Greatland Gold Regulatory News (GGP)

Greatland Gold plc (AIM: GGP)

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NEWS RELEASE | 6 November 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK MARKET ABUSE REGULATIONS. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Greatland Gold plc (AIM:GGP), a mining development and exploration company with a focus on precious and base metals, announces its audited financial results for the year ended 30 June 2023. 

Corporate highlights

§ Retained 30% ownership of Havieron at the conclusion of the 5% option process provided for in the Havieron Joint Venture Agreement, an outcome that delivers substantial value to Greatland shareholders

§ Strengthened the Board with the appointments of Mark Barnaba (Non-Executive Chairman), Elizabeth Gaines (Non-Executive Deputy Chair), Jimmy Wilson (Executive Director) and Yasmin Broughton (Non-Executive Director).

§ Successfully completed equity raisings of £63.3 million, including £33.5 million cornerstone investment by Wyloo (which currently holds 8.45% of the Company's shares)

§ Letter of Support signed with ANZ, HSBC and ING for Havieron, supporting a A$220 million seven-year syndicated debt and associated hedging facilities and subsequent to year end

§ Executed a A$50 million unsecured standby loan facility (Standby Facility) with Wyloo Metals (Wyloo)

Portfolio highlights

§ Continued the expedited development of the underground decline at Havieron, in parallel with the Feasibility Study that continues to progress well, assessing several value enhancing options to maximise value and derisk the project

§ Entered into a farm-in and joint venture agreement with Rio Tinto Exploration to explore more than 1,500km2 of highly prospective tenure near Havieron; commenced drilling within one month

§ Signed a landmark land access agreement for the Ernest Giles project; awarded a drilling grant under the Government of Western Australia's Exploration Incentive Scheme

§ Continued to advance exploration at our tenements in the Paterson, in particular Scallywag

§ At the Juri Joint Venture, a second exploration programme commenced in May 2022 with encouraging assay results

Greatland Managing Director, Shaun Day, commented: "This year has seen Greatland continue to make significant progress towards the development of our world-class mining asset, Havieron. Progress at Havieron has been impressive, bringing us closer to the top of the Havieron ore body. In addition to our flagship project, there has been exploration advancement across our portfolio, which we believe provides excellent optionality and prospectivity in addition to Havieron. 

"We have significantly enhanced our corporate position by securing both equity and debt financing, and in particular the strategic cornerstone equity investment from Wyloo. We are now well positioned to make the most of all value generative opportunities as and when they become available."

"Over the past year, the Greatland team has successfully continued to establish our growth platform, and we are eager to continue building on it in the coming year. The joint venture agreement with Rio Tinto Exploration is a great example of the strides we have taken, and we are excited about the opportunity presented by our Paterson South farm-in."

Publication of Annual Report

The 2023 Annual Report is available for download on our website at https://greatlandgold.com/investors/results/ and will be mailed out to registered shareholders.

Contact

For further information, please contact:

Greatland Gold plc

Shaun Day, Managing Director | info@greatlandgold.com

Nominated Adviser

SPARK Advisory Partners

Andrew Emmott / James Keeshan / Neil Baldwin | +44 203 368 3550

Corporate Brokers

Berenberg | Matthew Armitt / Jennifer Lee | +44 203 368 3550

Canaccord Genuity | James Asensio / George Grainger | +44 207 523 8000

SI Capital Limited | Nick Emerson / Sam Lomanto | +44 148 341 3500

Media Relations

UK - Gracechurch Group | Harry Chathli / Alexis Gore / Henry Gamble | +44 204 582 3500

Australia - Fivemark Partners | Michael Vaughan | +61 422 602 720

About Greatland

Greatland is a mining development and exploration company focused primarily on precious and base metals.

The Company's flagship asset is the world-class Havieron gold-copper project in the Paterson Province of Western Australia, discovered by Greatland and presently under development in joint venture with ASX gold major, Newcrest Mining Limited (which is the subject of an agreed takeover by Newmont Corporation that is ongoing).

Havieron is located approximately 45km east of Newcrest's existing Telfer gold mine. The box cut and decline to the Havieron orebody commenced in February 2021. Significant progress continues with the exploration decline with total development at over 2,820  metres in October 2023. Subject to a positive feasibility study and Decision to Mine, Havieron may leverage the existing Telfer infrastructure and processing plant.

Greatland has a proven track record of discovery and exploration success and is pursuing the next generation of tier-one mineral deposits by applying advanced exploration techniques in under-explored regions. Greatland has a number of exploration projects across Western Australia and in parallel to the development of Havieron is focused on becoming a multi-commodity miner of significant scale.

Chairman's Statement

I am pleased to present my inaugural Chairman's Statement for Greatland Gold plc (Company) and its consolidated group (Greatland or the Group). Together with my fellow Directors, I would like to acknowledge what has been another strong year of growth and achievement for Greatland. This progress continues to position Greatland as one of the mining industry's most exciting growth stories.

The past year has been an important period for Greatland. Our flagship asset, the world-class Havieron gold-copper project in the Paterson region of Western Australia, is being advanced under a joint venture with Newcrest Mining Limited (Newcrest; ASX:NCM, currently in the process of an agreed takeover by Newmont Corporation (NYSE:NEM)).

Mine development towards the Havieron orebody progressed well throughout the year, with total development now in excess of 2,820 metres including over 2,030 metres of advance in the main access decline as of October 2023. With over 300,000 metres of exploration and development drilling completed, our most recent drilling improves our understanding of the South East Crescent which extends for more than 1,100 metres. Particularly encouraging is confirmation of continuous mineralisation through the link zone which connects the South East Crescent with the Eastern Breccia and the Havieron team is focused on incorporating these results into the optimised Feasibility Study together with several value enhancing options to maximise value and further derisk the project.

In addition to Havieron, Greatland holds a significant portfolio of precious and base metals focused exploration tenements in Western Australia, one of the world's premier mining jurisdictions, which collectively cover an area of approximately 5,000km², including nearly 3,000km² in the Paterson region. Excitingly, we believe we may have only scratched the surface of the exploration potential within our tenements in the Paterson region. While the Havieron team continues to work hard to progress Havieron towards production, we have maintained our strong exploration momentum and moved swiftly to secure rights to the most prospective surrounding tenure. We are particularly excited about the opportunity presented by our Paterson South farm-in and joint venture arrangement with Rio Tinto Exploration Pty Ltd (RTX), a wholly owned subsidiary of Rio Tinto Limited (Rio Tinto; ASX:RIO), to accelerate exploration across over 1,500km² of highly prospective tenure in the Paterson. Greatland will be entitled to earn up to a 75% interest in the Paterson South tenements under a two-stage farm-in arrangement over seven years.

