Member Info for southwesterner

"SW - to be fair he also stated earlier on that there was "more value" @ Hav than the current inferred estimates.
He also went onto suggest that the regionals too would add value....
C'mon...let's have both sides of the conversation - eh ;)
I'm grateful for your considered inputs though, this evening...all grist to the mill."

Thanks zoros, and I'm glad to have some challenged debate etc. But from the people that come back with facts and evidence to add, not those who just blindly say Im deramping or whatever.

There is definitely more value at Hav than the current inferred resource - its just a question of just how much. My point right from the start was the majority of the value is in extracting the crescent zone as quickly (and soon) as possible - and the breccias will be lower margin. I still think thats correct, although yeah I am recalibrating based on this Newcrest webcast, maybe 3 phase operation... some high grade open stopes at 3Mtpa for a few years whilst they develop a SLC in SE crescent/SE breccia at 6Mtpa for 6 years, followed by other breccias at 12Mtpa for 10 years+, based on an expanded resource etc. Even then, most the NPV is in the first 10 years extracting crescent mineralisation, which is all I've been saying from the start. It will bump the value up a bit though if you start assuming there are 150Mt+ of breccias to follow on with. Also maybe more sub level open stopes on the NW crescent possibly... not sure where this is vertically but it looks near surface on the diagram.

Completely consistent with what I said about the *value* being in the Crescent zone. Just heard it direct from the Newcrest CEO... so there you go. Who is an idiot now?

Could possibly put a conveyor belt in to Telfer?

"No it’s not SW. total Hav drilling was about 130km in the first 18 months and they have already earned in 60%. It was a lot more than $20m spent. The next 65km is a substantial uplift in drilling and will go a long way in expanding the resource."

Yeah I mean there are lots of costs associated with drilling in the middle of nowhere, but look $150/m rule of thumb is not going to be a million miles away for the actual pure drilling costs, so $10m isnt going to be far wrong for 65km. Of course there is going to be lots of other project costs.

"By the way the SP figures you claim don’t allow for the potential of the project. I think you have turned up tonight hoping to add your own spin on the situation hoping to hit your target buy price of 18p. If you had a little longer term vision you might have bought in 12 months ago...."

I like the project, it wasn't on the radar 12 months ago to be fair, I dont do early exploration stuff much. I was just trying to answer the original question that started this thread... fair value of the inferred resource to GGP is 12-20p imo, and everything else on top of it is varying degrees of conjecture, hence why I think the SP has fallen to the kind of levels its at now.

I would note in the current presentation.... Newcrest CEO just said; "Telfer is a low margin mine, the grade from Havieron has the potential to....". I lost the exact wording after that quote, but he sounded pretty bullish about Havieron. So yeah I'm guessing GGP maybe even up tomorrow based on this, pretty positive appraisal by Newcrest they've made this a big part of their future plans for Telfer.

Okay they are talking about this as Im writing. Absolute crucial comments. "All Havieron" at Telfer was mentioned. The beginning of a "great new mine". Very interesting questions and answers.

"That's why they are doing 65km of drilling in the next 4-5 months
You can't see what's going on that's the problem look at tonight's presentation at the new model they've brought out and tell me that there's not more there."

Yeah watching the presentation tonight, very interesting. Lets just put 65km of drilling in perspective - thats under $10m in costs.

"The Maiden Inferred Resource Estimate covers fewer than 10% of the currently 'known' volume of mineralised ore zones (as per the shell diagrams detailed in NCM MRE releases. Have you actually read these documents?"

Sure, if you look at the entire ovoid there is 500Mt+ of "mineralisation" there - but the vast majority of it will be subeconomic, most of that volume is extremely low grade and below any reasonable cut-off. Even if cut-off is lowered for larger scale operations, you aren't going to get a 10x increase in the tonnage from mineralisation within the ovoid.

"NCM specialise in bulk U/g mining - The big money is made in bulk underground block cave mines. Havieron will contain 10-20moz, given the extremely high grade (2-2.5 g/t plus) and very long drilling intercepts (100-200m plus) throughout the breccia zones, fully documented in the NCM JORC data and in the mineralised shells."

