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It’s in nobody’s interests to hold out for deals that don’t float. Mr. Day has been plain publicly on his intent, at one time offering more than independent valuation for 5% Hav, and the plan to bring it into FCF was to use Telfer. And Newmont want rid.
A deal will likely be done with somebody or somebodies including Ggp encompassing Telfer and Hav.
They start again at the table.
I remain unsure of the requirement around ROLR on other than a cash offer. I do not think, on what I have read, that Ggp’s access to Telfer is guaranteed by the Newcrest JV. Or that tolling fees are agreed. Just the context within which it was intended to negotiate them.
Plainly any partnership arrangement will see all ore going to Telfer.
If we build our own plant we still need Telfer for about 5 years, we need to get into production ASAP. Question: How do we size the new plant, its easy just for Havieron, but what if we find new deposits in the location at a later date. If we oversize the new plant for potential new deposits and we don't find them then plant running costs will be too much and eat into profits. For me Telfer has everything we need and extra. NEM will know this scenario and will not be blackmailed for sure, they will put Telfer under care and maintenance and GGP will be out in the cold worth 50 usd/oz in the ground. No way José. DM
A couple of town halls ago, Shaun did say something like “… building our own plant at Havieron would be a similar cost to trucking to Telfer …”
Culpepper,
Are you a fan of Father Ted by any chance?
Culpepper,
I do find it somewhat difficult to follow your postings simply because you never say exactly to whom you are responding to?
Why not try and use the more conventional approach now and again, ie @ Fred Boggs followed by your response, makes life so much easier Eh?
Hi MH01,I’m not trying to say building a stand alone processing plant is necessarily a better option to Telfer I am just saying from a negotiation situation it shows there are alternatives. I’d rather GGP had options than be held to ransom with no options.
I can’t know for sure what Newmont’s options are but I think they would rather GGP bought and used Telfer than build their own processing plant and Telfer be left high and dry for them to deal with. So it kind of balances the negotiating position, it possibly even helps puts GGP in a stronger position than Newmont.
I imagine they could have put that to Ggp and had done with it. Perhaps they have.
Cash for NEM share holders will not be coming from Telfer/Havieron but from the 6 tier 2 producing projects some produce > 400,000 oz per year, that's where their 2 billion usd in saving is coming from. We are tiddlers in the scheme of things. As i mentioned on GGP share chat i prefer a deal of royalties maybe 2% x smelter. Can you imagine the monies made over time for NEM especially if we find other deposits to take production over 50 years, will be worth hundreds of millions to NEM, maybe billions. DM
It occurs to me I don’t know what legalities exist around ROLR, ie what sort of deal, cash or otherwise, a mixture, whatever, Newmont could try holding out for.
It’ll all be aired during discussions, with the possibility of side deals and assurances to secure mutual advantages, on the state of play as it exists now.
I continue to think Newmont will prefer cash on the nail, to satisfy promulgated promises to their own shareholders.
Not the most rational for sure, importantly not the most economic either. It’ll smash down a NPV calculation for Havieron.
I think talk of the “option” to build a separate processing plant to Telfer is helpful from a negotiating point of view. Whilst processing at Telfer is probably preferably, it’s always best to have possible alternatives when negotiating. It might not be the most rational alternative but at least it doesn’t tie GGP to being forced to “have” to buy Telfer.
GLA
Looking at least 3 years to build new plant from getting permission, then design and engineering, then purchasing and construction and after pre-commissioning and commissioning and start-up and testing. This is a minimum for a new plant. To buy a second hand plant and install will take 2 years as it will have to be revamped and the above does not include utilities, water, power, gas etc and if we can not tie in into Telfer utilities then forget it. DM
I agree. I imagine it be very costly to build given the environment. Also it’ll have to be permitted, how long will that take. And how long will the build that take. Could add years to first ore. Best avoided.
You see some on here been talking of a new processing facility. I don’t see that as helpful just now.
It is, of course. But you have to get yer basic ducks in a row before moving on to performance. I have little doubt it will be done.
The owner of Telfer owns 70% of Hav so makes sense the ore is being processed at Telfer. Surely it part of the economic equation for both sites.
Hedging a proportion of production, as with original bank debt facility.
It would, I think, be a difficult balancing act to mine Telfer at a profit, without further capex, and dependent upon the price at which Ggp may be required to hedge it’s gold output from the mines, and in accordance with any lender requirement.
The JV, what we know of it, refers to intention to process at Telfer, and intention to negotiate tolling fees. As I see it, Ggp’s main priority must be to secure ongoing access at least to the facilities. I think that remains pretty much a certainty in the end. Without it, there will be no near-term benefit from Havieron for anybody at all.
Just considering the basics of Ggp continuing with its original solid plan as with Newcrest, is all, with which people were generally content before Newmont turned up.
Https://groundcover.grdc.com.au/innovation/precision-agriculture-and-machinery/pros-and-cons-of-deep-ripping-on-an-angle
This is similar to how they will remediate the tailings dams, waste rock mounds and the leach pads tops. Top soil if any will be used on the embankments
Hi Spades and Jerry
I still think buying Telfer is a huge leap forward for Ggp .