The Paterson South tenure is historically underexplored and hosts several magnetic anomalies with targets that we consider to be the closest to a Havieron lookalike within the Paterson region, as well as containing prospective Telfer style targets. Our partnership with RTX is a significant opportunity for us to leverage our existing presence in the region, our good standing within the Paterson community, and our strong technical knowledge fostered through the discovery of Havieron and other exploration. The rapid commencement of drilling on the tenements within four weeks of entering into the Paterson South farm-in and joint venture arrangement with RTX is testament to both the high quality of the targets and our drive to rapidly unlock greater value from our Paterson region exploration portfolio.

Elsewhere in the Paterson, drilling at Scallywag has returned the most encouraging results to date. At the A35 Prospect, pre-collar drilling intercepted gold mineralisation and important pathfinder geochemistry which is associated with the Havieron and Telfer gold-copper deposits. In addition, an intercept at the Pearl Prospect confirms the possibility of a new style of deposit being identified. The strong gold and copper mineralisation and supporting pathfinder geochemistry continues to highlight the outstanding prospectivity within our tenement package and the Paterson region in general. These results, together with our continual improvement in understanding of the covered basement geology, stratigraphy and structure, increases our confidence in the prospectivity of the region, and our ability to vector towards intrusion related and other styles of mineralised systems on our extensive ground holdings.

While the Paterson region has undoubtedly been our key focus for the year, we have also maintained activities across the other projects within our high-quality exploration portfolio that spans some of Australia's most exciting mineral regions. Leading this generative pipeline is our Ernest Giles project. Subsequent to year end, a landmark land access agreement was completed with the Manta Rirrtinya Native Title Holders, the first they have entered into since their native title determination in 2018. The agreement provides for the consent to the grant of tenure to, and land access by, Greatland over approximately 75% of the Ernest Giles project area. Diamond drill testing on the Meadows prospect is planned to commence in the 30 June 2024 financial year.

Greatland's most important priority is safety, keeping our employees, contractors and communities safe and well. Our first priorities are to operate with zero fatalities, reduce workplace injuries and prevent catastrophic events. Greatland achieved its goal of maintaining a safe workplace for all during the year. There were no fatalities at the Company's projects and the Total Recordable Injury Frequency Rate for the Company (fully owned or operated projects) was nil.

As Greatland continues its evolution from a junior explorer towards a leading mid-tier developer and producer, we have made substantial progress to support our next growth phase and aspirations through balance sheet strengthening, financing flexibility, increasing the depth and breadth of capabilities of our management team and enhancing our governance and sustainability credentials.

Fundamental to the acceleration in our development and exploration programmes is our ability to maintain our commercial discipline and financial strength. The Group's financial position was strengthened during the year with a combination of fundraises, including £29.7 million raised in August 2022 from institutional investors and a subsequent strategic cornerstone equity investment from Wyloo Consolidated Investments Pty Ltd (Wyloo) of A$60 million (c.£33.5 million) in October 2022, with an additional future potential equity contribution of £35 million. Wyloo currently holds approximately 8.5% of Greatland shares on issue. It is my pleasure to welcome our new shareholders.

Furthermore, in May 2023, Greatland received a signed Letter of Support from its banking syndicate expressing their support and interest in the provision of A$220 million seven-year syndicated debt and associated hedging facilities and subsequent to year end, we executed a A$50 million unsecured standby loan facility (Standby Facility) with Wyloo. We appreciate Wyloo's continued support. The Letter of Support, Standby Facility and continued backing of high-quality institutions strengthen our financial position and provides funding optionality prior to finalisation of the Havieron Feasibility Study as the underground decline approaches the top of the Havieron gold-copper orebody.

During the year, we significantly increased the depth and breadth of our capabilities across mining operations, project development, strategy, investor relations and governance. In addition to my own appointment, we enhanced our Board experience with the transformational appointments of Elizabeth Gaines, former Fortescue Metals Group Ltd (Fortescue) CEO and Managing Director, as Non-Executive Director; James 'Jimmy' Wilson, a former senior executive at BHP whose roles included President of its iron ore division, as Executive Director; and Yasmin Broughton, a qualified lawyer with significant experience as a Non-Executive Director across a diverse range of industries with a particular focus on natural resources, as an Independent Non-Executive Director.

From a corporate perspective, Greatland significantly progressed our proposed cross-listing on the Australian Securities Exchange (ASX) during the year. Our objective is to undertake an ASX cross-listing in a manner and at a time that delivers an optimised outcome for the Company and its existing shareholders. Subsequent to year end in September, having regard to the ASX listing timetable and upcoming activities and opportunities for the business, we decided to defer the ASX cross-listing until 2024. Greatland will continue to support the early works development of Havieron and will complete and announce an updated Mineral Resource Estimate (MRE) which is targeted for the December quarter 2023. Greatland remains committed to listing on the ASX at the appropriate time. The work undertaken by the Company this year provides a strong foundation to efficiently resume and complete the ASX listing process.

We understand that our stakeholders expect us to operate in a sustainable, responsible and transparent manner that respects all people and the environment. We recognise that sustainability is a journey and that investors and financial institutions are increasingly assessing companies based on their Environmental, Social and Governance (ESG) performance, with the range of issues and expectations continuing to grow and evolve over time. Our achievements in this area and our ambitions for the future are reflected in our second dedicated Sustainability Report.

I would like to extend my gratitude to my fellow Directors and the entire Greatland team for their support, dedication and hard work during 2023. In particular, I thank Alex Borrelli for his Chairmanship of Greatland for the five years prior to my appointment, a period of tremendous success. Alex's stewardship of the Company during this period was commendable and he remains a valuable contributor to the Board. I also thank our Managing Director, Shaun Day, for his leadership of our exceptional management team through another important year in Greatland's continued development.

This past year has laid the foundation and I believe this next chapter for Greatland is only just the beginning. We have a busy exploration and development program with a number of key catalysts for growth and I look forward to the year ahead.

Finally, I would also like to thank our shareholders for their continued support and I look forward to bringing you further updates as we embark on another exciting year.

Mark Barnaba

Chairman

5 November 2023

Strategic Report

The Managing Director presents the strategic report on the Group for the year ended 30 June 2023.

Principal activities, strategies and business model

The principal activity of the Group is to explore for and develop precious and base metal assets. The Group aspires to become a profitable multi-mine resources company by focusing on the responsible and sustainable discovery, development, extraction, processing and sale of precious and base metals.

Greatland has a clear strategy to achieve this growth which is built on three pillars:

(1) Continued advancement of the world class Havieron gold-copper project through to production.

(2) Exploration to identify new precious and base metals deposits with a particular focus on the highly prospective Paterson region of Western Australia.

(3) Disciplined assessment and, where compelling, pursuit of new investment and acquisition opportunities in the resources sector.

Greatland's strategy and business model is developed by the Managing Director and approved by the Board. The Managing Director reports to the Board and is responsible for implementing the Group's strategy and operating its business, with the leadership team.