If you read the report, you aren't going to get 10-20Moz at 2-2.5g/t from within the defined zones of mineralisation in this deposit. That is blindingly obvious to anyone numerically literate.

"Newcrest was built on Telfer. Havieron is another Telfer. Anybody with an eye for detail and even half a brain can see this."

Havieron is Havieron. Telfer is Telfer. This is all rhetoric, not facts.

"Southwesterner. All for qualified debate but the only relevant data is official data issued via Newcrest, GGP and our Brokers outside of that we all have one it does not make us correct but all I can add we are investors and for many of us GGP had now created a free float and minimum risk. If that makes us investing experts yes it probably does!"

And I'm the one using the official data! Its others who are conjecturing the resource is 10x larger than that currently reported.

"So you read the report that you are qualified to understand and chose to ignore the numbers from Cadia?"

Cadia is enormous compared to Havieron.... its like 50x bigger.... mining on a totally larger scale... not ignored it, just dealing in facts.

Sold 95%+ of my holding here @7-10.5p, nominal holding left over. Still a supporter of AYM in principle, particularly the development of the Parys Mtn project!

"SW oh give up for Christ's sake you are no expert, just a pain in the ar$e"

Just challenging the echo chamber here... I'm sorry you don't want to hear alternative views and analysis. I would have thought such debate would strengthen your understanding though rather than just ignoring it. I am a competent/qualified person under the JORC / NI 43-101 code, whether that makes one an "expert" is a matter of debate, but I'm not some random commentator with no background in mining.

"Your argument on low Breccia grades is flawed you are only looking at the inferred resource tonnage.
On a low estimate there's 500m tons of Breccia."

If thats correct then thats a gamechanger obviously... 20Mt/annum production rates, East Cadia style caving - yeah sure that would be economically viable. But yeah how come there is 500Mt of breccia not 50Mt in the resource? What are you basing this on?

"Why would NCM spend all this time and effort just to get to the HGZ your argument is not feasible. NCM are going to exploit this they want those Breccia's."

Presumably because they've got hold of 70% of this project for peanuts and are going to make $billions from the HGZ. it would be worth it from that alone. If there really are 500Mt of breccias then that could pay, but thats a 10x increase on the inferred resource.

Here's the interview; https://www.cruxinvestor.com/videos/aex-gold-aex---18-months-to-production-with-no-pea-fs-or-dfs-how

My question got made into the title I noticed, which was quite amusing. I found the CEO extremely confident, but bordering on arrogant, and made a note to keep watching to see what happened with the project, but keep my money well away from it.

Some may remember the disaster that was Angel Mining. Some very good engineers involved in that - but they made a total hash of this project. Have no doubt execution is key, having a detailed highly scrutinised plan is crucial - not making it up as you go along which seems to be the AEX strategy so far. A good way of burning through a lot of shareholder cash, but creating value? Not so sure. They should focus on drilling and putting together a proper feasibility study, executing a mine build anywhere in the world is tough enough even with those things, but without them trying to build a narrow vein underground mine in Greenland - is a recipe for disaster.

"I can't agree much with what your argument is about. The main ounces are in the Breccias there's so much of it."

In the current inferred resource, only 35% of tonnes, but 65% of the ounces are in the SE Crescent.

Even if there is a lot of breccias to have, I don't think they will add that much value to the project once you take off operating costs, capex interest, sustaining capex, recovery rates - there isn't much margin left. The grade is just too low.

Take a look at https://www.newcrest.com/sites/default/files/2020-02/200213_Newcrest%20Resources%20and%20Reserves%20Explanatory%20Notes.pdf

Telfer Underground has over 40Mt of remaining resources at 1.6g/t Au & 0.4% Cu - around 2.5Moz. Hardly any of that is currently in the underground reserve, because its too low grade. And thats right next to the Telfer Mill. Meanwhile 45km away we are building up a large 50Mt+ breccia resource, but its very low grade - only 1.1g/t & 0.15% Cu - so what is its economic value? The margins will be low. With 85% recovery, your looking at around $60/t NSR, and operating costs including sustaining capex, transport to Telfer, etc will be around $40-50/t based on Sub Level Caving, so the margin is not great, your only picking up about $10-20/t, and there's a lot of overheads to pay for to keep this gigantic site, mill, etc going. I've been out there its huge (telfer). Anyway your 50Mt of breccia resource has only got a cashflow of $0.5-1bn (50Mt x $10-20/t) on it. You can find a lot more of that stuff, but its fairly low margin, it wont get priority into Telfer Mill until there is nothing else to feed anyway.

