We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Apologies, I should have said that I also believe that a full buy-out of GGP by NCM is unlikely, keep the relationship good and let each party work on their sweet spots (not a euphamism). NCM to buy our remaining 25% at FMV (if GH agrees it's fair). Regards and ATB
RA
@Tig "TMT - you have just given a clear exposition as to why NCM should buy out 100% of Havieron ( for around $$$1 Billion ) and get on with saving Telfer., which is what they do best. "
I'm not sure I agree. A joint venture with GGP that sends the ore to Telfer for toll processing saves Telfer mine as surely as a buyout does. As long as the ore goes to Telfer, Telfer mine is productive. As long as the ore goes to Telfer, a processing plant doesn't have to be built at Hav. The symbiosis is there whether NCM owns 100% or 90% or 75% of Hav.
There are reasons for NCM to buy the rest of Hav, but saving Telfer isn't one of them. They saved Telfer when they agreed the JV, IMO.
Tiggerman - I think that NCM already have first call on the Havieron tenement under the current JV for the period of the Farm-In.
"Additionally, during the farm-in period, Newcrest will have a first right of refusal over the remainder of Greatland’s Paterson project (Black Hills, Paterson Range East and remaining areas of Havieron licence)". By my reading, the farm in finishes at the end of stage 4 which has to be completed within 24 months of stage 3 (current phase) completing. Stage three is up to 24 months from March when stage 2 completed. NCM look as though they will completed stage 3 well within the 24 months.
Looks like the NCM/GGP relationship has a ways to go, it is in both parties' interest to ensure that the relationship remains a good one.
tigger - my thoughts exactly
TMT - you have just given a clear exposition as to why NCM should buy out 100% of Havieron ( for around $$$1 Billion ) and get on with saving Telfer., which is what they do best. The prospect is rich in CU as well as AU. AISC will plummet. If NCM have any sense, they will include a clause in any deal for some first calls on Scally . Then GH and CB can get on with the job they know best -EXPLORATION - because that keeps GGP as a hugely successful company, now with oodles of cash in the bank from the sale, ( even after they have dished out a decent divi to we loyal shareholders, ) with an even higher SP than todays , ;
Straight into some really hot results at Scally and similarly or a sale from other prospects, and we are then still remaining as happily smug LTH's all bickering about the next spectacular levels of the SP , and whether we sell os move on.
Its a no brainer.
Tig
@WF re toll processing
I'll give you my expectations and I don't know either.
My guess is that the JV agreement specifies toll processing charges, so a formula has already been agreed, $X / ton of ore from Hav. Maybe it is $Y and NCM gets the copper, maybe $X and the copper belongs to the JV, but it's already been agreed, anyway.
There are fixed and variable costs to running any plant. Security costs are fixed. Some maintenance has to be done whether you are processing a lot or a little. That's fixed cost. Some maintenance has to be done more when you process a lot. That's variable cost. Power cost might be variable, but lighting cost might be fixed. And so on. If there's any land rental payments, that's fixed. Any payments to the Martu people might be fixed. Depreciation of the plant / equipment is fixed.
NCM will have worked out what they will charge the JV for toll processing. It will cover variable costs and a proportion (probably a fairly large proportion) of the fixed costs for the Telfer processing plant.
That means most or all of the fixed costs will no longer be attributable to processing Telfer ore, and that means the cost of processing Telfer ore will be much lower. As a result, Telfer becomes much more economical to mine, especially as POG increases. So that means the lifespan of the Telfer mine increases.
Currently the AISC for Telfer is over $1200/oz. That's been pushing the limits of economic feasibility. One broker, I forget which one, said the Hav deal would turn Telfer into a Tier 2 resource again. NCM defines Tier 2 as having AISC between $8-900. So they are expecting a $400 / oz decrease in AISC for the Telfer mine as a result of the toll processing agreement. I don't know if they are saying that based on facts and sound analysis or if they pulled a number out of their backside. But certainly, Hav appears to make all the difference for NCM at Telfer.