Corporate

On 14 July 2022, the Company announced it had successfully renegotiated the contingent consideration due under the original 2016 Havieron acquisition. The Company agreed with the vendor a two-year restriction on dealing with the Greatland shares to be issued and a reduction of 4.5% in the number of Greatland shares to be issued, a saving of over 6.5 million shares. This reflected the vendor's support for the Company and conviction in the Havieron project.

The Company then announced the successful conclusion of the Havieron Joint Venture 5% option process, with the Company retaining its 30% interest in Havieron. This was a key objective for the Group and an excellent outcome.

In August 2022, the Group's financial position was strengthened by a successful placing of new shares. The fundraise experienced strong demand and was oversubscribed, with total gross proceeds raised of £29.7 million at a price of 8.2 pence per share. The equity raising enabled the Company to add a significant institutional presence to our share registry, reflecting the evolution of our business.

Shortly afterwards in October 2022, the Group's financial position was further strengthened through a strategic equity investment from Wyloo of A$60 million (c.£33.5m) at an AUD equivalent price of 8.2 pence per share, with the potential for a further equity contribution of £35m (if warrants exercisable at 10.0 pence per share that were granted as part of the transaction are exercised). The Wyloo investment was strongly supported by shareholders at a general meeting in October 2022 which approved the transaction.

On 30 May 2023, the Company announced that it had received a signed non-legally binding Letter of Support from a syndicate of banks comprising of Australia and New Zealand Banking Group Limited, HSBC Bank and ING Bank (Australia) (together, the Banking Syndicate). The Letter of Support provides that the Banking Syndicate are fully supportive and interested in the provision of A$220 million seven-year syndicated debt and associated hedging facilities.

Greatland advanced its preparations for a proposed cross-listing on the ASX, with significant progress made during the year. Subsequent to year end, having regard to the listing timetable and activities and opportunities for the business, Greatland decided to defer the ASX cross-listing until 2024. Greatland remains committed to listing on the ASX at the appropriate time and is well positioned by the work undertaken this year to efficiently resume and complete the ASX listing process.

Havieron, Western Australia (Greatland: 30%)

During the year, decline development continued to progress with total development at Havieron having reached in excess of 2,820 metres including over 2,030 metres of advance in the main access decline (as of October 2023).

Throughout the year exploration drilling continued at Havieron, with a focus on infilling the South East Crescent below the 4200mRL, continued evaluation of the Eastern Breccia along with continuing to assess the mineral system at depth.

The aim of the South East Crescent drilling was to improve the understanding and confidence in the lower South East Crescent Resource so that it may potentially be included in an updated mine design and subsequent Ore Reserve update. This infill drill program was completed in May 2023.

Last year's March 2022 Mineral Resource Estimate represented the first time Resources were defined within the Eastern Breccia, as a result of successful drilling during 2021. Since this time drilling has continued, focusing on defining the extent of the Eastern Breccia, expanding the known mineralisation and achieving an appropriate spacing of drilling to provide the confidence required to support classified material as Mineral Resource.

Newcrest Operations is required to prepare a Havieron Feasibility Study before a Decision to Mine can be made. Preparation of the Feasibility Study is ongoing and has been extended to further assess several value enhancing options to maximise value and derisk the project. 

Paterson South Farm-In and Joint Venture Arrangement, Western Australia (Greatland earning up to 75%)

In late June 2023, Greatland commenced its maiden exploration drilling campaign at the Paterson South Tenements to test the Stingray and Decka targets. The Stingray target is a magnetic anomaly 10km along strike north-northwest of the Havieron magnetic anomaly, itself associated with mineralisation. The Decka target is a basement magnetic and conductive anomaly 20km northwest of Havieron. Both targets show consistent periodicity in that Stingray is approximately 10km from Havieron and Decka is approximately 10km from Stingray on the same trend, which may indicate a consistent paragenesis for all three anomalies. In addition, both targets are also modelled within 250 metres of surface, making them shallower than Havieron.

The rapid commencement of drilling on the Paterson South Tenements within four weeks of entering into the Paterson South farm-in and joint venture arrangement is testament to both the high quality of the targets and Greatland's drive to rapidly unlock greater value from its Paterson region exploration portfolio. Greatland is currently reviewing historic work across the remainder of the +1,500km² Paterson South Tenements and developing access to several other tenements to allow on-ground work to commence as statutory and heritage approvals are obtained.

Juri, Western Australia (Greatland: 49%)

Following an initial drilling programme which commenced in April 2021, a second exploration programme commenced in May 2022. Five additional holes were drilled for a total of 2,086 metres to test three targets comprising of two holes each at the Tama and A9 targets on Paterson Range East and one hole at the Black Hills North / A27 target on Black Hills. Black Hills drill hole BHRD004 intersected anomalous gold mineralisation with Bismuth geochemistry. Bismuth is associated with higher-grade gold intersections in the hole, similar to the relationship observed at Havieron. Surface sampling identified low tenor but coherent anomalism around the CAW10-A7 prospect at Paterson Range East.

Mineralisation in drill hole BHRD004 is interpreted by Greatland to sit within a lithological unit near the prospective Telfer Formation contact with the Malu, known to host the mineralisation at Telfer.

Prior to year end, Newcrest elected to assume management of the Juri Joint Venture. Greatland and Newcrest are two of the largest landholders in the Paterson region. Our partnerships at Havieron and Juri are central to unlocking the full potential of the Paterson region and we remain very excited about the prospectivity of the Juri Joint Venture tenure. Importantly, the shift of Juri Joint Venture management to Newcrest provides our exploration team the opportunity to put greater focus on our portfolio of highly prospective 100% owned tenure, together with our responsibilities as the new manager of the Paterson South farm-in and joint venture arrangement with RTX.

Exploration, Western Australia (Greatland: 100%)

Greater Paterson

During the year, a third drilling programme was conducted at the Scallywag licence to further test ground electromagnetic conductors for Telfer style mineralisation at the Pearl, Swan and Swan East targets. A specialised reverse circulation rig was used to drill pre-collars ahead of completing the holes with a diamond drill rig with the aim of improving result turnarounds. A total of eight reverse circulation pre-collar holes for 1,238 metres and one diamond hole with a total depth of 489 metres, for a total of 1,727 metres, were completed. 

The diamond drill hole (PDD003) returned promising anomalous gold, copper, silver and bismuth in the drill hole, while one of the pre-collars (A35RD001) intersected anomalous gold over 2 metres near surface from 69 metres downhole.

At the Rudall tenement, a single diamond hole, which was co-funded by the Government of Western Australia's Exploration Incentive Scheme, was drilled to test the Ramses magnetic anomaly to a total depth of 943 metres. The results of this drilling included 18.25 metres at 22.0g/t Au from 924 metres to the end of hole at 942.25, including 1 metre at 393g/t Au from 926 metres (see RNS announcement titled "Rudall Exploration Results" dated 20 April 2023 for further information). Structural and geochemical work and a future downhole electromagnetic survey is planned in the second half of the 2023 calendar year to refine the potential for mineralisation to extend into shallower positions within the system.

