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So.. I spent yesterday afternoon unpacking the assumptions made by Hannam & Partners in their most recent update. I wanted to work out what size of mineral resource estimate they're estimating as I noticed they purposely keep the total figure under a couple of layers of calculations. I'm quite surprised to discover that Hannam are already estimating the following, (I've had somebody check my figures before I posted here, but would welcome more proof-checking):
Deposit size: 511,150,000 tonnes
Total ounces: 21.1 million ozs gold, 9,339,000 tonnes copper
S.E. Crescent High Grade Zone, from 400m to 1,600m:
37,150,000 tonnes
3.8 g/t Au
0.6% Cu
4.5m ozs gold
2,229,000 tonnes copper
Gold Recovery: 90%
Copper Recovery: 85%
Breccia:
474,000,000 tonnes
1.1 g/t Au
0.2% Cu
16.6m ozs gold
7,110 000 tonnes copper
Gold Recovery: 85%
Copper Recovery: 83%
Greatland’s 30% share = 6.33 million ozs gold, 2,801,700 tonnes copper
Hannam values GGP’s 30% share of Haverion @ $1,363,000,000
This works out at $215 per ounce gold.
GGP’s current share price of 22p = an enterprise value of £836m ($1.164 billion)
GGP’s current EV/oz (assuming 6.33m ozs): $184 per ounce gold.
*Note N.W. Crescent high grade zone excluded from estimate due to insufficient drilling to date, pending further drilling.
I'm amazed that nobody has noticed this. I'd meant to check the calculations in the update as soon as it came out but got sidetracked.
I'd welcome any and all to read the Hannam update and double check my calculations. But it's fairly straightforward maths - they even give a DCF with yearly tonnage and grade estimate for both the HGZ and the Breccia.
This raises a number of interesting questions and possibilities.
Pete .. that's one for Bamps to check !
pete - can you post a link to or a version of Hannam's updated note?
ATB
Yep, it's here, but you require to register:
https://www.hannam.partners/insights/research/research-articles/adding-a-block-cave-to-our-valuation-scenario-increases-target-price-to-301-gbp/
Would my reading of that be that we are fair value then right now allow for a small bit of risk
That should mean 93p then.
:)
My reading of it is that Greatland are potentially massively undervalued in a buy-out per ounce scenario; or if they go into production it's a very long road to big money.
Another take-away is how huge of a statement it is for the broker to be quietly saying in their estimate that Havieron is the largest gold/copper discovery in decades. It's one thing for us to say it, I've been saying for a while I think 15m+ ozs (and 20m+ quite possible/likely). But our words don't carry any weight in the market. This is Roger Bell saying 21 million ounces - 'one of the foremost mineral research analysts in London'.
Could you remind me please, did Hannam come up with a target SP in that note?
Hannams getting close to my calculations but they either haven't taken out the Dyke or added the sulphides volume twice
My calcs
Calculations with the Eastern Breccias
and also 1200m but not the northern extension
I think I've been very careful/conservative with my assumptions:-
"I've gridded the plan and fairly accurately I believe the area = 176,000 sq m after deduction for the dyke.
I've split the depth into 2 sections
900m deep for the 650x375 section
300m deep for the 800x500 section
2.75 breccias specific gravity
0.75g/t average breccias grade
Top 900m
900x 176,000 x 2.75x 0.75 divided 31.1=10.665m oz
Bottom 300m
300x 314,255 x 2.75 x 0.75 = 6.25m oz
Total = 16.9m oz
I've worked out the gold recovery rate is about 89% average of the breccias and sulphides
Therefore the quantities are around 15.3m oz.
The 2.75 is conservatively on the low side
the 0.75g/t may increase.
It's all about the average grade but from what I'm seeing 1g/t or less is realistic "
From these calculations I've not taken into account for the High grade zone allowing this to compensate for any waste rock.
I've used 0.75g/t to allow for the shell cut off levels.
Conclusion
@0.75g/t = 15.3m oz (most likely)
@1g/t = 23.5m oz
plus 11m gold equivalent ounces
plus any cobalt gold equivalent maybe 3m oz
They've doubled the vertical extent of the suplhides zone in their assumptions, it says so on page 4 of the update.
The estimate clearly states 9 million tons of copper, they (or I) haven't 'left out the copper'. Add it to the 21.1 million ounces of gold.
The point being, it's a MASSIVE estimate. Which nobody has picked up on until now.
I've been saying for months (since before xmas) that Hav is likely 15m ozs+. And express that I'd not be at all surprised to see it grow beyond 20m ozs. What I'm pointing out here, for the hard of thinking, is that it's one thing for me, Bamps, you or others on a BB to make estimates of ozs. It's another thing for the analysts to put their name to such a massive estimate in a broker update. No offence to Bamps or anyone else, but our words don't carry much weight.
I'd meant to go through the H&P note as soon as it was released but instead got sidetracked with other investments and life. I've literally yesterday only gone through their assumptions. I'm pretty surprised nobody else appears to have joined the dots.
So.. what exactly is your point?
This estimate is just for Havieron? Does not include Juri and Scallywag? It seems Scally wag is very similar to Havieron.
Also, it isn't 'ramptastic' to point out the simple mathematic calculation behind the black and white figures used in the broker note. It's actually the opposite of ramping, it's just pointing out the logic used by H&P.
Ramptastic would be to say we're going to 60p based on no logic.
Answering my own question, they came up with 30.1p.
https://www.proactiveinvestors.co.uk/companies/news/942439/hannam--partners-raises-price-target-for-greatland-gold-to-301p-942439.html
At the end of the day, attaching value to Juri, Scally is pointless until the drillbit finds decent mineralisation and GGP is a gold explorer.... Lots of pointers and disappointments no doubt. All we have is Hav until proved otherwise.... ATB.
Good research Pete . Much appreciated and it isn't finished yet as you say, still more drilling to do !
Its a bit of a stretch to say they're 'underestimating' when they're already officially estimating 21.1 million ounces in the public domain!!
The resource will grow, we both know that. 65,000m of growth drilling this year, more next year no doubt, and beyond.
Again, my point if I'm not making myself clear enough is that at this stage in the game, early exploration in the big picture, H&P are already publicly estimating 21.1 million ounces. And that hadn't been really been picked up by anyone here or on telegram and talked about. Berenberg talking about 12m ozs was hard enough for some to get their heads around valuation-wise.
Go Team HYDRO :-)))))
Petejh - Apologies if I have the wrong end of the stick here, but I cannot find the latest Hannam note you refer to. However, their Note from 26th Feb 2021 shows exactly the same calcs as yours???
This results in their (latest?) estimate of 30p for the SP. It is relatively 'old news' now.
Your $1.3Bn (hannam) estimate for the 30% owned slice of Hav is shown in the 26/2/21 note.
Is this your "latest reference"?
Z
Thanks Pete - it makes a refreshing change to be able to thank the research done from someone other than Paddy, Bamps, Magic, Hydro etc - well done and thanks it’s put another big smile on top of my already huge grin!!! I am grateful to all researchers and selfless posters on this Board it’s what makes this Board so special and why the neg-heads and disrupters are so easy to spot. Come on Greatland!!!
AISC for cadia (latest) is minus $6/oz. First time in their calcs it has become a minus. I can't see that happening @ Hav.....unless PoG/C rockets.
I would expect an AISC@Hav: $600-800/oz.
Z
Glad to see you’ve come around, Pete.
Go on - give us all the in ground buy out value (Regis) based on these calculations ;)