people more polarized than you used to be and that might be the difference from 25 years ago

* Yeah, I think that that that is a very good point isn't it, it's because our narrative, anything that we click is then reinforced by what we get on all social media and even when we talk about things within telegram groups you get the polarizing effect of many people either agreeing with you or disagreeing with you, know but in the main it is people agreeing with your point of view so then you get the herd mentality and you know you get extremes on both sides, so yeah it' a crazy situation and we're definitely being manipulated more than we ever have been and we don't realize it
- yeah and I'm not… I'm not necessarily sure if there's some masterful person you know manipulating things but I think the nature of algorithms, an unattended consequence is a change or manipulation to the information you receive

* Okay so now we've put the world right so which should we obviously look at the Havieron Mineral Resource Estimate update at back end of last year, talk us through what you're working towards in the next six months to year and what listeners and shareholders can look forward to please Shaun?
- yeah well thanks for mentioning the resource update that that was yeah I thought tremendous up to 8.4 million ounces and the pace of growth in this ore body has been maintained
- so as we look into the calendar year 2024 you know for me it's a, it's a year of milestones
- we’d like to get down to the top of the ore body, would like to complete the feasibility study and I think those are huge Milestones
- so in the short term we have the Ernest Giles drilling which should come out in this March quarter, really excited about that, it's taken us a number of years to get on there and we're keen to get those results back and likely do some further drilling in calendar 2024
- we then turn towards Havieron where we are presently dewatering and to my understanding that's progressing well and you I think the information I have to date is probably more positive… a little bit ahead of schedule so that's great and you.. so, once we complete that dewatering and depressurization work, we can then push that decline that last kind of 20% into the top of the ore body
- so I think those things are all really exciting for us in 2024 as we kind of you know bring the development of Havieron to its conclusion

* So with all this geopolitical situation, probably the strength of the Australian dollars pretty good as well I would imagine, how do you see the outlook for gold in itself?
- well sorry just on that the Aussie dollar is actually when it's risk off, the Aussie dollar tends to fall, the AUD dollar is actually relatively low and relatively low to its average since it was flooded back in in 1983
- so you actually have a perfect environment for an Aussie gold producer which is I think a fantastic gold price and yeah and it continues to trade above USD 2000 an ounce
- but then when you overlay that with an AUD dollar trading at less than 70 Cent you actually get a Australian dollar gold price which is outstanding because the lower the Australian do.. the Aussie dollar to the US green back the more Aussie dollars an ounce of gold translates into it
- so even though you've got US gold just sitting a bit above $2,000 an ounce, Aussie gold Australian gold is over $3,000 now… it is eye wateringly good so yeah, I think the geopolitics supports gold
- I think you increasingly see funds want some gold in their portfolio and right now with that geopolitical... the risk also on the Aussie you're seeing the Aussie dollar it's not weak you know it's within a reasonably tight range to that 70 Cent average
- but it is below the curve which just amplifies the benefit of the Aussie dollar so it looks good and I love the fact that we've got some copper in there as well so we feel the commodity mix is the right.. the right commodities at the right time

* Yeah and I mean from the point of view of gold I mean I'm a bit of a gold bull in terms of all these geopolitical problems and also I feel that the dollar is going to lose some more value this year even though it's made another effort going back up again and I can see we're going to get 2223,24, 25 US dollar price for gold and mainly on the back of the fact that many governments are stockpiling gold because their currencies are under threat
- yeah look you're absolutely right Kevin the buying by central banks around the world is a tremendous win for the gold price and there's there just doesn't seem to be the end in sight for that

