Member Info for PaddyGall

@ Lenz - That's what NCM are trying to find out now, that area is what they were referring to as the "lower" grade breccia zone that Sandeep spoke about as being suitable for bulk mining. But remember in the last set of results there was an intersection in HAD042 of 124m @ 3.9g/t Au, 0.21% Cu from 734m which was 'inside' this breccia zone.
This may indicate the 'high-grade' continues outside the horse-shoe.

@Mickey - next satellite update should be on Tuesday

You are better to look at the reports in the "JORC" section on the GGP website - the documents in there show all the images whereas the RNS statements don't tend to had that detail.

https://greatlandgold.com/media/jorc/

https://greatlandgold.com/wp-content/uploads/2020/03/20200311-GGP-Announcement-Havieron-Update.pdf

You can clearly see that it shows "OPEN" on both legs of the horse-shoe.

ATB - Paddy

Hi MFU,
IMO they are referring to both legs of the "horse-shoe" - think of it as one big ore-body with the outer edges defined by the horse-shoe.
If you look at my Twitter feed you can see I think they have been preparing more drill-pads in the bottom SW corner which will extend the bottom section towards the NW also.

Cheers - Paddy

I've been reading through the Ramelius takeover and perhaps that would be a good blueprint for what may happen at Havieron - a cash payment and an NCM share for "x" amount of GGP shares - this would give people exposure to any additional resources found at Havieron or if people didn't want to stay in the game they could just sell the NCM shares.

Not sure how it would work with NCM being listed on the ASX but would this be an option??

GLA - Paddy

The other point I meant to mention was that the Penny West prospect is 150km from the Ramelius processing plant so we would have significantly less transportation costs as we are less than 50km from Telfer.

ATB - Paddy

Chester - I'm sure that comes out to $750 million but that would be a good starting point.

There was a recent take-over by Ramelius Resources in Australia of Spectrum Metals who had a high-grade resource at Penny West of 355,500 ozs of gold @ 13.8 g/t

https://smallcaps.com.au/ramelius-resources-spectrum-metals-takeover-declares-offer-unconditional/

'Ramelius is paying $208 million for Spectrum; the known contained gold at Spectrum’s Penny West project is 355,500oz. So, that $208 million is, per ounce, less than a quarter of the price of gold (with gold at $2,566/oz as Comex closed Tuesday) — although with the cost of mining it to come.'

These are Aussie $ figures but if you work it out with the Aussie $ worth 0.62 US$ then Ramelius paid over US$350 / oz.

I know it's higher grade than Havieron and it was a shallower depth but I think it puts a marker in the ground as to what our "high-grade" zone may be worth especially if SK's figures show our 'high-grade' area to be at 8.2 g/t.

ATB - Paddy

SK - I don't want to discredit what you are saying and this is a genuine question but what has made you change you mind from the post you put up on the 11th March?

I'm not going to re-post it here - if people are bothered they can check you posting history themselves but you have drastically changed your tune since then.

ATB - Paddy

Fair comment mate - the only thing I would say is I've spoken to a few people who have said they are all really surprised at how well the results are holding up as the results keep coming through - they would have expected a lot more "holes" in the mineralisation and we're not seeing that happen. These are people with extensive geological experience but you are 100% right to error on the side of caution and then be happy with an upward revised estimates if that is what you prefer to do.

I've always been a glass-half full person (drives my wife mad) lol.

As for the 450m - that is the figure used by GGP for the length of the whole zone - if you want to break out just the high grade then surely you need to allow for both legs of the high grade - I guess people can make up their own minds.

ATB - Paddy

Ok SK,

I haven't had a chance to look at the drill intersections at depth but the most glaring thing that I can pick up is if you only intend using an average of 20 metres you need to use the length on both "legs" of the horseshoe and also the "U" bend at the bottom end. I have just quickly measured this on Google Earth through the centre of the purple zone and I get roughly 900m so straight away you can double your estimate.

I will need a lot more time later to look at the "average" widths.