At Canning, Greatland has completed a heritage exclusion survey allowing access for a magneto telluric survey. The survey will identify any conductive response associated with the magnetic anomaly and the depth of cover over it.

Ernest Giles

In October 2022, Greatland was awarded a drilling grant for Ernest Giles under the Government of Western Australia's Exploration Incentive Scheme. Greatland continued positive ongoing Native Title land access agreement negotiations with Traditional Owners during the year and subsequent to year end, a landmark land access agreement with the Manta Rirrtinya Native Title Holders was entered into, the first since their native title determination in 2018. The agreement provides for the consent to the grant of tenure to, and land access by, Greatland over approximately 75% of the Ernest Giles project area. Diamond drill testing on the Meadows prospect will commence during the 30 June 2024 financial year.

Panorama

Greatland has conducted a detailed review of historic work and carried out soil and rock chip sampling which has identified multiple gold anomalies. The most significant samples identified to date lie along a north-south trending zone approximately 3.2km long. The geological setting is a prominent ridge marking the structural contact of basaltic and ultramafic rocks of Archean age. Field reconnaissance along this zone has since been completed and visual indications of mineralisation are present. A programme of surface geology mapping and soil sampling has been planned for nine distinct areas, encompassing targets from the airborne electromagnetic survey previously completed. 

Bromus

During the year, Greatland finalised a heritage agreement with the Native Title Holders, the Ngadju Native Aboriginal Corporation as trustee for and representative of the Ngadju people. The heritage agreement provides the protocol for carrying out heritage surveys and for the monitoring of certain works.

Firetower and Warrentinna, Tasmania

In November 2022, Greatland entered into an agreement with Flynn Gold Ltd (ASX:FG1) (Flynn Gold), under which Flynn Gold had the option to purchase Greatland's Firetower and Warrentinna tenements. Greatland was paid A$100,000 by Flynn Gold (satisfied by the issue of Flynn Gold shares) in respect of this option, which was exercisable no later than 30 June 2023. Flynn Gold exercised this option in June 2023. The consideration for the purchase consisted of:

(a) Initial consideration: A$200,000 (satisfied by the issue of 2,000,000 Flynn Gold shares at a deemed issue price of A$0.10 per Flynn Gold share); and

(b) Deferred Consideration:

(i) A$500,000 upon the definition of a JORC-compliant Mineral Resource of at least 500,000 ounces of gold in aggregate within one or both tenements (payable in cash or Flynn Gold shares, at Flynn Gold's election);

(ii) A$500,000 upon the issue of a permit to mine by Mineral Resources Tasmania in respect of any part of the tenements (payable in cash or Flynn Gold shares, at Flynn Gold's election); and

(iii) a 1% Net Smelter Royalty payable to Greatland in respect of any production from the tenements.

Safety

Greatland's most important priority is safety. Greatland achieved its goal of maintaining a safe workplace with no fatalities at the Company's projects and nil Total Recordable Injury Frequency Rate for the Company (fully owned or operated projects) during the year.

Sustainability

On 30 June 2023, Greatland published its 2023 Sustainability Report, the second release of a dedicated Sustainability Report which follows Greatland's inaugural Sustainability Report which was released in May 2022. Greatland's 2023 Sustainability Report allows Greatland's stakeholders to obtain a better understanding of Greatland's approach to sustainability as Greatland continues on its journey of enhancing its approach to sustainability practices and reporting. A copy of Greatland's 2023 Sustainability Report can be found at: https://greatlandgold.com/sustainability.

Principal Risks and Uncertainties

Management of the business and the execution of the Board's strategy are subject to a number of key risks and uncertainties, our approach to managing these are detailed below:

Directors' Report

The Directors present their report on the consolidated entity (Greatland or the Group) consisting of the parent entity, Greatland Gold Plc (Company) and the entities it controlled at the end of the year ended 30 June 2023.

Directors

The Directors of Greatland in office during the year and until the date of this report, their qualifications, experience, other directorships held in listed companies, are as follows. 

Directors' Interests

The Directors' holdings of shares and options in the Company as at 30 June 2023 were as follows:

It is noted that:

§ On 1 October 2023, after the end of the financial year, Mr Borrelli exercised his remaining 19,000,000 options and sold 10,000,000 of the resulting shares to fund the associated exercise costs and tax liabilities, retaining the remaining 9,000,000 resulting shares.

§ On 24 September 2023, after the end of the financial year, Mr Latcham exercised his remaining 2,750,000 options and sold 2,050,000 of the resulting shares to fund the associated exercise costs and tax liabilities, retaining the remaining 700,000 resulting shares.

§ On 19 September 2023, after the end of the financial year, Mr Day was issued a further 72,700,000 options, 7,300,000 retention rights and 3,898,737 performance rights, as detailed in the Remuneration Report.

Principal activities

The principal activities of the Group during the year consisted of the early works development, feasibility study and exploration of the Havieron gold-copper project and the exploration and evaluation of mineral tenements in Australia.

Results and dividends

§ Closing cash position of £31.1 million (2022: £10.4 million)

§ Closing debt balance of £41.5 million (2022: £43.1 million)

§ Net assets of £52.5 million (2022: £5.7 million)

§ Havieron project costs capitalised of £23.4 million (2022: £21.2 million) during the year

§ Loss before finance items and share-based payments of £11.0 million (2022: £8.4 million); statutory loss of £21.1 million (2022: £11.4 million)

§ Exploration expense of £3.4 million (2022: £3.0 million) for the year

Going Concern

Greatland's principal activities include the development of Havieron. At 30 June 2023 the Group had net current assets of £35.4 million (2022: £14.8 million), with cash of £31.1 million (2022: £10.4 million) and advanced Havieron joint venture cash contributions of £12.6 million (2022: £8.4 million). 

In addition, as outlined in note 28 Greatland has access to a A$50 million (c. £26.3 million) undrawn standby loan facility with Wyloo.

If required, the Group has a number of options available to manage liquidity including:

§ significantly reduce expenditure on its own exploration programmes;

§ significantly reduce corporate costs;

§ raising additional funding through debt, equity or a combination of both, which the Group considers it has the ability to do, should it be required and has demonstrated an ability to do so in the past.

Having prepared forecasts for the next twelve months, based on current resources and assessing methods of obtaining additional finance, the Directors believe the Group has sufficient resources to meet its obligations.

Should the Group not achieve the matters set out above, there may be significant uncertainty about whether it will continue as a going concern and therefore whether it would be able to realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

Taking these matters into consideration, the Directors continue to adopt the going concern basis of accounting in the preparation of the financial statements. The financial statements do not include the adjustments that would be required should the going concern basis of preparation no longer be appropriate.

