focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Https://youtu.be/k4nlbZ7P66k?si=nVNm1AJmT9P07ytH
Shaun Day, MD, Greatland Gold Joins Liam to discuss the RNS (dated 24th October 23) https://polaris.brighterir.com/public...
Greatland Gold plc (AIM:GGP) (Greatland or the Company) provides the following update on activities and progress at Havieron, the world class gold-copper project located in the Paterson Province of Western Australia.
It is a disappointing RNS as we've gone from potentially between April to June to between July to September delivery of the DFS and the Sunset Clause seems to have been moved or removed I assume, so I can understand folk being upset as the DFS might now be delivered almost 2 years beyond initial ETA, I know I certainly am.
However it's 1-3 months in a multi decade mine and if they are finding the potential for more water content than expected in the Aquifer then it makes sense to analyse and if needed adapt the development. As detailed in RNS the depressurisation will continue as it greatly assists dealing aquifers from the two previous instances.
Also that this work might result in a more efficient workflow and reduced costs and that in the meantime underground activities such as the ventilation system will continue in too and these activities are all significant development milestones and derisking events. I do think from my own experience of project management that doing the utmost to understand a potentially unexpected issue in an upcoming project stage is essential to avoid larger issues in future.
However... of course it also means a potential delay of 1 to 3 months more in the DFS detailing the financial and technical details that will drive the formal DTM and from where we would expect a SP rerate to really begin as should drive Insto demand for the stock. I so feel Shaun should do a few interviews and clarify what he can this week after this RNS to assuage fears, explain the issue in more depth and answer other questions perhaps that come up.
I agree with others that the wording does not imply that production will be brought forward at all, Shaun mentions 'maintaining an accelerated pathway to production' as in the overall project timeline being so rapid from discovery to production IMO.
Come on Tig... "a few peripheral activities'... reflect on how much input and work before Shaun's time GGP had in anything outside some input into the drilling plans and feedback on analysis of results etc. once NCM partnered with us, we were increasingly more passengers than partners - which is where Majors often want to buy off a Junior and keep the rewards all for themselves.
- Fighting off a suddenly hostile JV partner in a very disadvantageous option exercise and still coming out in a positive manner by creating an independent MRE and valuation despite the challenges of an economic PFS, cut-off date for data and conservative asset price decks etc.
- Managing funding of the Hav project from a DFS and lately deferring interest payments to a DFS release and securing continued commitment from the Banks and a standby loan from Wyloo
- Ensuring we have been able to meet our financial commitments to date on developing Hav despite the tougher fudning climate for Juniors
- Building a world class mining team with a BOD worthy of any Global leading corporation or Major Mining company ready for transition to a company with revenue who can grow organically and inorganically
- Building strategic focus in Australia and divesting further afield tenements
- Continually optimising the Portfolio and applying an economic but effective exploration methodology to ensure future success as much as possible
- Securing a farm-in with Rio on more very prospective ground within the Paterson
You seem to be confusing some of us being in agreement with the current strategy around dealing with the complexities around the NEM/NCM acquisition delaying these milestones and opening up various threats and opportunities as blind faith aping the same insults thrown by certain rude posters.
Not at all, and IMO quite telling that those with more nuanced understanding of business strategy and/or technical matters seem to make up a fair number of those that you are currently in constant disagreement with. You're entitle4d to your opinion but these assertions that ample count reasoning hasn't been articulated by you and a couple of others is completely inaccurate.
I'm not familiar with UPL but you'll always get outliers and exceptions to any averages in a current market.
Certainly in any M&A cycle, you get the biggest premiums paid when late movers end up competing for a diminished number of opportunities. Has to be said that NEM themselves have been busy with GoldCorp and NCM now so very much an early mover. but you never know what might happen in future. The DFS will help build an updated baseline for a valuation of course.
In this episode, Dr. Rob Stevens teaches investors what to consider when assessing an underground mining project. Dr. Stevens (Ph.D., P.Geo.) is a professional geologist and educator. He has trained numerous brokers, analysts, and investors in the basics of mineral exploration and mining via his training course. After teaching this course for many years, he eventually published its content in his book, Mineral Exploration and Mining Essentials.
