Member Info for thelearner

The typical costs of a feasibility study are 0.5 to 1.5% of the total project cost. So assume worst case 1.5% - project cost of $1.3 billion US before the feasibility study gets past $20 million US.
Also - the pre-feasibility study - due by end of Stage 3 at NC cost, will have rough project costs and outlines. So we will know the range of cost of the feasibility study then.
NC will have plenty of prior data and a very good idea of what the cost will be for the decline, the thing that will be hardest to decide is how to get the ore to Telfer, and they really cannot do this properly without a pretty good idea of MRE, they know the capacity of Telfer, so they can work out mine life in years. It could be trucked, or they could look at rail and someone much earlier mentioned large mechanical conveyor belt type machinery.

Newcrest recently built and expanded the Cadia mine in Australia. This is like a Telfer expansion. They are very good with costs too - see 2018 article below
https://www.australianmining.com.au/news/newcrest-cuts-cost-cadia-plant-expansion-80/

Telfer AISC is high due to low grades now at Telfer - so i fHav is very high grade - and it certainly looks like that from the drilling results - will mean low AISC for the Hav ore - if we are toll mining - our AISC share for Hav will be lower.

I too think GGP will sell HAV to NC - but only at a fair valuation, and with a pretty accurate MRE - if still open at depth and to NW - would be crazy to sell unless there was an additional payment if the MRE increased. I also think a clever JV for Scally would be the best option - I agree if we can stay with a known partner - fine - but no harm in getting offers - a little competition would be good for GGP.

Ipad - this is the link to the RNS on the JV - from GGP website
https://polaris.brighterir.com/public/greatland_gold/news/rns/story/xp4py3x
Read down to "Terms Of The Farm In Agreement" then keep going down to just under (Additional Farm In) - it is quite clear there to me

"Expenditure incurred in connection with the Feasibility Study that is in excess of US$20 million shall be funded by the Parties in proportion to their respective Participating Interests in the Joint Venture at the relevant time the Feasibility Study is delivered, in accordance with the terms of the Joint Venture Agreement."

GGP will have the cash required - if any is required - it's not like there is an ore processing plant to build - there is one at Telfer.

Ipad - GGP purchased HAV from - Pacific Trends Resources Pty Ltd - according to the press release.
The timeline is not important at all with T&C's - only would have came into play if NC did not meet the time targets - does not change the obligations GGP have to contribute their share (40%) of Feasibility study costs in excess of $20 million US. I'd imagine they have to agree to the spend though, but could not stall stage 4 to keep NC from completing - the full agreement will cover everything legally.

Completely agree with you if there is any JV at Scally - the success of HAV makes GGP negotiating position very strong - and I'd like to see % share given away tied to size of MRE - the bigger the MRE - the lower the % gained for the spend.

Oil business is where I am familiar. Partnerships are very common - and done to spread risk. But to spread risk you have to also be prepared to give away part of the potential profits. Not unusual for project CAPEX spend to be over budget, so not owning 100% spread's risk. During operation - should any unforseen problems occur - huge cost increases are shared between the partners - so again about managing risk - versus reward.
Having partners though also makes management much more complex - depending on amount of partners and share - as partner agreement is needed for all aspects of the operation.

GGP 30% share - after feasibility study, NC will have a better idea of minimum MRE, project costs to get to production, expected OPEX costs, and expected AISC and potential profits. GGP will be liable for 30% of CAPEX then OPEX.
So it will be a judgement call by NC - at any time - they could try and buy GGP company whole, make an offer to buyout stake in HAV, or to buy their Paterson licenses.
The project is now largely derisked - but that means the purchase price increases. As the MRE grows - so does the purchase price.
Buying the whole company might be harder than making an offer for HAV 30%. At the end of the JV/Farm-In - somebody else might make an offer to buy GGP's remaining share if NC have not bought it.

Interesting times ahead.

Ipad - do you have a link to the JV on the GGP website - the page I find has highlights - as has the RNS - but in the RNS it clearly states GGP's cost liability during stage 4 - which is $20 million spend - not $25 million as I stated earlier. (total spend during JV $65 million

I was looking through the GGP document archive - the original purchase in 2016 of Haverion is interesting - $25,000 AUS plus 65.5 million shares - wonder if they held the shares or sold them
https://greatlandgold.com/acquisition-of-havieron-project/

schlemiel - there is no OPEX yet - that only comes when production starts - until then everything is CAPEX - well that's what I am used to in the black gold industry - so would be total CAPEX spend.

