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Shaun
āthis morning you've openly stated that should there be an opportunity to consolidate the asset you will, would you care to expand on this in your own words on what you mean by it and why you would publish this in an RNS?
- well look we're excited and I think our shareholders should be as well about the opportunities ahead of us and Liam you know we spoke briefly just as you were getting kind of ready to set up the call about you know I joined in 2021
- I think I was reasonably open that you know I saw this platform having an opportunity to bring back ownership of Havieron 100% into the vehicle and in that regard you know I think we've built the organizational capacity
- we've brought in you know a very sophisticated board, the debt Banks which is undrawn that you referred to which was 220 million on a 30% basis that potentially extrapolates to a 700 plus number
- the strategic shareholder (note: Wyloo Metals) and now we have a joint venture partner which has publicly stated that within the next 12 monthsā¦ I think they said this back in late February that they'd like to completed divestment
- so this an exceptional confluence of events and opportunities and look we think we're really well positioned to take advantage of that opportunity and you know there's the opportunity within that is important to us
- and I think people should be confident that we would think about that you know in a very financially disciplined way and I think I've got a history at Straits at Sakari and then at Northern Star of being part of teams that have been very financially disciplined and have managed to undertake transaction that have created value
- they were accretive to shareholders and I think people should have confidence about that and I don't know the future but I think people should feel that the team is working hard to position ourselves for that successā
Hi Dip
Telfer 2002 interesting read for the weekend
https://www.epa.wa.gov.au/sites/default/files/Referral_Documentation/A1445_R1059_Telfer%20ARI%20Report-main_0.pdf
Page 67 tailings management
Https://greatlandgold.com/wp-content/uploads/2022/03/GGP-Growth-Update-Final.pdf
Page 12 shows the Ggp AISC figures for a 2mt mining plan
Difficult to spot but Ggp AISC $643
Then look at the centre circle top left in black ācreditsā $367
This has to be added to the 643 making a total of $1,010, so thatās gold only AISC.
Newcrest has a higher number I believe it was $1,060 which I believe is down to their accounting procedures or dearer admin costs.
The 3mt mine plan will have a higher AISC as the grades are lower, therefore more ore required to be refined for same ounces and more backfilling.
Having Telfer will be a huge asset.
Thereās more Ore around and still a lot of exploring to do.
Ggp will be a leaner fitter owner of Telfer and will reduce the AISC in time.
Yes thereās issues but the Paterson is still in its infancy.
Parklands is close by and could be a good find 10-20 Km from Telfer.
The Wilki tenement of Ggp is even closer and Callum suggested that was the source of Telfer. Ggp are drilling that area this year.
Having Telfer will be very profitable eventually.
Newcrest exploring the surrounding land were looking for big margin finds, Ggp donāt need those big margins.
Hi Cheltenham flyer
Step back a bit from the 8.5moz MRE as that is a resource gold equivalent number including inferred.
The 3mt mining plan is for the SE crescent only, a tiny proportion of the total mine but very high grades.
This zone has a resource figure quoted as 3.5moz gold so the reserve figure is 86% of that. This is the ore they will be mining. Also 150,000 ton of copper converted 86% to about 130,000 ton.
The first Ore out is very high grade and will more than likely produce more than the average estimate I have quoted. Other areas may produce less.
The first 5 years in the top 400m will produce from memory 80% of the 3.5moz, this is due to the shape of the ore body producing less per year as it goes down
Hi Spades
If you look at what Newcrest said about their AISC for Havieron starter mine it was $743 per oz but that is for a gold eq the gold alone figure is higher . Ggp figure is $1060 for gold only. Iāve upped it for inflation.
Iāve not really included Telfer figures as the ore is running out but have included the costs at Telfer.
The AISC at Telfer is frighteningly high if they continue to mine. Costs will have to be managed and a lot cut out.
I hope that explains my thinking
Hi Speedie
The POG needs to remain strong if gold is to pay all Ggp costs. This allows copper to be all profit.
Taken as Ggp own 100% and Telfer
āGold price say $2400
AISC $1200
Revenues $1200 per oz
MRE 3.5moz
Thatās approximately $350m pa
Over a 12 year period
$500m debt divide x 12 =$41.7m plus interest 8% $3.3m =$45m
Capex $100m
OPEX $50m
Admin $10m
Exploration $20m
Royalties and taxes $100m
Total approx $325mā
āIāve taken wild guesses at costs so donāt look into it too deeply but the point is the gold will pay all costs and may leave some profit.
The copper is the profit.ā
(Included rehab costs in capex, but capex and debt will reduce over time leaving more profit from gold)
Copper is approaching $4.71 per lb
From the MRE
150,000 ton copper thatās indicated in the SE crescent.
Convert to reserves 86% = 129,000 tons
Need 13.8 years averaged out to produce that tonnage.
At todayās price that is = $112m per year
That should be all profit. š
Looking at De Grey funding requirements of latest equity raise on page 12
This is Havieron requirements:-
Long lead items:-
Evasee fan
Paste plant
Early works:-
Complete decline to production level
Infrastructure:-
Access road to Telfer
Construction costs:-
Complete decline and stoping fronts
Working capital:-
Complete:-
Decline
Stoping fronts
Fan system
Paste plant
Evaporation ponds
Access road
Feasibility study
Fund Telfer plant and staff
As you can see most of the working capital is embedded in with the others, so $150m (not Aus $) is probably possible.
No matter who owns Havieron 30% 70% 100% thereās not that much more to get production going. Payback in 4 years.
Rest of working capital for the next phase of the decline will come from revenues.
Https://degreymining.com.au/wp-content/uploads/2024/05/20240508-DEG-Announcement-Investor-Presentation.pdf
De Grey presentation page 12 use of funds
Most of these items Havieron/ Telfer have already.
Certainly a lot of work happening on top of the tailings ponds.
A track has appeared at the 1 Oāclock position and goes around to 4 Oāclock.
Those 2 positions there has appeared a series of black rectangles, Iām presuming theyāre holes.
You have to remember you can see this tailings circle from space so these marks are very big.
They could be strengthening the inside of the dam perimeter
Modula flotation machines
https://m.made-in-china.com/product/High-Quality-Gold-Platinum-Copper-Ore-Processing-Flotation-Plant-for-Ores-Separating-1953362895.html
If you scroll down there are other Modular machines mainly on skids
Notice this crusher is on tracks and note the price
https://m.made-in-china.com/product/300-Tph-Impact-Mobile-Crushing-Station-Vehicle-Mounted-Limestone-Crusher-Cement-Concrete-Crusher-Plant-2079737545.html
That Ā£6m is what JLP are forecasting, each ore is different.
All these modules are portable some will come on skids. Most modern oil tanks and cement silos are all portable .
Telfer is a big old ancient plant built over many years, so wonāt be as efficient as new tech.
Havieron only needs 3mt to get around 400k ounces a year, itās a high grade mine it doesnāt need most of the Telfer plant.
Hi Red
Shaun did tell us in London that transporting that amount of ore to Telfer over the life of the mine is not sustainable and a more efficient smaller plant would be his goal in the long term.