Whereas the Crescent is worth $250/t, operating costs of $70/t or so for LHOS all in sustaining... so the 20Mt of that are worth $3.6bn in total cashflow. 3.6x as much as the breccias for 2/5 of the ore, ie. each tonne is worth 9x as much in cashflow.

The good news is that a lot of the breccia is in the footwall of the crescent so can be picked up all together for SLC operating costs but a mix of grades, and that'll be the optimum way to extract some of the resource probably. But the standalone breccia zones Im not convinced these are worth as much as the tonnage/ounces will suggest.

"I can see from what we have at Scallywag there's more to come."

- how can you see that? The intersections were totally worthless...

I was in RMM a fair time ago, before the original Lower Footwall Zone pre-feasibility study several years ago - sold out at a loss. Unfortunately I lost on the investment because copper prices tanked, but the project was always strong. To keep RMM afloat, they had to engage in massive equity dilution, and that really destroyed shareholder value, shares are a fraction of what they were back then, but here we are - still mining at Ming. Still a good project. I would say this is a good well leveraged play on copper prices (as a fairly high cost producer), with decent additional massive sulphide resource potential - significant resources in the LFZ and potential to scale up production incremental tonnagest to lower costs, etc. I'm not in, was really teetering on the edge of having a punt at 0.25p a few months ago, but obviously once bitten twice shy for me. I think its a decent bet though objectively anywhere sub 0.5p.

If you go back to my post on 03 Aug 2020 17:36....

"the key question leading on from the fact no economic study has been published, is the equity raising adequate to reach production? Is the current capital raised enough to commission the proposed mine and 300tpd processing plant?"

So I warned about todays RNS back then, the question was put to the CEO, and he brushed it off in the CRUX investor interview. But in fact it is an inevitability, if there is no clear plan of what is being executed, that there will be cost overruns. Blaming Covid is ridiculous, it was obvious that in a jurisdiction where all of your mine workers are going to be FIFO, that it would be impossible to execute mine development during the pandemic, it was clear in June last year, and they would have had to start mine development months ago if they were going to be in production by the end of this year. Spend the money on drilling, delineate a proper resource, that is key. But the real question is why is there no published scoping study or feasibility study - how can the company deliver a mine if it doesn't know what it is building. Continued high risk of execution failure here - unknown funding requirement to complete.

"Southwesterner, if you were a third party not named Newcrest and wanted to acquire GGPs 30% interest of HAV right now, what would you pay?"

Without additional due diligence... probably no more than £500m. But I suspect if the share price drops to those kinds of levels, someone would make a bid. I wouldn't recommend accepting it though, and I suspect Newcrest would probably outbid them if that happened. But yeah thats what I mean, its a good project, solid value not far underneath the current SP - it just doesn't justify an infinite share price or 35p+, hence my explanation answering the OP.

"SW in your overblown statement you said and I quote " you think " that's all it is your thoughts not the precise figures that an expert or Newcrest submit .. if you don't think there is more than 12m Oz of gold in Havieron then why are you here stirring the pot with unsubstantiated claims. Sorry pal but you are heading for the bin with all your pathetic calculations that do not add up !!"

- show me where an expert or Newcrest said there was 12 Moz of gold.

