Berenberg Flash Note 22/727 Jul 2021 16:05
This could be quite a long message. Apologies for those that don’t like to read long messages :-)
Berenberg Flash note from the 22/7 after the latest drill assays. Missed the 7/7 upgrade unfortunately. Hope this helps.
“Drilling continues to deliver, development progressing”
? Drilling suggests extensions to Northern Breccia Zone: Greatland has released further drill results from the ongoing drill programme at Havieron in western Australia. This suggests the potential for extensions to the existing resource with hole HAD138 intersecting 84.5m at 2g/t gold and 0.05% copper and HAD136W1 intersecting 36.2m at 2.7g/t gold and 0.09% copper. Both of these holes are in the Northern Breccia where 21 holes were completed, and these intersections are outside of the December 2020 resource shells. A total of 29 holes with 25,418m of drilling have been completed since the end of March. Results from 14 of these holes have been received with the other 15 completed but with assays outstanding. The programme is targeting the North West Crescent and Northern Breccia to expand the inferred resource, the Eastern Breccia to identify geological controls on mineralisation and the South East Crescent and Breccia to define extensions beyond and adjacent to the resource shells. In our view the drill results suggest that it is likely that the current resource of 52Mt hosting 4.2Moz on a gold-equivalent basis will be materially expanded.
? Development work also progressing: As announced previously, the box cut was completed in May with development of the exploration decline commencing and with 69m now completed and all of the associated surface infrastructure nearing completion. Management has reaffirmed that the prefeasibility study should be completed in H2 CY2021. This, and the next resource update, should be the main near-term catalysts for the shares. Permitting is ongoing to develop an operational underground mine with associated infrastructure. We view it as a positive that Newcrest, which is earning a 70% interest in the project, has moved development of the decline to 24-hour operation. Havieron should provide a source of high- grade ore to the plant at the company’s mature Telfer mine, extending its life and driving down costs.
? We maintain a price target of GBp29 based on an EV/ounce of USD769/oz, assuming that Greatland eventually retains a 30% interest in Havieron and 12Moz is ultimately delineated with a 50% risk weighting. We maintain a Buy recommendation.
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