Town Hall - 24th September 2024

[DipSard]

Rough notes while travelling back!!!

Deal
- Agreed in March but tailings issues meant keeping it under wraps
- Based around POG in March but NEM happy to keep it based there and good partners throughout showing care for 500 employees and 1000 contractors involved, all of which will be transferred to GGP
- LROR (Last Right of Refusal on Newmont's 70% stake in Havieron) was used to be obtuse in comms to general market so potential bidders unsure if GGP bidding for both assets or not as Telfer not worth it alone on the facts as known then in terms of mine life etc.
- LROR was not used as events unfolded, the LROR was also useful from a majority partners perspective in other scenario's so was a double edged blade of sorts in reality (Note: these kinds of terms of First and Right Refusals are common in joint ventures of all sorts, not just mining from my own research and general experience)
- Tailings dam issues caused delays in announcing deal earlier in March by Shaun (Note: as can be seen has had other benefits such as Telfer stockpile and unrelated repairs and maintenance conducted at Telfer due to opportunity given with processing shut down for so many months)
- Wyloo being keen and strong funding partners for deal was also promoted to general market to dissuade bids hopefully
- Reminder that this was a team effort with most at GGP working their weekends and very long days
- Deal is planned to hopefully complete for Nov 1st but no guarantee (Note: there are a list of conditions to be met as detailed in AIM Admission document, some can be waived but the doc doesn't specify which ones and of course some may be required by 3rd parties such as Wyloo or the banking syndicate)

Placing
- Largest mining transaction on AIM since 2017
- In hindsight could perhaps have discounted less due to success but was an extreme risk if raising funds to acquire the assets had failed
- The way things are structured in UK around access to placings and structures around maximum limits etc. such as through legacy EU regulations also limited how much retail investors could be involved (£8m) but preference was given to existing holders where possible

Early cashflow from Telfer
- Telfer provides this but the story overall is still about Havieron and quick payback expected in 12-18 months overall for capital outlay in closing the deal
- NSR (Northern Star Resources) playbook being utilised but Havieron is better than any starter assets they had
- Confident of becoming a 10moz plus company with both assets in near-term
- Telfer AISC at 1450 dollars but without any optimisations accounted for
- NSR playbook is about increasing productivity such as removing bottlenecks and using a more tailored and less template driven approach vs a major adopting the same business model across many assets in a larger portfolio
- 30mt Telfer stockpile gives at least 18 months operational buffer if any future issues and lowers AISC, a tremendous benefit
- Mill in excellent condition overall from 2005 rehabilitation and been well looked after previously as was a favoured asset back then and plenty of improvements of late while tailings repairs being conducted which allowed repairs as detailed above already to be completed that ordinarily can't be actioned when mill operating fully
- Telfer Mine life extension will be achieved with reserves update in June 2025 to ensure no gap in productivity before Havieron is brought into production and resources update in Q1
- Newmont mining plans based on just 1600 POG vs the current much higher levels for POG which give even higher profit margins
- Up to 70mt perhaps still remaining at Telfer as estimated now, but not all to be included in mine plan
- Telfer lower stock works are around 1.8 to 2 grams via selective stoping so less attractive than higher grade available from west dome deeps, but less transport costs as near shaft and approximate 10mt correlates to about 10 years mine life and is more an incremental feed to target at higher POG's
- West dome deeps gave some great hits 10 years ago, best grades seen in 20 years at Telfer and Newmont increased budget to explore as owners as Newcrest formerly hadn't focused on exploration here, lots of potential abundant in this area, they're still drilling despite the agreed sale, so again showing a great partnership approach 
- Much bigger resource updated in March 2025 to be announced and then a portion as Reserve update in June to extend mine life and future plans will be shared to calibrate around future POG at those times
- TSF 8 had issues for 18 months which were raised by engineers during periodical checks but Newcrest management ignored these
- Newmont came in and voluntarily shut it down and spent approx 30m to repair, this cost Includes stockpiles 
- TSF 8 is a new facility and still in lift 1 of 14 planned lifts in it's lifecycle
- Telfer mine's rehabilitation costs made a sole purchase very unattractive for bidders but Havieron keeps the infrastructure busy to at least 2048 on current mining plans and rehab costs at Telfer equate to around 3-4m in progressive rehab annually

