What’s next? - GGP instant cash and 700koz-900koz producer

[Hydrogen]

Ok it’s taken a bit of time to spin through the admission documents and I still have to read it in detail

This is my take on what’s next at GGP …. I said in my last post that whatever Shaun Day said next was key. The admission document talks to a 2.8mt 'base case' scenario. But I think thats going to be totally superseded, and possibly within weeks.

THe admission document makes it pretty obvious GGP will produce 300-400koz in 2024/25 from Telfer ( as detailed ) . Basically GGP is a significant “instant” producer - In fact a Top 5 gold producer in Australia (as of today). Most probably even in the GDX at next rebalance. Day I think has blown the doors off… anticipating a delay to first gold at Havieron - yes, the placing price was shite for LTH but it doesn’t really matter now as we will rerate as a producer. We have a new plant, fully refurbed at Telfer. A circa $200m ore stockpile, and a fully operational mine knocking out some 350koz to 400koz a year, in a rocketing gold price environment, with very low ASIC (at least for the first year togive Day time to get a handle on Telfer fixed costs). Day has actually played a blinder here. $200+ Million in revenue are just sat in stock piles on the Rom pad ready to put through a restarted mill… GGP has just brought forward first gold by 2 years given the delays at Havieron …

But there’s more - confirmed in this paragraph: in the admission doc: Part 3, 2.4 - page 61 2.4

“Optimisation opportunities The Company considers there to be significant opportunities to optimise the development of Havieron following Acquisition Completion. A key opportunity to be assessed by the Company is expansion of the Havieron mining rate by utilising a bulk ore handling solution. The Greatland Base Case is for a 2.8Mtpa mining throughput from Havieron, which is constrained by the planned single decline. With the existing Telfer infrastructure already in place and approximately 50% surplus processing capacity in the proposed single processing train, a materially increased Havieron mining rate has the potential to be highly value accretive. The Greatland Feasibility Study for Havieron is targeted to be completed by the Company within 12 months after Acquisition Completion, and will incorporate optimisation opportunities to the extent these are identified and validated.”

THAT tells me, no CONFIRMS they are 100% adding a HAUL SHAFT or a CONVEYOR decline to an all new DFS (I always said 6mt DFS would come and this is proof) which will increase mine output to 6/7/8MT but also totally transform the economics of Havieron. eg 8 MT at 3g/t is 655-700koz of gold Plus whatever we can keep pulling out of Telfer which could continue for 5-10 years: GGP could be a 900koz producer by 2028

So, When that DFS finally lands (and this is the reason it’s been delayed)….. it will shock the market, I think. It’s all there in the admission document… You have your chance today to get in

Make no mistake - and I always believed he would do this... but IMO 6-7Mt SLOS is the reason the DFS wasn’t published.

[ManFromUruguay]

Appreciate the overview H.
How much might that cost and does this mean the potential for another discounted fundraise. Because I am starting to lose the will at Shaun's inability to use decades of experience in finance to sell our world class projects to the investors without huge discounts and decimating LTH's
Dont get me wrong I am made up with the acquisition just feel really underwhelmed by the manner of the financing
It is really challenging looking at a pension fund that has had such a retrace whilst trying to stay positive about the project and ultimately WHEN can we start to see the fruits ?
Best
MFU

[wildbill99]

MFU - did you miss the bit about the Tier 1 banks providing $750m?

[ManFromUruguay]

WB hi no I didn't but neither did I miss SD not mentioning none of it would be used for this huge discounted fund raise. If the cost of this possible expansion is beyond the existing budgeted for capex requirements then it may well involve more shares.
Obviously goes without saying I hope it can be fully accommodated by the bank finance if indeed Hydro is correct
Best
MFU

[OilMonkey]

Once we are a producer - which is imminent - surely this negates or hugely reduces the need for further fund raising as we will have a cash flow from Telfer immediately.

[Hydrogen]

You make a fair point MFU -
But it wont be like this present raise situation... this is a stab at what might happen:

Take a moment to consider Centamine has just been bought for $2.5bn and it owned 50% of a Tier 1 mine

So let's Say they wanted to add a haul shaft (or a conveyor) to add this bulk handling system to Hav and it's going to cost an estimated $250m US to put in.... IMO that's potentially what an upcoming ASX IPO raise could cover off, given my HUGE expected upgrade from 3mt to 7mt.

I see the 750m as 'working capital' to fund Havieorn and make sure they can open up new bits of Telfer etc and keep the cash rolling in.

Remember, Sprott recently said Havieron ALONE has a projected NPV of $5bn Oz or $2.5bn US on 100% basis. But the story is also what the hell can they generate from Telfer above beyond the 22mt stockpile of ore sat at Telfer.

Well, cough... hello!! Anglo gold is presently valued $11bn or at 1.3 x NAV

I'm assuming the DFS will have been released prior to this ASX IPO and to undertake the upgraded DFS they will simply require an extra X. I'm also assuming the company will have been significantly re rated by then because the new DFS NAV should be huge and Telfer will be producing 300koz plus.

The cookie has crumbled.

Don't get me wrong - there's still a lot that could go wrong - but this deal for Telfer is a total 'fing steal and reflects the huge leverage contained in the ROLR. Well done Callum. That clause (combined with Havieron) has probably just created one of Australia's biggest mining companies.

A must watch: 14 mins in https://www.youtube.com/watch?v=2T1TA53yD-k&t=2135s

Of note - The Money of Mine guys are 'harsh but fair' critics: They blatantly can't believe this deal is so bloody good. Matty Micheal has well changed his tune on Hav now, and IMO, so will the rest of the market too.

