Greatland Gold wants Telfer dams fixed before takeover14 Sep 2024 07:21
Andrew Forrest-backed Greatland Gold confirmed it was close to buying Newmont’s Telfer gold and copper mine in Western Australia, but said it wants leaky tailings dams at the site fixed first.
The Australian Financial Review’s Street Talk column revealed on Monday that Greatland was set to issue close to $500 million of new shares to help fund the deal, with major shareholder Dr Forrest set to subscribe for his allocation of stock.
Greatland told the London Stock Exchange on Monday evening that a deal was close.
“Greatland confirms that it is in advanced negotiations with Newmont in respect of the potential acquisition, which remain incomplete,” the company said, adding that the talks were exclusive.
Greatland has been the hot favourite to buy Telfer since Newmont put the asset up for sale in February – Greatland already owns 30 per cent of Havieron, the nearby gold and copper discovery that underpins Telfer’s future.
Telfer was a marginal asset bound for closure in 2018 when Greatland discovered Havieron about 45 kilometres away.
Telfer’s owner at the time, Newcrest Mining, rushed to buy 70 per cent of Havieron to ensure its prospective geology could be processed at Telfer’s infrastructure.
Newmont became Greatland’s partner at Havieron when it acquired Newcrest last year. Newmont is selling Telfer and several other mines because it does not consider them elite by global standards.
Greatland’s 30 per cent stake in Havieron gives it the right to match offers for Newmont’s stake. While Greatland does not have matching rights for Telfer, most buyers would not be interested in Telfer if it did not come with Havieron, meaning Greatland holds all the aces.
But the 47-year-old Telfer is showing signs of wear and tear; two tailings dams at the mine have been leaking, forcing Newmont to curtail production for repairs earlier this year.
Greatland told investors it wanted the dams fixed as a condition of buying Telfer. “Settlement of the potential acquisition is proposed to be conditional on completion by Newmont of ongoing remediation works in respect of the Telfer tailings storage facility,” the company said.
Dr Forrest’s private company Wyloo Metals owns 8.5 per cent of Greatland, while three of Greatland’s seven-person board of directors have historical links to Dr Forrest’s flagship company Fortescue.
“Existing cornerstone shareholder Wyloo is intending to provide material support for the potential acquisition,” Greatland said on Monday evening.
The long-awaited combination of Telfer and Greatland could be just the first step in a broader consolidation of WA’s Paterson Province; Rio Tinto is looking for a partner to develop the Winu copper and gold discovery about 100 kilometres north of Havieron.
https://www.afr.com/companies/mining/greatland-gold-wants-telfer-dams-fixed-before-takeover-20240909-p5k97b
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