Likely developments and expected results

A review of the current and future development of the Group's business is given in the Strategic Report.

Risk Management

The Board considers risk assessment to be important in achieving its strategic objectives. There is a process of evaluation of performance targets through regular reviews by senior management to forecasts. Project milestones and timelines are regularly reviewed.

A risk register is maintained by the Company that identifies key risks in areas including corporate strategy, financial, staff, occupational health and safety, environmental and traditional owner engagement. The register is reviewed periodically and is updated as and when necessary, with all employees and directors being responsible for identifying, managing and mitigating risks.

Refer to the Annual Report for detailed information on the principal risks and uncertainties and for further detailed information on the financial risks refer to note 15.

Key performance indicators

The Board has defined the following Key Performance Indicators (KPIs) during the year to monitor and assess the performance of the Group as it advances from an exploration company into a resource development company. These KPIs apply to the FY23 Performance Rights, defined and described in the Remuneration Report, which have a three-year performance period from 1 July 2022 to 30 June 2025.

Share Capital

Information relating to shares issued during the year is given in note 14 to the accounts.

Substantial Shareholdings

On 30 June 2023 and 31 October 2023, the following were registered as being interested in 3% or more of the Company's ordinary share capital:

Additionally, the Company has been notified, in accordance with DTR 5 of the FCA's Disclosure and Transparency Rules, or is aware, of the following interests in its ordinary shares of shareholders with an interest of 3% or more of the Company's ordinary share capital:

Political donations

During the period there were no political donations (2022: nil).

Auditors

PKF Littlejohn LLP has served as the Company's auditors since 2020. The Directors will place a resolution before the annual general meeting to reappoint PKF Littlejohn LLP as auditors for the coming year.

PKF Littlejohn LLP has signified its willingness to continue in office as auditor.

Directors' Indemnity

The Company has maintained Directors' and Officers' insurance during the year. Such provisions remain in force at the date of this report.

Events after the reporting period

Standby loan facility executed

Subsequent to year end, the Company executed an unsecured A$50 million standby facility with Wyloo Consolidated Investments Pty Ltd (Wyloo). Drawdown is available to Greatland from 1 November 2023, with repayment required by the maturity date of 31 December 2024. The facility has a 3% upfront fee and 1% utilisation fee. Interest is charged at benchmark (Australian BBSY) plus a margin of 7.5% p.a. The debt was undrawn at the date of this report.

Grant of employee incentive options 

On 19 September 2023, Greatland granted 302,700,000 Co-Investment Options with an exercise price of £0.119, 31,100,000 Retention Rights and 13,306,047 FY23 Performance Rights at an exercise price of £0.001 to employees under the Company's employee share plan. Collectively the options and rights are an important element in the attraction and retention of individuals pivotal to Greatland's growth and their alignment with shareholder outcomes. Further details are included in the Annual Report.

Exercise of Options and Director Dealings

On 1 October 2023, Mr Borrelli, Non-Executive Director, exercised his remaining 14,000,000 options over ordinary shares at a price of £0.0028 per share, 2,500,000 options at £0.014 and 2,500,000 options at £0.02 per share for a total consideration of £124,200. Mr Borrelli retained 9,000,000 of the resulting shares and sold 10,000,000 of the resulting shares to fund the associated exercise cost and tax liabilities. Mr Borrelli's shareholding has now increased to 35,403,372 ordinary shares representing 0.70% of the total voting rights.

In addition, on 24 September 2023, Mr Latcham, Non-Executive Director, exercised 1,500,000 existing options over ordinary shares at a price of £0.025 per share and 1,250,000 at a price of £0.03 per share, for a total consideration of £75,000. Mr Latcham retained 700,000 of the resulting shares and sold 2,050,000 of the resulting shares to fund the associated exercise cost and tax liabilities. Mr Latcham's shareholding has now increased to 3,850,000 ordinary shares representing 0.08% of the total voting rights.

Newmont Corporation's acquisition of Newcrest Mining Limited becomes effective

On 18 October 2023, Newcrest, the ultimate parent company of Newcrest Operations which is the Joint Venture Manager of Havieron, announced that the scheme of arrangement under which Newcrest will be acquired by Newmont Corporation was legally effective. Implementation date is planned for 6 November 2023. For further updates refer to www.newmont.com. 

Streamlined energy and carbon reporting ("SECR")

Greenhouse gas emissions, energy consumption and energy efficiency disclosures have not been provided because the Company has consumed less than 40,000 kWh of energy during the period in the UK.

Corporate Governance

A corporate governance statement follows in the Annual Report.

Control Procedures

The Board has approved financial budgets and cash forecasts. In addition, it has implemented procedures to ensure compliance with accounting standards and effective reporting.

Environmental Responsibility

The Company is aware of the potential impact that its subsidiary companies and operations may have on the environment. The Company ensures that it and its subsidiaries at a minimum comply with the local regulatory requirements with regard to the environment.

Cultural awareness

The Company continues to engage with the traditional land owners to understand and respect cultural heritage as a necessary part in obtaining access to projects across its Australian operations and operate within the appropriate protocols.

Health and Safety

The Group aims to achieve and maintain a high standard of workplace health, safety and wellbeing. In order to achieve this objective, the Group provides mental health wellbeing training, mentoring and supervision for employees and ongoing pastoral care support plus regularly reviewing and implementing high standards for workplace safety.

Employment Policies

The Group is committed to promoting policies which ensure that high calibre employees are attracted, retained and motivated, to ensure the ongoing success for the business. Employees and those who seek to work within the Group are treated equally regardless of gender, marital status, disability, race, ethnicity or any other basis. We provide equal opportunities for career development and promotion as well as providing employees with appropriate training opportunities.

Provision of Information to Auditor

So far as each of the Directors is aware at the time this report is approved:

§ there is no relevant audit information of which the Company's auditor is unaware; and

§ the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

By order of the Board

Shaun Day

Managing Director

5 November 2023

consolidated statement of comprehensive income

for the year ended 30 June 2023

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

Consolidated Statement of Financial Position

as at 30 June 2023

The above consolidated statements of financial position should be read in conjunction with the accompanying notes. 

Mark Barnaba Shaun Day

Chairman Managing Director

Consolidated Statement of Changes in Equity

for the year ended 30 June 2023

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

Consolidated Statement of Cash Flows

for the year ended 30 June 2023

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. 

PRINCIPAL ACCOUNTING POLICIES

1 Corporate information

The consolidated financial statements of Greatland Gold plc and its subsidiaries (collectively, the Group) for the year ended 30 June 2023 were authorised for issue in accordance with a resolution of the Directors on 5 November 2023.

Greatland Gold plc is a public limited company incorporated and domiciled in England and Wales. The Company's ordinary shares are traded on LSE AIM (AIM:GGP).