* So going back to GGP as a whole you know what do you see in 2024 as both catalysts and what do you see that could cause you a headwind, obviously the elephant in the room in terms of headwind is how all of this merger situation plays itself out for you guys, so you know give us an idea of both of those things?
- well look, as one of things I did want to raise I think people some people following the media will have an interest in this you've seen at Telfer that there was an issue with their tailing facility there
- so that means that they're continuing to mine but they're actually stockpiling and not processing right now and I have had a huge number of people ask me well what does that mean for Havieron?
- well it doesn't really mean anything you we… this is a Telfer asset, it's to the account of Newmont, they're a global entity of you know great capacity and they’ve made it very clear publicly that they will that they will make sure that that's corrected to a very high standard
- and just to be clear it's just some observed cracking… that there hasn't been a spill or anything but they're an incredibly prudent and measured and thoughtful organization
- so I think that's something that people probably would be interested to hear about and I think that being resolved in you know say the next six weeks really I think will give everyone a lot of comfort
- and to be honest you know giving the facility a bit of an overview and a bit of an overhaul is probably really positive for its long term duration
- so I think you know in terms of your question on how does that all play out, well ultimately I think Newmont is going to spend some time understanding its new asset base and I think that plays out in 12, 24 months’ time whether they fall in love with it or not
- we can understand why they would, equally we can understand they're such a big organization you know they can't keep everything but I think that's probably a bit of a slow burn and I can't think of a better partner to develop Havieron with us and integrate it into the Telfer Hub
- and in parallel I think it's just us continuing to walk forward, you know development is rarely spectacular but it's almost a situation of no news is good news you know, we just continue to slowly progress things tick things off
- you know dewatering is not an exciting process but it's important, it's important to do it well and you every day every week every month that we do dewater takes us a step closer to the bottom of the ore body

* So from that from that perspective do you see that GGP will be producing gold and producing ore or producing ore and producing gold is the right order obviously… long before any decision is made about whether the main guys keep the asset?
- oh look it's hard for me to be drawn conclusively on that because in all honesty you know we don't know the minds of Newmont and we don't… we don't know what their process will be to in terms of the sequence of understanding their assets and making a long-term strategic decision about each
- but I think either outcome is good, I'd be wrapped if we get an opportunity to ‘buy back the farm’ as I might describe it
- I would understand that if they fall in love with us and we get a takeover bid I'd be disappointed personally but yeah that creates value for shareholders and potentially significant shareholders and I think having Wyloo there helps us capture fair if not full value for that
- and then in terms of timing you know that will play itself out and we respect the Newmont team to do that but I think they'll ultimately be decisive
- I think they'll ultimately make a decision one way or the other but whether that decision is made in six months or three years it's very hard to talk with any degree of certainty

* You will go into politics at some point Shaun should but I like your diplomatic answer

* Yeah, I mean it is very difficult, I accept there's no way that anyone's going to say yes well, this when it's going to happen that's when it's going to happen but just from the time scales you gave that thought it could be the next couple of years?

You know at the at the end of the day if that happens then you know GGP should be gold producing company at that stage and that would be an interesting perspective, I mean it's interesting that you should take over but I'm assuming you mean effectively they would buy Havieron as an asset because they wouldn't surely be interested in all the other stuff that you have?
- oh look I think those kind of conversations are often tax driven and what is the best interest of shareholders because if you did let's just say sell the asset you would then want to return if not all certainly the great bulk of that cash back to shareholders
- and potentially ask for it back if you have a great idea but so often those things in my experience are driven by that type of consideration so it's probably a reasonable thing for you to observe though there Kevin I probably used it in a generic sense
- it could be an asset transaction it could be a takeover but ultimately normally the targets trying to drive that to optimize the post-tax outcome for a shareholder in our case sitting in in the UK
- and I think you to give you a little bit of colour no one would be more happy than me or more excited if we get the opportunity to buy it back
- you know even though I gave you the diplomatic answer I think it's OK for me to also say you know people should be, should absolutely be understand that we have built a team to run this asset, to be a good owner of this asset, that is the opportunity that we'd be incredibly excited to have

* Yeah and I mean with a partner such as Wyloo you know these guys have got deep pockets to actually come up with the cash to be for you to actually effectively run the whole Telfer complex, would probably be wonderful for them and also for you as a company
- no that's a very fair observation I think one of the reasons we were so pleased to bring Wyloo on board and it was multifactorial
- but I think they enhanced the credibility of Greatland as a counterparty in a whole range of scenarios but including the one we've just been talking about