For example, a mate of mine just subscribed for $8m worth of stock in Australia (and i've kept him informed about Hav for years since the 6p days first time around... ....)

[Maltster]

The ASx listing is a ,cross-listing, I believe. AIM remains the principle market, but shares cam also be bought on the ASX. Why would an asx listing require a fresh raise? Can't shares just be bought on the open market if the ausie institutions want in? Will any such raise be just more dilution?

[Hydrogen]

Yes that's correct its a cross listing : but if they needed a new shaft to create a huge growth story, and the money isn't there from Telfer - it maybe - but we have no real idea how profitable Telfer can be under Shaun Day, at this stage - but if it isn't an absolutely massive cash cow there's a good case to raise form Auzzie pension funds to triple Hav production then that's useful.

You get a smaller slice of a much bigger pie. That's the fact of the matter.

Would you rather have 100,000 shares in a $1bn company or 100,000 shares in a $5bn company? it's obvious right.

[RationalAssessor]

Not convinced that there will be a raise on ASX.
SD has a revolving credit of (I think) $750M which he can use for the development of Hav.

As for owning 100,000 shares of a $1Bn company versus a $5Bn company, It all depends on the SP which of course is derived from the number of shares in issue.

Looking forward to seeing how this plays out once the market washes through the shares at this level.

5Bn shares in a £300M MCAP company gets trumped by 13Bn shares in a £1.3Bn company......6p versus 10p? Who knows where it will go.

[FuttBucker]

Are LSE still using old mcap/issue numbers? It says circa £260m with 5b shares @5.2p

I thought we were at 10b shares @5.2p making mcap £520m.

The reason I'm asking is because before the deal the market thought GGP was worth 7p per share with 5b in issue... And all we had was rights to a hole in the ground.

Admittedly the liabilities side of the sheet has also grown but we also now own about a billion quids worth of actual mine, and have a revenue stream.

I can't see GGP being worth less than a billion as is (wild guesstimating here) before all the optimisation we're hoping for, and factoring POG . So, 10p/share right now. No?

[RationalAssessor]

FB - The new shares will not be issued until 1 October once the vote has been taken

[FuttBucker]

Ahhh, righto. Thank you!

[CK 1974]

So once the dust has settled and we start producing and creating revenue then great. But looking at northern stars mcap which is 16 billion a$ that’s 8£ billion I doubt we’ll be up there with northern star any time soon so I’m guessing we’ll be between £2-3 billion? With all the new (Ozzie mates) shares we now have, that gives us an sp of 23p
Anyone have any idea how long it will take to be as big as northern star? A long feckin time I’d say
So before all this we all had a dream that we could get to at least 50p with 30% going by the lassonde curve, that would have been great, and now that’s not gonna happen is it?
I’m pleased that we now own it all but in all honesty I’ve waited 4 years putting my trust in the new ceo to get us back to previous highs but now that’s not going to happen is it?
Can anyone tell me our mcap can equal or over take northern star’s in the next year or so….just don’t think it’s worth holding much longer if the sp is gonna be 23p in 2 years time
Not wanted to put a downer on it, I legitimately want to know other people’s thoughts on mcaps

[FuttBucker]

What drove the previous highs? Covid investment bubble and smoke and mirrors from the previous CEO.

What's driving price action now? Some solid business moves.

I don't understand the continual need to bash SD for not being able to maintain the 37p high when the other guy pumped it up then fucked off.

[CK 1974]

Ffs Read the post properly!! I haven’t bashed Shaun I just want peoples views on the mcap

[Shinybits]

Does anyone know how Greatlands is proposing to achieve the reported 3-400kOz in the 24-25 fin year from Telfer?

In 23-24 they achieved 349kOz I believe, and neither of the mills have spun in anger this financial year. I think the previous year was 426kOz but I stand to be corrected. So best case Nov to end of June being 8 months, at the upper estimate 400kOz in 8 months (optimistically assuming the plant repairs come off without a hitch) is the equivalent of 600kOz in a year… so that’s nearly double the dirt, or double the grade… both of which will involve the observation of flying pigs in the short term I would think.

Any thoughts on the rationale?

[FuttBucker]

Ffs Read the post properly!! I haven’t bashed Shaun I just want peoples views on the mcap

Eyup, none intended, sorry.

Mcap - I think 1b-ish is about where we are right now, and the rest depends on observed performance, which (top of my head, not in depth) would be mill throughput, AISC optimisation, exploration results, and deals with others about trolling.

[pv1972]

Hi there

My guesstimate would be if they keep telfer going at the same rate beyond initial 15month plan AND get hav producing its c270koz pa, then would would churn out around £600m pa gross profit.

Stick a PER on that of between 5 and 8 and you get a prospective MC of between £3b and £4.8b in 2 to 3 years.

This could be higher if gold bull run continues upwards, or they earn extra from processing other finds or they make new discoveries or buy other accretive tenements.

SP range for those MCs is between 23p and 37p.
Say they also spend half their profits on a divi....that could be 2.3p per year.....makes current SP look a bargain of you think risks warrant that.

I'm in 2 minds whether I want to buy more. I've got enough already at 4.7p avg, having 1st bought at 0.95p and then more at 3p, 6p and 12p on the way up. I then stupidly didnt sell near the top but also bought more on the way down at 23p and 17p. I guess I just dont want to increase my average anymore....

Good luck all

[pv1972]

@shinybits

GGP revealed that tel already has a 15m plan in place to mine 426koz over 15 months....I guess that's where the 300koz or so will come from.....

Best

Pv1972

[pv1972]

Sorry shinybits.... pl ignore my post, I misread yours...I agree further clarity required!