Ipad - this is the JV RNS Highlights.
Stage - 3 - NC are working towards end of Stage 3 - they must spend $25 million (easy) and produce a pre-feasibility study - all at Newcrest's costs. GGP have no cost liability.
Stage 4 - another $25 mill to be spent by Newcrest, and a Feasibility Study must be produced. If the cost of the feasibility study exceeds $20million US, GGP would be liable to pay their % of these costs - which would be 40% as NC at this stage will own 60%.

At the end of stage 4 - NC have the option to increase to 75% buy purchasing 5% at fair market value - for a period of 12 months.
However - at the end of the farm in period, NC lose the right of first refusal on the GGP Paterson licences. That's how I read the RNS.

"Right of First Refusal: If Greatland receives a bona fide offer from a third party purchaser to farm-in or otherwise acquire all or part of its right, title and interest in the Remainder Tenements, the Company must first make an offer on the same terms to Newcrest. The right of first refusal will only apply and be binding on the parties (a) in respect of any area of Tenement E45/4701, during the Farm-In Period and for the term of the Joint Venture Agreement; and (b) in respect of Tenements E45/4512 and E45/4928, for the duration of the Farm-In Period."

"(Additional Farm-in) within a period of 12 months from the date following satisfaction of the Stage 4 Commitment (Additional Period), Newcrest shall have an option exercisable by written notice to the Company for it or its related body corporate nominee to acquire an additional 5% Farm-in Interest at fair market value."

Link to RNS https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/GGP/13998113.html

GLA - Hold for gold.

Just the opposite for me - I am going to continue holding - not selling anything. I always thought would be at least end of year before we saw true scale of this - if anything now - it's so big it will take longer to get an accurate MRE, we will get an initial one 2nd half of this year.

Let the short termers sell up and move on - they will come back later - I am prepared to wait for even more super returns on this share.

I have been on board for a while and delighted with today's news. I topped up when we were down at 20p area, reducing my average to around about today's price - having previously bought in the 70p area.

I just want to see a good outcome not only for all the LTH, but also for Mark Childs, Jim Mellon & Co.
I think toll mining deal would be good to generate early revenue if we could strike a good deal.
Also the next set of permits would also be great.

With this one, and GGP, and even my Canadian goldie NSUP almost back at my break even point - gold looking promising. Hopefully patience will be rewarded!

GLA

JerrySpaniel - I do sometimes listen to that when I have time - Sprott is an investor in the company I mentioned.
It recently was bought into by Michael Gentiles - financial specialist backed by Gord Morrison's - geoligist - but I have never really found a decent discussion board - like this one - with people talking about the company and where they are up to. Should keep more in touch with my former colleague - but there are many other time constraints - including here - which is much more important to me.
Thanks for the tip though.

Spy - I am invested in a Canadian junior explorer - thought I was going to lose heavily - but the SP is now going in the right direction - a former colleague of mine owns about 3% of the company. There are quite a lot of gold experts in Canada and heavy investment in gold miners and explorers.
Have thought about selling up on this one and putting money in here - but the SP has came back a little too late. NSUP. Also when I bought HL could trade online - now by phone only after NSUP changed their UK broker - was held out of being able to trade for months.
Hope you are getting good info from your mate - I'd ask to go on the mailing list - but if it was me I'd be careful about distributing rumours to strangers - unless it is purely expert opinion - with no insider knowledge.

All the best - holding for gold. GLA

Just did what I said I was not going to do - topped up 5K @ 7.434p. Have not sold any - my end of year target was 10p. April 30th report might see it come sooner. This 5K I might be willing to trade if share price increases significantly. It was going into oil for recovery, or CNR for gold - but I have plenty oil shares - don't want to look at them!

Newcrest have not stolen anything. They entered a deal - where they committed to spend a significant amount of exploration spend - in stages - the staging allowing them to back out if drilling results were not good - and to keep going and gain a large % share of a good asset for their company - they were realistically committing at least $20 million - with a $65m spend gaining 70% on the licence blocks.

GGP also gained - they did not have the money to do that exploration - so were also giving up a % of the licence to derisk and get the exploration drilling and feasibility studies done for nothing. Explo companies do this a lot - JV and give up a large chunk to make the small chunk left increase in value by multiples.

Now it looks like it will be the deal of the century for Newcrest - already - let alone if it is even bigger than 10m oz. Been very good deal for GGP also.

GGP because of this will be in much stronger position when negotiating JV's for the rest of the Paterson blocks. Now GGP take a risk by sinking drills in Scally - if initail drills are not good - harder to get a JV on good terms - however if they sink some drills with HAV style results - will be in very strong position to negotiate JV.

GLA - nothing will happen quick enough here for the traders - ignore them - take a profit if you wish. Personally I am holding. 30th April - cannot wait to see the latest results. My target for end of year was 10p. Anything else bonus. Currently - I am very optimistic.