0:00 Introduction
2:57 Mining methods
5:56 Important Considerations
12:08 Mine layout and access
15:48 Selective methods
21:00 Bulk methods
23:23 Underground mining videos
24:15 Rough operating costs
25:34 Underground mining challenges
33:15 Dr. Stevens’ resources
https://youtu.be/nCzGwOwmZac?si=eL7mzvvQ16R95cAu
Looking at Don's valuation method with far more conservative metrics still make Havieron very appealing to try and get to a 20p-ish valuation at First Ore.
Say you stick at 400,000 ounces (in between the 350-450k range signposted in DFS by Shaun) this is 120,000 attributed to GGP.
Go for a Gold price of $2k by First Ore and assume a $1k AISC (adding circa 34% plus to NCM's PFS AISC of $743 so hopefully very conservative) still leaves you with a $1000 margin.
That's $120m (£98.4m) FCF and with a P/E of 10 gives just over £0.19 target SP valuation.
p.s 30% of 350k production gets you £0.17 rounded up and 450k gets you £0.22 rounded up
p.p.s Just for a more conservative illustration using Don's method to get to around 20p in target value.
Hi Z - I reckon a SP offer at 20p plus would be successful personally and I'd certainly consider it carefully even though I can wait as a low average and no need for funds.
But you can't judge offers from chart groups as not representative of entire SH base inc. of course large insto holders - but would NEM pay that realistically, a 200% plus premium on current SP and would their shareholders agree?
What's the largest premium above SP that's been paid of late for a gold/copper explorer, do we have 200% plus premiums on closing SP examples?
Quite the reversal in your intel's predictions going from wanting to divest to now buying out GGP's stake Sisu, any reasoning provided as nothing has changed around the project?
Well if true then they'll be as committed as NCM were to bringing Hav online as quickly as possible to avoid a gap in ore at Telfer.
Also created some highlights from Don's interview of key points:
Highlights from AIM ON AIR Interview with Don Durrett - 18 OCT 2023
https://www.ggpchat.co.uk/viewtopic.php?t=818
I think the 200k ounces from Don for GGP is a bit high MH01 from the expected production profile from decline overall of 350-450k ounces, so perhaps 30% of 400k is a good value for GGP calcs :-)
350k = 105,000 for GGP
400k = 120,000 for GGP
450k = 135,000 for GGP
https://www.ggpchat.co.uk/viewtopic.php?t=662
Bell Potter Conference - 10 Feb 2023
But if we move across to the first slide after the disclaimer, we have the just an orientation around our strategy and there's really three pillars to our strategy which is deliver on an expanded Havieron, we continue to do that and the expectation is that will be moved from two million tons per annum in the pre-feasibility study to three million tons per annum which will take it to around a 400 or 450 000 ounce per annum asset.
Q - Thank you very much, you know you spoke a lot about what's happening at Havieron, you touched on you know potential first production in sort of March 24 I think, you know what does the production ramp up there look like and you know what are your thoughts on achieving commercial production and what.. could you remind us again of sort of the ultimate production rate that's contemplated there?
A - yeah Brad, look so we we're looking at a 400 to 450,000 kind of gold equivalent ounce profile for up for 100% of Havieron, the... when we think about this it'd be first ore in kind of the March or around March 2024 and then we have the ramp up following that
Freddie, be grateful someone well researched on GGP interviewed Don and was able to get some really good insight from him. Don listed almost all obvious red flags himself but also showed some big gaps in fundamental knowledge that Liam did a sterling job to cover but not easy when you'd don't have a producer helping out or someone who is more of a facts geek like a few of us here.
And Don's perception of the management team is fair as Shaun isn't a proven CEO but also plenty of operational skills across the business as Don's wasn't heavily clued up on the entire staffing set-up. Don covers 950 companies, he does not have a granular view of the company as was obvious during the interview.
BUT nor does he need to with his evaluation and investment formula's for a more broad based approach. More so a checklist that works I'd say as he's in GGP very cheap in a pre production play, did you look through the PPSS summary of Lobo Tiggre's annual report I made?
Some good information in there so I'd recommend reading the entire PPSS report, a PPSS entry is what Don's chosen to do with GGP but he does appear to have a 5-8 year timeframe, gave a very good rating for risk at medium as lowest he ever goes is Medium-low and perhaps a longer investment timeframe if GGP delivers on growth. I also recall Liam being honest about his and many biased shareholders shortfalls during the interview so a bit weak to criticise him, read the transcript. One thing Don and perhaps Liam missed pointing out too was pointing out buying in revenue from memory (I should read my own notes lol).