There truly is a symbiosis here. Telfer's processing makes Hav much more valuable. Hav makes Telfer's processing plant AND Telfer's mine much more valuable. Another reason to consider buying both companies, FWIW.
This same symbiosis will exist if GGP finds significant gold at Scal or Rudall. Even if GGP were decide to become a miner in such a case, rather than doing another JV, they could still arrange toll processing at Telfer, to the immense benefit of both companies.
Thanks, Paddy.
I am interested in the basics of 'Toll processing' as, intuitively, can produce interesting results.
I have no actual knowledge, so this is simply my conjecture!
I assume that the toll process charge is made up from the total costs, both fixed and variable, of all the processing plant over the year (plus a profit/ buffer margin?) divided by the annual throughput.
Now, if this a charge per ton of ore, then it would be weighted towards the higher ore throughput, i.e. more cost to Telfer than Hav. Probably little change to an AISC metric for telfer vs their current.
If this is a charge per oz of output, then the weighting will be different. Less to Telfer, more to Hav (assuming the much higher grades that SB mentions). This would have an interesting effect, as it will reduce the AISC for Telfer and may therefore help extend Telfer's life.
It's a subtle difference, but may also reveal a further hidden benefit for NCM which does help cement a more harmonious JV!
Just my thoughts. of course.
I'm pretty sure that they will be running a blended ore of both ours and Telfer through the plant especially as it will be getting more & more economical to keep mining Telfer with the rising gold price.
They will have procedures in place to monitor the grade coming from Havieron and it will be toll treated and valued accordingly. I think there are systems like this in operation in quite a few processing plants around the world.
GLA Paddy
TMT, that all depends on how the fixed costs are allocated!
True if on ore throughput, but if on gold/copper production, then it will be more heavily weighed to Hav's ore. Bear in mind here that the normal industry standard AISC metric is a gold oz measurement.
@Hopefully
I hope you are wrong and they keep mining Telfer as well. The toll processing of Hav ore at Telfer should keep the Telfer mine economically viable for a while. Fixed costs of toll processing will now be shared between Telfer and Hav.
I don't think they'll have trouble staffing both mines when the time comes. They are just now hiring an Early Works Manager for Hav, way too early to be hiring a full team.
I'm glad you are enjoying that med sunshine Hopefullygold! I was reading some of the worker reviews on the first link you gave. Quite a mixed bag from the current and ex-employees. Of those complaining, generally it was about a rather inflexible management and the heat. I haven't read other reviews for other companies but you get the feeling that these guys all look like Robert Mitchum and, if they weren't operating mining equipment they'd be shearing sheep. So maybe it is par for the course.
Anyway, on a separate sub text, I was thinking how anyone who accidentally refers to GGP as a mining company gets slapped on the wrist here but it's even better than that isn't it?
When Havieron is up and running GGP will get 25/30% of the profits. They don't have to drive any trucks or shear any sheep. Gervais and Callum can put their feet up, drink beer and watch cricket on TV and watch the bank balance grow, if they want to.
I'm sure I've inserted enough type-cast stuff here to get at least one response from an Oz member "Call that a post!"
Good evening all it is 30 degrees C in Spain.
As you know I have no mining experience whatsoever and tend to look at the easy low lying fruits that may add to the Greatland evolution story, flights into Telfer etc and confirm my own personal conviction I've made a good investment. It is my opinion that Newcrest have not done a extensive recruitment campaign to work both mines in parallel. My hypothesis is that the grades at Havieron are so good that they will stop mining at Telfer and solely source our baby. I'm sure chartbuster reddirt are far better and able to comment. Bring on Scallywag and co before I'm in embalming fluid.
https://www.seek.com.au/job/50209748?type=standout#searchRequestToken=0b7deecf-7ba9-4ead-bb8e-03ea226894ed
http://www.themininghub.com/en/