Hedging
- Fixed Forwards are an agreed fixed price per Oz
- Shaun planning on buying Puts so GGP have a right to sell at agreed prices BUT not an obligation 
- This cuts down risk and helps appease institutions who just invested 
- In future GGP will likely do a mix of Forwards and Puts
- Puts were not mandated by banks, but if not put in place by Shaun, they might have insisted anyhow 

Havieron
- Focus is on gold and copper but there are some base metals at greater abundance than the copper 
- Gold and copper focus is key still, need to unpack if processing base metals such as nickel is worthwhile so not a particular focus currently with team
- Teller extension now allows Havieron to be developed as a major would do so Vs rushing to fill mill
- Newcrest kept changing minds about evaporation pond designs but they should have stuck to recommendations from regulatory advice, as usually considered best practice to follow these than trying to go against them
- Not in hurry to rush decline as ventilation shafts are more critical for now whilst decline is really of secondary order, plan to restart around mid 2025 but too early to say and all part of DFS 

- DFS has a strong focus on looking at cost structure and assessing the size of the ore body further
- Optimisations focusing on increased mining rates but he wouldn't pre-bake that
- 500m already spent on development of the mine, so reminds us it was a good deal!
- Seemed to suggest conveyor VS hoist being planned in optimisation studies as the optimal window for hoist seems to have passed now
- Current POG makes some areas more attractive than previously when PFS was published

- Newmont had 3 votes in JV so could control matters such as decline progress vs GGP's 2 votes in JV committee (also the case with Newcrest)

Share price
--Why is the market perception so low on the potential of the deal currently?
- Expects market takes notice of GGP now controlling destiny, the deal being accretive, serious investors might want to see production numbers from the first quarter of production
-The Deal now gives a better platform to rerate from and intrinsic value is now better than it has ever been for GGP

Antipa etc. for additional sources of ore in future 
- Open for business BUT no rush as plenty of prime exploration ground in own portfolio
- GGP now owners of the only processing facilities in Paterson region at Telfer
- No production gap envisaged from having ore to feed the mill from Havieron and Telfer

ASX Listing
- Within 6 months (Note: perhaps based around Resource update and first quarter production/revenue numbers at Telfer?)
- again he talked about Top Hat structure under an Oz listed company leading to optimised costs and effort around just meeting Oz set of legal requirements while still remaining listed on AIM for the benefits that also brings
- About moving to FTSE potentially, said AIM still useful so unless FTSE offers indexation it would be unlikely (i.e mandated buys from funds etc.)
- ASX provides FTSE type benefits to attract institutions such as those above such as mandated investments from funds etc.
- Definitely considering consolidation along lines of 10 to 1 etc. type scales vs say 3 to 1 (all used as loose examples for now)
- No raise planned but might be an opportunity for Newmont to sell shares if GGP wanted for example, (Note: reminder for readers is that Wyloo have first call options on Newmont's shareholding as per AIM Admission doc)

BOD, will they stick around?
- Here to stay for now, can't guarantee a decade but next couple of years etc. is certainly on the cards 

NEWCREST
- Didn't love asset, no WiFi in camp which is rare nowadays!
- Shaun had agreed in principle with Sandeep to buy assets but he then left the company and Newmont came in with their bid
- Feels much better outcome than if dealing with Newcrest who would have had a less helpful approach with tailings repairs plus been a more more aggressive seller as the assets were for them a larger part of overall portfolio 
- Shaun found them predatory in summary
- He brought in the BOD and Wyloo to display financial strength and capability on more equal terms
- GGP had drawn 7m of the 50m loan approximately
- Won option exercise as their submission was terrible given that the conditions imposed for Option Exercise were specifically written in for their benefit
- They retaliated by tactics such as charging interest on loan
- PFS was dropped on GGP without notes or warning
- Was a challenging relationship overall
- JVA was worst he ever saw and he had a legal review conducted when starting role and it definitely wasn't considered a good JVA.

Link to earlier streamed Webinar
https://streamyard.com/watch/XG8BPnSu4d8d

[Redirons]

Very many thanks yet again Dip - your selflessness is exceptional and much appreciated. Best regards.