Don had plans to meet Shaun and no doubt will do so in future where he can evaluate him. A fair few of us with corporate experience and exposure to high profile c-suite clients/employers have met Shaun and most seem to have found him to have the right qualities and knowledge base to turn out to be a great CEO. His previous CFO role will cover many important areas of a company focused on growth and the entire team itself... decades of experience and skills of the highest calibre - so you mix that skillset and experience with teamwork - you'll have a great team capable of some huge things :-))
Notes from AIM ON AIR Interview with Don Durrett - 18 OCT 2023
https://www.ggpchat.co.uk/viewtopic.php?t=817
Today’s guest Don Durrett joins Liam to talk about, Greatland, Havieron, and Gold. Owner of www.goldstockdata.com. Author of How to Invest in Gold & Silver: A Complete Guide with a Focus on Mining Stocks (which is available on Amazon).
Expert on gold and silver mining stocks. A frequent guest on investment podcasts, with a large following on Twitter. Don Durrett is at the front of sharing information on gold and silver miners along with its macro data that has an impact on it. Follow Don here: https://twitter.com/DonDurrett
Interview Link:
https://youtu.be/-5Je0nmFDFo?si=GSyY1L90hu_Us5_E
Notes:
https://www.ggpchat.co.uk/viewtopic.php?t=817
I don't think Newcrest were shorting us or Newmont is, just being shorted by various parties either as a general sector focus or some smaller private groups of traders who saw potential for massive retrace after stock market bubble burst as we like the likes of eua and arb etc. had a mass retail following that made the perfect targets...
Hi Mh01 - I was looking through this too and also had a quick look through this document: that assists with mine closure guidance.
https://www.dmp.wa.gov.au/Documents/Environment/REC-EC-112D.pdf
Section 11, page 19;
11. Financial Provisioning for Closure
As per the Statutory Guidelines for Mine Closure Plans the mine closure plan must include the details of closure
costing methodology, including clearly documented assumptions and uncertainties.
The objective of financial provisioning for closure is to ensure that adequate funds are available at the time of closure
and that the community is not left with an unacceptable liability. To that end, it is essential that the cost of closure be
estimated as early as possible.
DMIRS recognises that providing verifiable closure cost estimates at the early stages of a mine’s life is subject to
many assumptions and unforeseen events. DMIRS expects assumptions to be summarised and ± cost variation to be
provided. This per cent variation should then be refined during operations and decommissioning.
The financial provisioning process and method(s) has to be transparent and verifiable, assumptions and uncertainties
have to be clearly documented, and they have to be based on reasonable, site-specific information and data
throughout the life of the project.
The closure cost estimates need to be regularly reviewed to reflect changing circumstances and levels of risk. This
will ensure that the accuracy of closure costs is refined and improved with time, and will assist with management and
mitigation of high-risk issues.
It should be noted that levies paid into the MRF required under the Mining Rehabilitation Fund Act 2012 and the Mining
Rehabilitation Fund Regulations 2013 are non-refundable and separate from the internal accounting provisions for
closure and rehabilitation and should not be used to offset the costs for rehabilitation. The mine closure plan must
contain a summary of the mine closure costing methodology, assumptions and financial processes to demonstrate
that the proponent has properly considered and fully understood the costs of meeting closure outcomes identified in
the mine closure plan, and made adequate provisions in corporate accounts for these costs.
The process and methodology for calculating the cost estimates must be transparent and verifiable.
Reference to the detailed closure costing methodology must be provided in the plan. Where necessary, DMIRS may
require a fully detailed closure costing report to be submitted for review, and/or an independent audit to be conducted
on the report to certify that the company has adequate provision to finance closure. Where appropriate, the costing
report should include a schedule for financial provision for closure over the life of the operation (ANZMEC/MCA 2000)
Info on MRF:
https://www.dmp.wa.gov.au/Environment/What-is-the-MRF-19522.aspx
https://www.dmp.wa.gov.au/Documents/Environment/ENV-MEB-381.pdf
I'd need to check but I assume once the DFS/DTM come through (conservatively expected within H1 2024) and given the funding is sufficient to meet DFS assumptions, then the funds will be released to exercise the work required to get Havieron into production.