2 Basis of preparation

The consolidated financial statements of Greatland Gold plc (Greatland or the Group) have been prepared in accordance with UK-adopted international accounting standards and in accordance with the requirements of the Companies Act 2006.

The financial statements have been prepared on the historical cost basis, except for certain financial instruments and cash-settled share-based payments which have been measured at fair value.

Going Concern

The Group's principal activities include the development of Havieron. As at 30 June 2023, the Group's net current assets of £35.4 million (2022: £14.8 million), with cash of £31.1 million (2022: £10.4 million) and advanced Havieron joint venture cash contributions of £12.6 million (2022: £8.4 million). 

In addition, as outlined in note 28, Greatland has access to a A$50 million (c. £26.3 million) undrawn standby loan facility with Wyloo Consolidated Investments Pty Ltd (Wyloo).

Management has prepared cash flow forecasts for the next twelve months under various scenarios. These scenarios anticipate the Group will be able to meet its commitments and pay its debts as and when they fall due.

If required, the Group has a number of options available to manage liquidity including:

§  significantly reduce expenditure on its own exploration programmes;

§  significantly reduce corporate costs;

§  raising additional funding through debt and equity, or a combination of both, which the Company considers it has the ability to do so, should it be required and has demonstrated an ability to do so in the past.

Should the directors not achieve the matters set out above, there is significant uncertainty whether the Company will continue as a going concern and therefore whether they will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

Greatland has considered sensitivities which include increases to the Havieron development costs. In this situation, the Company can mitigate expenditure including ceasing exploration activities and reducing corporate costs. Having prepared forecasts based on current resources and assessing methods of obtaining additional finance, the Directors believe the Group has sufficient resources to meet its obligations for a period of twelve months from the date of approval of these financial statements. Taking these matters into consideration, the Directors continue to adopt the going concern basis of accounting in the preparation of the financial statements.

Rounding

The amounts presented in this financial report have been rounded to the nearest £1,000 where noted (£'000) under the option available to the Company under the Companies Act 2006.

Significant accounting judgements, estimates and assumptions

The preparation of financial statements requires management to use estimates, judgements and assumptions. Application of different assumptions and estimates may have a significant impact on Greatland's net assets and financial results. Estimates and assumptions are reviewed on an ongoing basis and are based on the latest available information at each reporting date.

This note provides an overview of the areas that involved a higher degree of judgement and complexity, or areas where assumptions are significant to the financial statements. Detailed information about each of these estimates and judgements is included in other notes together with information about the basis of calculation for each affected line item in the financial statements.

2 Basis of preparation (continued)

Basis of consolidation 

The consolidated financial statements comprise of the financial statements of Greatland Gold plc and its subsidiaries it controls (as outlined in note 21). Accounting for joint ventures is included in note 22. 

Subsidiaries are those entities controlled directly or indirectly by the Company. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The results of the subsidiaries are included in the Consolidated Statement of Comprehensive Income from the date of acquisition using the same accounting policies as those of the Group.

The consideration transferred in a business combination is the fair value at the acquisition date of the assets transferred and the liabilities incurred by the Group and includes the fair value of any contingent consideration arrangement. Acquisition-related costs are recognised in the income statement as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value at the acquisition date.

All intra-group balances and transactions, including any unrealised income and expenses arising from intragroup transactions, are eliminated in full in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Foreign currencies

Both the functional and presentational currency of Greatland Gold plc is sterling (£). Each entity in the Group determines its own functional currency, the primary economic environment in which the entity operates, and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are recorded at the spot rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. All differences are taken to the Statement of Comprehensive Income.

On consolidation of a foreign operation, assets and liabilities are translated at the balance sheet rate, income and expenses are translated at average foreign currency rates prevailing for the relevant period. Gains/losses arising on translation of foreign controlled entities into pounds sterling are taken to the foreign currency translation reserve.

Other accounting policies

Significant and other accounting policies that summarise the measurement basis used and are relevant in understanding the financial statements are provided throughout the notes to the financial statements.

New standards, amendments and interpretations adopted by the Group

There are no IASB and IFRIC standards that have been issued with an effective date after the date of the financial statements which are expected to have a material impact on the Group.

2 Basis of preparation (continued)

New and amended Standards and Interpretations issued but not effective

At the date of approval of these financial statements, the following standards and interpretations which have not been applied in these financial statements were in issue but not yet effective (and in some cases had not been adopted by the UK):

§  Amendments to IFRS 17: Insurance Contracts - effective 1 January 2023

§  Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current - effective 1 January 2023*

§  Amendments to IAS 1: Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies - effective 1 January 2023*

§  Amendments to IAS 8: Accounting policies, Changes in Accounting Estimates and Errors - Definition of Accounting Estimates - effective 1 January 2023*

§  Amendments to IAS 12: Income Taxes - Deferred Tax related to Assets and Liabilities arising from a Single Transaction - effective 1 January 2023*

*subject to UK endorsement

The new and amended Standards and Interpretations which are in issue but not yet mandatorily effective are not expected to be material.

FINANCIAL PERFORMANCE

3 Segmental information

An operating segment is a component of the Group that engages in business activities from which it may earn revenue and incur expenditure and about which separate financial information is available that is evaluated regularly by the Group's Chief Operating Decision Makers, who is the Managing Director, in deciding how to allocate resources and in assessing performance.

Segment information is evaluated by the executive management team and is prepared in conformity with the accounting policies adopted for preparing the financial statements of the Group.

Segment results

3 Segmental information (continued)

Adjustments and eliminations

Share-based payment expense, foreign exchange losses, other income, finance income, finance costs and taxes are not allocated to individual segments as they are managed on a Group basis.

Segment assets and liabilities

4 Other income and expenses

Other income

(a) Government grant

Greatland was awarded a government grant of £0.1 million to co-fund exploration drilling and mobilisation costs at its 100% owned Rudall licence in the Paterson region under the Western Australian Government's Exploration Incentive Scheme. There are no unfulfilled conditions or other contingencies attached to this grant.

Breakdown of expense by nature

5 Employee information

For further details on Director's remuneration refer to Remuneration Report.

Recognition and measurement

Employee benefits

Wages, salaries and defined contribution superannuation expenses are recognised as and when employees render their services. Expenses for non-accumulating personal leave are recognised when the leave is taken and measured at the rates paid or payable.

Share-based payments

The accounting policy, key estimates and judgements relating to employee share-based payments are set out in note 24 of the Annual Report.

6 Finance income and finance costs

Recognition and measurement

Interest income is recognised as interest accrues using the effective interest method.

Provisions and other payables are discounted to their present value when the effect of the time value of money is significant. The impact of the unwinding of these discounts is reported in finance costs.

Borrowing costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.

All other borrowing costs are recognised in income in the period in which they are incurred.

7 Taxation 

There was no deferred or current tax during the year or in prior year.