* Just while we're on the subject of sort of takeovers in M&A what do you make of the current M&A activity and it potentially set to accelerate because we saw some news I think it was Marathon Gold wasn't it that they were taken over by Calibre Mining and then there was also an announcement of the Ceno resources taken over by Dendee Precious Metals and do you think that there you know there's going to be a spike in that sort of M&A activity over the coming years?
- yeah I think we are going through about to go through a cycle of some consolidation
- I think there's been across the board without talking about any companies in particular… you've seen some pull back on share prices so you can see fundamental value there that perhaps you can't see at the top of the cycle
- and you know the investment bankers who come through our office the you know that that talked to us about the environment right now are certainly all giving off the impression that there's a lot of a lot of people looking, a lot of people thinking about things a lot of preliminary discussions
- so I think you are probably going through these kind of conditions are often associated with a spike in M&A activity and particularly when you have a bell weather transaction like Newmont’s successful acquisition of Newcrest, that can offer a number of additional transactions in the market
- and it yeah I think it was really well received for Newmont so that always gives Directors and Boards right through the sector a bit of a feeling of comfort that the market will reward but certainly not punish sensible acquisition opportunity

* Yeah it seems it seems for sure that this mega merger if you like is going to spark a collection of other things that will come from it and by their divesting and also just the fact that this big deals been done more can be done.

But moving away from that slightly because we've talked about GGP as a gold play but we know for sure it's not just a gold play it's a gold and copper play so tell us your thoughts on copper in general worldwide and then give us a bit of meat on the bone in terms of Greatland’s copper situation?
- I think copper is the best way to play this kind of electrification cycle which incorporates electric vehicles et.
- because really I think what you can be confident about is there will be an increasing use for electricity and the transport of that electricity be it within an electric car or across a grid or from a turbine in you know wind turbine in into the grid
- and whilst some metal that you know these kind of future metals you have to predict what the future technology will be
- yeah will it will it be lithium will it be some other metal that is that is used and you've seen I think I think someone told me that lithium is off 90% now that's clearly a very volatile sector when it can swing from great highs to great lows and I don't have an opinion
- it's one of the very light material which makes some sense for it to be in high energy battery use for mobile vehicles probably less so for stationary batteries
- but I think what is tremendous about copper is you get this you across the board exposure to that trend, there may be some smaller metals that have higher highs and lower lows but I think copper is one of just those mainstream kind of GDP exposed or correlated metals
- and I think the electrification cycle really suits it on top of that so I think it's a great way to play the electrification kind of story and I think it's a great way to do that without having to try to pick winners
- but really just being very confident that you're in in you're going to have that exposure and that's what I love about it for Greatland, if I it was to pick two commodities to have exposure to, gold and copper are probably the two I'd choose
- so we are incredibly fortunate to have that and I think also when I think of Greatland or I think of Havieron as a multi-decade asset you get the opportunity to go through the cycle
- so if you do feel well copper hasn't had the run you might have thought it's had for the last three is well that's fine because we'll have 20 years or 30 years to find the highs of that market
- and then I think is also hugely advantageous to have mine life because it allows you to have confidence that you'll have time to experience those highs

* Yeah and from a GGP point of view then where is the copper going to come from and you know what exploration situations have you still got on the on the cards for copper?
- so if you look at the portfolio of a lot of gold players in Western Australia which are centred around those Archean greenstones they don't have copper in their portfolio they're just 100% gold
- and that's not to say they're not great assets but what I love about the Paterson is you have both copper and gold found together
- so we have that competitive advantage over our Australian peer group or over our West Australian peer group is typically will have in the Patterson gold copper asset
- albeit we hope to be successful in Ernest Giles and that will likely be gold only because those Archean green stones which is the bulk of the West Australia gold sector are typically only gold assets

* And just to remind everybody in terms of half from what sort of percentage copper is available in Havieron as opposed to the gold?
- so around 20 to 25% of the value is in copper
- I give a range because depending on what gold price you use and what copper price you use you can come out within that range but typically over the last couple of years that range has been around 20 to 25% copper

* Okay so with both the copper and gold situation in Havieron itself and all the other opportunities in Ernest Giles and different other prospects that you've got going on this year and the JV that you have now as well, it's a very exciting year ahead and I'm looking forward to sending me the big chunk of gold that you're going to send me in the post either end of this year or early next year but yeah good luck!
- thanks Kevin and Phil that was a good conversation as always and really appreciate your interest in Havieron and Greatland

* Yeah well that was Shaun Day, MD of Greatland Gold, thanks very much for your time
- bye now.