"So Southwesterner can you explain valuation against the moz estimate and show your workings. The Broker note stipulates a 33p estimate based on a 12moz equivalent AU, in which they factored in a level of risk, current gold price, processing costs, bulk mining etc, This doesnt factor in additional for copper and its increasing price. This also doesn't factor in all of the additional targets outside the Hav drilling but within the JV terms. It doesn't factor the 65k worth of drilling to be done within the next 6 months. If i make a rough assessment of say 20moz by the final estimate, do i take that to mean 30% being valued at around 60p? Not included in that is copper, Juri JV, Kracken (Scally) and other sizeable projects owned"

Have you read the resource? https://greatlandgold.com/wp-content/uploads/2020/12/20201210_Havieron-Iniital-Resource-JORC.pdf

There's 4.2 Moz of Au eq, not 12 Moz. My valuation is based on the Havieron inferred resources, with a simple discounted cashflow analysis. LHOS (long hole open stoping) of upper 300m of crescent zone followed by SLC (sub level caving) elsewhere. Not fantasy numbers based on random discounts to theoretical numbers of millions of ounces. The truth is that of that 4.2Moz (eq), 2.8Moz (eq) are held in just 35% of the resource - the south east crescent zone. Thats where the value is, and that is still open, but its probably largely delineated now.

So yeah I would be extremely surpised if 12Moz is achieved in the next resource update or PFS, I would be surprised to see more than around 3Moz indicated and 4-6Moz inferred, for a total of 7-9Moz for the late 2021 update. Also it does not just matter how many millions of ounces you have - it matters what grade they are, and what depth they are at. I think most of the higher grade crescent mineralisation is already outlined, and a lot of the additional ounces will be lower grade breccias, some at considerable depths which won't be mined until years 10-15 onwards in the mine plan, so have a lower impact on the NPV. A million ounces of 5g/t material could be worth around 10x what a million ounces of 1g/t material is, for the same mining method and depth etc. Most of the higher grade mineralisation is now delineated bar the NW crescent which appears to be limited compared to the SE Crescent, although not irrelevant. I think ascribing huge values to other projects which are but names on a map currently is premature, so does the market it appears now the day traders are exiting and this company matures. Of course if there's another Havieron, everyone can say told you so and it was worth more etc - but realistically no one knows if they will find another yet, its not inevitable, if they can get a drill bit to go through another massive high grade gold deposit - thats when the value is added, not before.

"The truth? Don't follow your argument, certainly without any detailed costings. It's certainly way out of line with other more informed views. Perhaps it's just your version of the truth - you really should just have prefaced the whole paragraph with "in my opinion"."

I am modelling the NPV of the Havieron resource as it stands in that valuation, not looking at exploration upside or the total value of the company, which I go on to explain adds several pence to that in the next section, had to post separately due to character limit. I certainly haven't seen any more informed views that particularly contradict this. For GGP as a whole one could easily ascribe a value of 25p based on the known resources at Havieron, exploration targets at Havieron, and the other projects. GGP is a great place for investment funds to park their money for a couple of years in the current market, solid project, a major gold mine in the making - but the multibagger AIM club should move on. So I think the market may settle a little below current levels, and then build up from there long term, unless there are any dramatic new discoveries.

So anyway, the point is, GGP was clearly overweight based on the value of Havieron at 35p+, so that means value was being attributed to the other group exploration projects. Huge values, well into the several hundreds of millions, much more than other companies with similar license positions in the Paterson Range (eg. Artemis Resources, Antipa Minerals, etc). One swallow doesn't make a summer. Have they found some magic formula that will allow them to unlock more Havieron's in their licenses? One can hope, but it is just that hope - it is not a proven formula based on one deposit. Did they find Havieron with a magic formula, or was it a fluke? Only time will tell. But the initial Scallywag drilling had absolutely nothing really of any significance mineralisation wise, and that was obviously a primary target. So you have to consider the market should ascribe some value to their other tenements, maybe £100m or so - but not the kind of levels it was, so the true market value is a few pence for them at most - until drill results say otherwise. So I think yeah the share price settling down into the high teens for the foreseeable unless there is a dramatic drill hit outside the Havieron resource, is both inevitable and logical. The positives are the development of Havieron is fully financed by Newcrest, and its a really solid project that offers a clear backstop of value to the company and newsflow going forwards - I have no doubt whatsoever by 2023 there will be ore coming out of Havieron and that it is worth at least £1.5bn NPV, 30% to GGP. Thats a good base to build from. Would I personally buy at 23p? Probably not. 15p? yeah maybe. Would buying at 37p have been fairly stupid? Yes. 23p? Justifiable.