Factors affecting tax charge for the year

The tax assessed on the loss on ordinary activities for the period differs from the standard rate of corporation tax in the UK of 19% (2022: 19%) and Australia of 30% (2022: 30%). The differences are explained below:

Tax losses

The Group has unrecognised carried forward losses for which no deferred tax asset is recognised as the statutory requirements for recognising those deferred tax assets have not yet been met. The Group recognises the benefit of tax losses only to the extent of anticipated future taxable income or gains in relevant jurisdictions. These losses do not expire. Unrecognised UK revenue losses for which no deferred tax asset has been recognised are £11.3 million (2022: £9.8 million). Unrecognised Australian revenue losses for which no deferred tax asset has been recognised are approximately A$88.3 million (£46.4 million) (2022: £25.6 million).

Recognition and measurement

Current tax assets and liabilities for the period are measured at the amount expected to be recovered from, or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted by the reporting date in the countries where the Group operates.

Full provision is made for deferred taxation resulting from timing differences which have arisen but not reversed at the reporting date.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

The Group offsets deferred tax assets and deferred tax liabilities if, and only if, it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax assets on carried forward losses are only recorded where it is expected that future trading profits will be generated in which this asset can be offset. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

7 Taxation (continued)

Tax consolidation

Greatland Holdings Group Pty Ltd, a 100% owned subsidiary of Greatland Gold plc, and its 100% owned Australian resident subsidiaries formed a tax consolidated group with effect from 14 February 2023. Greatland Holdings Group Pty Ltd is the head entity of the tax consolidated group. Members of the tax consolidated group have entered into a tax funding agreement under which the wholly-owned entities fully compensate Greatland Holdings Group Pty Ltd for any current tax payable assumed and are compensated by Greatland Holdings Group Pty Ltd for any current tax receivable and deferred tax assets related to unused tax losses or unused tax credits that are transferred to Greatland Holdings Group Pty Ltd under the tax consolidation.

8 Earnings per Share

The weighted average number of the Group's shares including outstanding options is 4,921,573,345 (2022: 4,097,373,291). Dilutive earnings per share are not included on the basis inclusion of potential ordinary shares would result in a decrease in loss per share and is considered anti-dilutive.

Subsequent to year end, the following transactions occurred that were not retrospectively adjusted in the calculation of earnings per share:

§ Greatland granted 302,700,000 Co-Investment Options with an exercise price of £0.119, 31,100,000 Retention Rights and 13,306,047 FY23 Performance Rights at an exercise price of £0.001 to employees under the Company's employee share plan. These transactions were not retrospectively adjusted in the calculations of earnings per share.

§ Mr Borrelli exercised his remaining 19,000,000 options and Mr Latcham exercised his 2,750,000 remaining options.

For further details, refer to events after the reporting period in note 28.

Recognition and measurement

Basic earnings per share

Basic earnings per share is calculated by dividing:

§ the profit attributable to owners of the company, excluding any costs of servicing equity other than ordinary shares

§ by the weighted average number of ordinary shares outstanding during the financial year, adjusted for any bonus elements in the ordinary shares issued during the year and excluding treasury shares

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:

§ the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and

§ the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

CAPITAL MANAGEMENT

9 Cash and cash equivalents

Recognition and measurement

Cash and cash equivalents in the consolidated statement of financial position and consolidated statement of cash flows comprise cash at bank and short-term deposits that are readily convertible to known amounts of cash with insignificant risk of change in value. Short-term deposits are usually between one to three months depending on the short-term cash flow requirements of the Group. The Group holds short-term deposits with financial institutions that have a long term credit rating of AA- or above.

10 Advanced joint venture cash contributions 

Recognition and measurement

Joint venture cash calls are paid in advance of expenditure being incurred. Once the funds have been incurred they are transferred out of current assets and into the relevant asset or expenditure depending on the nature of the transaction. 

11 Trade and other receivables

Recognition and measurement

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for the expected future issue of credit notes and for non-recoverability due to credit risk. The Group applies the simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets. To measure expected credit losses, trade receivables and contract assets have been grouped based on shared risk characteristics. No such credit loss has been recorded in these financial statements as any effect would be immaterial.

12 Trade and other payables

12 Trade and other payables (continued)

Recognition and measurement

Trade and other payables

Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition. 

Employee benefits

Short term employee benefits are liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current other payables and accruals in the statement of financial position.

13 Borrowings

The borrowings presented above relate to a loan agreement with Newcrest Operations Limited dated 29 November 2020 in respect of Havieron. As at 30 June 2023, the loan was fully drawn down. The key terms of the facility with Newcrest include:

§  The loan is made up of Facility A and Facility B with values of US$20 million and US$30 million respectively, in addition to capitalised interest;

§  Interest is calculated on the LIBOR rate plus a margin of 8% annually and is calculated every 90 days. . Following the removal of LIBOR this was subsequently updated to SOFR plus a margin of 8.26161%;

§  The facility is secured against Greatland's share of the Havieron asset;

§  Repayment of the loan is from 80% of net proceeds from the sale of Havieron products and must be repaid by the earlier of 10 years from the date of the Feasibility Study or 12 years from the date of the Newcrest Loan Agreement;

§  There are no financial covenants.

Unrealised foreign exchange loss of £1.7 million (2022: £2.7 million) was incurred on the US$52.4 million loan balance held by the Australian subsidiary. The functional currency of the Australian subsidiary is Australian dollars while the loan is denominated in US dollars. The exchange rate decreased during the year from 0.69 USD/AUD at 30 June 2022 to 0.66 USD/AUD at 30 June 2023.

Exchange differences arising on the translation of the functional currency of the Australian subsidiary differing from the Group's presentation currency resulted in a reduction to borrowings of £3.3 million during the year (2022: addition of £1.7 million). The exchange rate decreased during the year from 0.545 GBP/AUD at 30 June 2022 to 0.525 GBP/AUD at 30 June 2023.

Details of the Group's exposure to risks and the maturity of the loan are set out in note 15 of the Annual Report.

Recognition and measurement

At initial recognition, financial liabilities are classified as financial liabilities at fair value through profit or loss, amortised cost, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of those measured at amortised cost, net of directly attributable transaction costs. The subsequent measurement of financial liabilities depends on their classification, as described below.

Financial liabilities measured at amortised cost

Borrowings are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the effective interest method amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest. Refer to note 17 of the Annual Report for interest capitalised to mine development.

14 Equity

(a) Contingent deferred acquisition consideration

In July 2022 (prior to the outcome of the Havieron 5% option process), Greatland successfully renegotiated the deferred consideration that was due to be paid in respect of its 2016 acquisition of Havieron. The original terms of the acquisition comprised an initial payment of A$25,000 in cash and 65,490,000 new ordinary shares. A further 145,530,000 new ordinary shares were payable if Greatland's ownership interest in Havieron reduced to 25% or less, or upon a decision to mine at Havieron whichever occurs earlier.