Newcrest may be 3 months ahead of shareholders, but they are not ahead of GH and GGP. As part of the JV, GGP have someone on the management committee - and although it's a while since I read the JV in detail, I am certain that the drilling info is made available to this management committee or board, including the GGP rep.
I don't have time to go and read it again just now - but pretty confident in my memory.

Thanks for the replies folks - the HL link did not work - but found this article which looks good
https://www.onlinemoneyadvisor.co.uk/pensions/sipps/sipp-death/#whosi
Not really my problem - but it says if the beneficiaries receive the SIPP income more than 2 years after you die - instead of the 55% tax rate - it is taxed at their income tax rates.

Anyway - if GGP develops as I hope - will have lot's of nice options!
I have a good pension, but my better half has virtually no pension - I'd have preferred the option to combine lifetime allowances, but hey ho - I realise I am still very fortunate.

GLA with GGP - Oldtimer - I like your posts - but hope you are way off the mark with NC takeover - just cannot see it myself at that price - all depends on MRE. I can see them trying, but GH has all the drilling info they have, and they do not need to sell the remaining 25% to NC - NC have first refusal.

Somewhatgullible - do you know what happens to the SIPP if it is left in place and passed on to surviving relatives in terms of taxation.
I have a very good DB pension - but had a small £18K DC when i took my pension, liable to the 55% charge. Luckily I put 13k of it into GGP, have 782,000 shares in the SIPP. The other 5K I have a whopping loss in though with SML!
My initial aim was to grow the 18K to an amount large enough to cover the tax - then cash it in, but I have exceeded that already - worth 51K, and am not selling GGP in the immediate future. I might not ever touch this SIPP and just leave it to grow.

Corradus - do not think we should be using current Telfer AISC - Telfer AISC has increased due to low grade feed, and is reported annually and impacted by things like maint shutdowns. I beleive part of the feasibility study will be to calculate a new AISC over the future life of the mine once the know Hav MRE and grades.
From memory - Cadia AISC is very low - think it was under $200. It's in the last annual report.

From Wikipedia
Telfer production was suspended in 2000 due to high operating costs when they were only doing open cut mining.
In 2002, Newcrest Mining announced a new redevelopment project worth $1 billion, after discovering new mineral areas and a reserve base of some 19 million troy ounces of gold and 640,000 tonnes (710,000 short tons) of copper. The redevelopment expanded underground mining areas, deepened open pits, constructed a processing plant and power station, and built a new gas supply line from Port Hedland.
The Telfer mine is not connected to the Western Australian power grid but instead produces its own power from natural gas via a 450 km purpose built pipeline. The power station on site is able to produce 138 MW of power. The focus changed from open pit mining to underground mining, and Telfer became one of Australia's largest gold mines, second only to Kalgoorlie's Super Pit.
The mine reopened in November 2004, after commissioning of the processing plant and, initially as an open cut mine, from March 2006 also with an underground operation.
In January 2008, Newcrest Mining lowered the mine's annual gold output targets. Newcrest said, "At Telfer, mechanical availability of the open pit mining fleet and the processing of harder ores are impacting the expected production profile for the full year.
As of 2016, the forecast mine life for Telfer is 2021 for the underground operations and 2018 for the open pit operations. Mining is carried out at the Main Dome open pit and the underground operations below. The West Dome pit is being mined again.

I think the Wikipedia entries show why Newcrest are in such a hurry to develop Hav.

Can buy easily on HL at 6.5p - I am not topping up any more here - think it is sound investment - but trying to adhere to not putting all eggs in one basket - maybe looking for some other shares with good potential

Some good posts - Chippy - good post.
NC have already got 70% for a very low price. I agree - like any other business - they will want to get the other 30% for as little a price as possible.
Once they complete the JV - they are in the driving seat anyway and can call all the shots with the development. GGP have to then provide their share of the development costs.
NC can but another 5% at "fair value" - that will be the interesting bit - GH has options then - he can hold the other 25% and go mining in the long term, or he can sell it to NC - if the price is right. He can also sell it to anyone else who is interested - NC may have first refusal on our licences for this region, but only if they meet the asking price.

I think GGP is worth much more than 10p. I would not mind a JV on Scally - but the terms would have to be much better than the HAV terms - and this could also be a negotiating tool if NC want it badly.

If I was NC - i'd really like to buy up all of GGP - and secure GH and his team on a lucrative deal to work for NC for minimum 5 years, heading up their exploration arm.

I have never been asked to vote on any shareholders meetings on shares I hold in my HL ISA's.