The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Dunno Timber, I kinda feel we’re getting to the point where we don’t need to divest, particularly an asset where we had over 20 meters at 3.3 g/t (9m from surface!). I know it’s not elephant country and maybe SD isn’t interested, but it’s a nice clear path to organic growth in the short term. Add some separate ounces to GGP, away from NCM and the Paterson. Imagine how many 200m holes we could drill with a rotary rig in Tazzy, nice and breezy Antarctic summer!
Anyways, I see we’re sat at 14p….ready whenever your are, market!
I shall defer to you, Mr. Gall!
I’m still wrapping my head around Bamps posts from about a week ago, highlighting the grades which will be mined first out of the upper stopes. I think the first and second year free cash flows have been significantly underestimated….it’s a thing of beauty in terms of GGP developing as a company. Low overheads, early free cash flow, debt facility in place and future capex becoming easily manageable.
Now can we please farm-out Warrentina (keep 70%) and grow our own open pit resource! Low hanging fruit…
And yes, all to play for next week. Could be chaotic (in a good way).
Let’s try and clear this up - when SD refers to 50% increase, he is talking about tonnage going from 2MT (current PFS) to 3MT. This has been mentioned before, and we know that they will likely get up to 6MT from the current decline alone. Fraction of a fraction starter mine.
Nothing to do with updated MRE or declared ounces in the ground.
I took the ‘50% increase’ in the next FS to mean 2MT to 3MT, which he has mentioned many times before.
Agree with your comments though Zoros, I think at FS or MRE3 (early 2023) we will have at least 10 m/oz on paper.
Hey Bamps,
Have a look at page 12, this is how the $643 AISC is calculated and includes the copper revenue from the mine. If you could share your AISC estimate perhaps I can see where we differ.
https://greatlandgold.com/wp-content/uploads/2021/10/GGP-Growth-Update-Final.pdf
Gold price won’t affect the AISC, it only affects the per oz. margin.
For copper, GGP use $4.08 / lb, wherein today it’s around $4.50 / lb spot. Hence this is how I get to a theoretical AISC today of just under $600, and a per ounce margin for the mine (gold and copper) of say $1,200+.
This is all of course based on the minuscule PFS and 2MT, and will only improve quite drastically.
Again, glad to be corrected, always appreciate your posts.
Hi Bamps,
The $643/oz AISC within the GGP PFS is built up with mining, transport, haulage, admin, etc. totaling $1,009/oz AISC. The copper revenues are then subtracted ($367/oz) to get to the AISC of $643/oz.
Using spot copper prices today, I (think) the AISC would be around $600/oz. So right now, a per oz. margin for the mine of $1,208.
The above would be based on the 0.56% copper grade, agree that the early production higher grades will materially reduce the AISC. Add in the gold and copper macro / supply situation and..wow ;)
Happy to be corrected on the above, just grabbing the figures from the GGP presentation schematics.
On the topic of copper, SD keeps hammering this point home - the copper is what makes this world class.
Look at the incredible grades and recovery rate at Brucejack (Pretium), yet they still float above a $900 AISC. If HAV had the same PFS gold grades but zero copper, it likely costs over $1,100/oz to get the HIGH GRADE out of the ground. But we do, hence a world class $643 AISC (and that is using a discounted copper price!).
Think about all those lovely long intercepts 2.0, 3.0, 5.0 g/t. Think about the copper within those intercepts, 0.2%….0.8%…etc.
With that in mind, consider that Newcrests Cadia mine in 2021 (Sept quarter report) had an average gold grade of 0.95 g/t (yes, less than 1.0) and 0.4% copper. The Cadia AISC was negative $109 :) That’s correct, they made $1,905 per ounce produced….which sounds like more than the price of gold, eh. In June 2022 quarter the Cadia AISC was negative $377 and they made $2,157/oz margin…
This is the direction Havieron is heading over time and with increased volume, and Newcrest know it (though perhaps they didn’t know it would include another high grade zone in the eastern breccia). This is why the goblins try to scare you with the capex for a bulk mine.
Copper (economics), shape, size - in that order.
Star, I’ll take that approach for the 5% if they really want to talk of what is there, I.e. 20m oz at a minimum. That only includes the new HGZ at HAD 104, not Zipa or any other inevitable growth within the tenement. 3 years, and we still can’t find a boundary..
5% of:
3m reserve/indicated ounces at $750/oz
5m inferred at $375/oz
12m at $175/oz
They’re still getting a free 5m+ oz, we have no choice so we can take the circa $300m above plus a Coke and Mars bar, done deal.
Remaining 25% and GGP is $2.5b if they want it now; if they don’t want us around long term, do they really want us sitting on 25% of a known 25-40m oz deposit over the next two years, clearly heading in the direction of ultra low AISC Cadia model? Do NCM want to risk us striking at Scally or other tenements with our new found cash, or continuing Ernest Giles with their competition?
Reckon they could get a 48p - 52p offer to a vote. Surely they see Havieron, Brucejack and Cadia as unmatched world class core assets over the next 30 years for NCM, in that order. I don’t wanna be taken out, but after Pretium I can’t find a reason why NCM won’t.
Aqua,
The 5% deal will not reflect what GGP is worth.
It will reflect an absolute baseline for the value of one asset, calculated via some limiting parameters and in no way representative of what a third party would have to pay for the remaining 25%…of that one asset.
Thing is, this ‘absolute baseline’ will still be well in excess of the current market cap.
SAS, unfortunately with this 5% we don’t have that luxury. It was part of the original JV, for NCM to get a further piece of Hav valued at a point in time. View it as a benefit for NCM (a discount), and a benefit for us (funding, liquidity).
What we do have is an AISC guidance showing how economic the starter mine will be, some excellent infill drilling with hopefully a few million indicated ounces in MRE2, and some incredible growth results (HAD 104 cannot be ignored).
We were always going to have to let go of this 5% - NCM want it, view that as a positive. If we get a couple hundred million, this company is transformed - clear path to mining, growing other assets, new JVs…whatever we want.
As for the remaining 25%…skys the limit. If anyone wants to attempt to take us out at a lowball 35p, they better move quick as that ship is sailing. There’s more HAD 104s coming.
Hi Pete,
Agree with several of your points, but let’s keep going. If NCM are buying 500,000 ounces (many being in the HGZ), how much are they going to pay per oz?
We’ve already paid some capex for said 5%, and our AISC is estimated to be over $200 less than Brucejack (Pretium) AISC.