The 145,530,000 deferred share payment was renegotiated as follows:

i) 138,981,150 Greatland shares were issued to the vendor nominee, Five Diggers, during the year. This represented a 4.5% reduction in total shares issued relative to the ordinary agreed quantum

ii) In respect of the 138,981,150 shares issued, Five Diggers are subject to the following restrictions:

§ A lock up which prohibits any shares from being disposed of for the first 12 months from grant, subject to carveouts (such as recommend takeovers), and

§ Orderly market arrangement, under which the shares may only be traded through Greatland's broker (subject to customary carve outs)

The new ordinary shares were issued in Greatland on 2 August 2022. The fair value of the contingent consideration formed part of the original acquisition in 2016 and as such the equity instruments were issued to share capital for £0.001 as required by the Companies Act 2006, with nil value attributable to share premium in August 2022.

14 Equity (continued)

(b) August 2022 equity raise

On 25 August 2022, Greatland raised total gross proceeds of £29.8 million through placing 362,880,180 new ordinary shares at an issue price of £0.082. The raise was facilitated through an incorporated Jersey registered company, Ferdinand (Jersey) Limited. The proceeds of the share issue were held in trust by Greatland on behalf of Ferdinand (Jersey) Limited, which was then acquired by way of share for share exchange in circumstances which qualified for merger relief, therefore no amount was recognised as share premium on the share issue as required under section 612 of the Companies Act.

The amount recognised in the merger reserve reflects the amount by which the fair value of the shares issued exceeded their nominal value and is recorded within the merger reserve on consolidation, rather than in a share premium account.

(c) Strategic placement to Wyloo

On 12 September 2022, Greatland entered into an agreement for a strategic equity investment with Wyloo, a privately owned minerals investment company. Wyloo subscribed for 430,024,390 shares for A$60 million (£33.5 million), an equivalent at the date of the agreement of £0.082 per share. This placement occurred at the same price as the August 2022 raise which equated to a small premium to the five-day VWAP of 9 September 2022. The transaction was approved by shareholders on 7 October 2022, resulting in Wyloo becoming Greatland's largest shareholder with approximately 8.6% of shares on issue. Settlement occurred on 14 October 2022 at a converted share price of £0.078 per share. On settlement, the A$60 million (£33.5 million) consideration received from Wyloo was allocated to share capital and share premium reflecting the fair value of the ordinary shares at settlement date.

As part of the equity subscription, a further £35 million may be raised from Wyloo in the future through the conversion of 352,620,000 warrants with a strike price of £0.10 per share and expiry date of 6 October 2025. The warrants were recognised in the statement of financial position at nil value on issue.

(d) Farm-in to Rio Tinto Exploration's Paterson South 

In May 2023, Greatland entered into a farm-in and joint venture agreement with Rio Tinto in respect of the Paterson South Project which comprises of nine exploration licences. Under the farm-in and joint venture arrangement, Greatland is required to make an up-front payment to RTX of A$350,000 which Greatland has elected to settle in shares within 6 months from the date of execution. As the farm-in and joint venture agreement was executed during the year, the up-front payment has been capitalised as part of the acquisition costs of the tenements and recognised in share-based payment reserves until the shares are issued.

Capital management

Greatland's capital includes shareholders' equity, reserves and net debt. Net debt is defined as borrowings and lease liabilities less cash and cash equivalent.

Management controls the capital of the Group in order to generate long-term shareholder value and ensure that the Group can fund operations and continue as a going concern. Management effectively manages the Group's capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include share issues and debt considerations. Given the nature of the Group's current activities, the entity will remain dependent on debt and equity funding in the short to medium term until such time as the Group becomes self-financing from the commercial production of mineral resources.

Recognition and measurement

Share capital and share premium

Share capital is the nominal value of shares issued at £0.001.

Share premium is the amount subscribed for share capital in excess of nominal value, less share issue cost.

Ordinary shares participate in dividends and the proceeds on winding up the Company in proportion to the number of shares held. At shareholder meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

Merger reserve

Where the Company issues equity shares in consideration for securing a holding of at least 90% of the nominal value of each class of equity in another company, the application of merger relief is compulsory. Merger relief is a statutory relief from recognising any share premium on shares issued. A merger reserve is recorded equal to the value of share premium which would have been recorded if the provisions of section 612 of the Companies Act 2006 had not been applicable.

15 Financial risk management 

This note explains the Group's material exposure to financial risks and how these risks could affect the Group's future financial performance.

There have been no changes in financial risks from the previous year. The Group did not have any hedging in place at 30 June 2023 or in prior year. Details on commodity price risk is included in Principal Risks and Uncertainties of the Annual Report.

Market Risk

(a) Foreign currency risk and sensitivity analysis

The Group's exposure to foreign currency risk at the end of the reporting period was as follows:

The following table demonstrates the sensitivity of the exposure at the balance sheet date to a reasonably possible change in AUD/USD/GBP exchange rate, with all other variables held constant. The impact on the Group's profit before tax and equity is due to changes in the fair value of monetary assets and liabilities, expressed in GBP. 

(b) Interest rate risk management and sensitivity analysis

The Group's policy is to retain its surplus funds in interest bearing deposit accounts including term deposits available up to twelve months' maximum duration. An increase / decrease of 2% in interest rates will impact the Group's income statement by a gain/loss of £1.2 million (2022: £0.2 million). The Group considers that a +/-2% movement in interest rates represents reasonable possible changes.

The Group has borrowing facilities with Newcrest as part of the Havieron project with a total facility limit of US$50 million, excluding interest. Interest is calculated on the LIBOR rate plus a margin of 8% pa. Interest is calculated every 90 days. Under the Group's accounting policy, interest on the loan is capitalised to mine development and therefore movements in interest rates had no impact on the profit or loss in the current year.

Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its financing activities, including deposits with financial institutions. At the reporting date, the carrying amount of the Group's financial assets represents the maximum credit exposure.

15 Financial risk management (continued)

The credit risk on cash and cash equivalents is managed by restricting dealing and holding of funds to banks which are assigned high credit ratings by international credit rating agencies. The Group's cash and cash equivalents as at 30 June 2023 are predominately held with financial institutions with an investment grade long term credit rating with Standard & Poor's. As short-term deposits have maturity dates of less than twelve months, the Group has assessed the credit risk on these financial assets using life time expected credit losses. In this regard, the Group has concluded that the probability of default on the term deposits is relatively low. Accordingly, no impairment allowance has been recognised for expected credit losses on the short-term deposits.

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation. The Group manages liquidity risk by conducting regular reviews of the timing of cash flows in order to ensure sufficient funds are available to meet these obligations.

(a) Maturities of financial liabilities

The table below analyses the Group's financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are contractual discounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.