ATB - Paddy

I will have a look at the drill intersections at depth to see if I can work it out a little better.

Thanks for your pointers.

ATB Paddy

I did realise the pitfalls of using the 2D image and I did put a disclaimer on my theory to say that I was assuming the measurements stayed constant.
My thinking was in sections in may decrease but in other sections it may increase so therefore would average out over the entire depth.

Paddy

Hi MFU,
The table shows the size of the deposit overall in Au equivalent so we would have 30% overall as you stated.

I wouldn't like to guess at monetary value at present but factors like the high grades, proximity to Telfer, Newcrest's desperate need for ore will all have a bearing.

ATB Paddy

Good morning SK,

Did you see my Twitter post from a while back where I tried to estimate the volume of the 'high-grade' purple zone only?

https://twitter.com/paddygall1/status/1241011889548726273?s=19

Have a look and see if you can pick holes in my theory

ATB Paddy

Yes - makes total sense.

I suppose Newcrest have to balance up a royalty payment with a lowball MRE or a massive premium to the MRE figure to somehow cover the future size of the ore-body,

I'm sure GH will be all over it like a rash - I'm very happy that he is in the negotiating chair.

ATB - Paddy

Thanks Grizzle - I'm gonna show my ignorance now and ask what is an NSR?

Definitely mate - GH reckons the Copper in the high grade zones is worth up to 0.8 g/t Au. This would in theory cover the AISC costs leaving the Gold as pure profit.

Hi Jerry - yes you are correct - it should say $500 million. I'm not sure if those processing costs are included in the AISC - I will have to re-check in the yearly reports.

Hi CB,
I've always advocated us holding onto our 25% for the future as I can see our 25% share of the profits being probably more per year than our current market cap but I fear that Newcrest may not want a junior partner when they eventually come to develop Havieron.

That brings us to how do they fairly value Havieron after MRE if they do want to pounce at that point - IDK is the answer to that but I'm sure that if it does happen it would be a "friendly" offer and as such it would need to be a decent one if GH and the BOD were going to recommend it to the shareholders.

Alternatively Newcrest could carry on through stages 3 & 4 and then we would have a much clearer view of the actual size and scope of Havieron. I guess it all depends on the initial offer than NCM come up with - if they come up with and offer that is subsequently rejected then it might place some strains on the relationship.

One thing for sure is it's going to be an interesting 6 months one way or the other.

ATB - Paddy

OK so let’s try work out what Havieron may be worth to Newcrest
Let’s use the Numis conservative estimate of 5.5 Moz and assume Newcrest own 100%
We know Newcrest is treating head grade at Telfer now of 0.7 g/t and breaking even or making a small profit and their AISC is roughly $1,200.
Let’s say NCM are going to produce 500,000 oz per year from Havieron for the next 11 years and the average grade is “only” 2.5 g/t.
So, they would only need to process 0.28 times the amount of ore to produce the same amount of gold they get from 0.7 g/t so let’s be conservative again and say the AISC would halve to $600.

Now let’s build in a $500 Million Capex cost for the mine and road development and add another $50 per ounce to the AISC to cover transport costs. (I’ve been told $10 an ounce would cover it)

OK so (500,000 x 11 x $650) + $500,000 = $4,075,000,000

Now work out your profit from the selling price – let’s assume over the next 11 years the average gold price is $1,500 / ounce 500,000 x 11 x $1,500 = $8,250,000,000

So, Newcrest could easily make over $4,000,000,000 on Havieron on these very conservative estimates.

Newcrest produce gold at Cadia for an AISC of $142 @ only 1.19 g/t

Now look at what size deposit do we actually have, what will the actual average grade (including CU) be, what will the AISC be, what will the actual Capex and transport costs be and lastly how high will the gold price be over the next 20 years.

IMO - Newcrest will be making multiples of the $4 Billion

GLA - Paddy

Flashy - while that possibility cannot be 100% ruled out Newcrest are doing everything in their power to ensure that their operations continue as normally as possible.

https://www.newcrest.com/covid-19

ATB - Paddy