Telfer needs careful handling on the last years of its life, by that I mean it will benefit a smaller entity to get more out of it.
Big conglomerates are only interested in big number crunching.
Ggp should a meaningful contribution to Telfer.
There are still some inferred and indicated resources that may be converted to the next category not a great but some more may be able to convert to reserves. Newcrest’s published Reserves report shows the conversion from 29mt resources to 2mt reserves that’s a huge drop, so a chance to recover some of these possibly for a smaller leaner company.
Newcrest have exploring around Telfer for many years so I’m assuming they’ve accounted for everything. The price of strong gold may bring other targets in play.
The only place I’ve seen a potential anomaly is under the camp and airport from a 2002 report.
There are other anomalies further away from the mine that Newcrest have not found anything substantial, now whether a smaller entity would have a different view I wouldn’t like to comment.
There are a lot of rumours and ifs involved.
The EPA submission that I posted should give people a better feel for the rehabilitation procedures / costs. Most of this work has been an ongoing process and there are many photos on that link to prove it, so I don’t believe there will be high costs.
The benefits of Telfer to Havieron are many but the mine side is diminishing rapidly and talk of high production ounces in the foreseeable future looks overdone.
A negative value is probably about right and the -$240m value of Grant Samuel would reflect decommissioning the plant.
If we think Telfer could be worth billions over the next decade for GGP even with the decommissioning costs then why will it not be worth anything at all to Newmont? The project just doesn’t quite fit in with their strategy going forward they aren’t saying there is no profit to be made.
Newmont could sell 51% of Hav and Telfer for the price of taking on the decommissioning costs at the end of the project. Then they get 49% of the profit and don’t have to waste their time on running the project.
So Bamps, in reality, with an ever decreasing ounce of gold production, a higher AISC than the POG, not to mention a rehabilitation costs that as of yet is unknown, can you tell us why Telfer is worth more than the $1 Shaun said he would pay for Telfer as a going concern.
If it wasn’t for Havieron & possibly a few satellites that may or may not be discovered over the next 5-10 years, Telfer was to be confined to the history books.
In my mind, I just don’t get where some think Telfer is worth anything at all.
They’ve spent an absolute fortune on it over the last couple of years just to keep it going until the ore from Havieron starts to come through.
If my memory serves me well, I think somewhere to the tune of $240 million was allocated just to keep the lights on at Telfer.
Now with that 2 year extension almost exhausted, and with no date currently forecast for the delivery of ore from Havieron, is it any wonder Newmont have decided enough is enough !
SD as always stated he’d love to buy the farm back, but at what cost’s, nobody knows ?
There’s still a helluva lot of work to be done and money spent, before reaching the top of the orebody, never mind processing the ore that’s to be extracted.
Do you think Telfer can still be profitable as a gold mine, or are you thinking it’s only worth, is in that of processing ore from other deposits such as Havieron and any other future discoveries, in other words, just a processing plant !
I’m of the opinion of the latter, just a processing plant, and as such, should only be worth scrap value for Telfer.
I’ve heard the arguments about how expensive a 20 million tonne per annum processing plant would cost, but how much would it really cost to dismantle one the size of Telfer’s, transport it to another location, and re-assemble it again ? Probably more than to construct a purpose built new one on site.
The only thing Telfer has going for it is the infrastructure that it provides, runway, accommodation and services such as water gas & lecky. It’s a bit like shoving asylum seekers into a disused Butlins camp at Pwllheli, that was to be Bulldozed to the ground until at the 11th hour something pops up to keep it alive a wee bit longer.
I just hope Shaun and the gang have everything in hand to deliver us everything they’ve said they would. Now is the time to see if their talking the talk, can actually walk the walk !
Let’s blumming hope so, or there’ll be some very peeved LTH’s including me.
When you look at Newmont quarterly results they are forecasting AISC$2,470 with a $35m of sustaining capital.
Newcrest results from last June are indicating a conversion factor of 6 or 7% from 29mt down to 2mt for the underground this is quoted as 2.1g/t.
There’s been 6 months of production since then to Dec23 2 quarters
84,000 oz or 4.3mt in Sep quarter
43,000 oz or 2.3 mt in Dec quarter
These 2 are a mixture with a grade of 0.61 g/t.
Newcrest were expecting depletion by early FY25 so that’s Jun24- Sep24 but they stopped production due to the dam, so will be later.
There’s no development costs forecast in Newmont results suggesting funding for another cutback is not there.
From these figures I can’t see where 250,000oz will be achieved and may or may not last into the New Year.
That’s only my opinion from published resources I’ve no idea if they have found more.
Bamps there is no way that the aisc will be $2500 of any currency. If it was in a past period then that was an anomaly. If Ggp get Telfer, expect them to mine selectively the much higher grades with lower corresponding aisc and higher profits.
The past under Newcrest will bear no relation to the future under any new ownership. Different philosophy and different mine plan.
That’s why I am guessing 250,000 ozs not 350,000 ozs but a much lower aisc helped by some significant cost savings from Jimmy the toecutter……