REG - Greatland Gold PLC - Completion of Acquisition of Havieron & Telfer

Greatland GoldAnnouncement

04/12/2024 07:00

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RNS Number : 7552O  Greatland Gold PLC  04 December 2024

Greatland Gold plc (AIM: GGP)

E: info@greatlandgold.com

W: https://greatlandgold.com

: twitter.com/greatlandgold

 

 

NEWS RELEASE | 4 December 2024

 

 

Completion of Transformational Acquisition of Havieron & Telfer

 

 

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) (Greatland or the Company) announced on 10
September 2024 that it had entered into a binding agreement with certain
Newmont Corporation subsidiaries (Newmont) to acquire Newmont's 70% ownership
interest in the Havieron gold-copper project (Havieron), 100% ownership of the
Telfer gold-copper mine (Telfer), and other related interests in assets in the
Paterson region (together, the Target Assets), (the Acquisition).

 

Greatland is delighted to announce that completion of the Acquisition
(Completion) will occur in conjunction and simultaneously with admission of
the Consideration Shares (defined and described below) to Newmont, and
ownership and control of the Target Assets will transfer to the Greatland
group with effect from 8:00 a.m. today, Wednesday 4 December 2024.

 

Greatland Managing Director, Shaun Day, commented: "The closing of our
acquisition today is a watershed moment for Greatland.

 

"Greatland's discovery of the world class Havieron orebody in 2018 established
our platform for growth.  Returning to 100% ownership of Havieron now gives
us the opportunity and control to deliver the project's full potential.  We
have a defined pathway for Havieron to become a low-cost long life gold-copper
asset of significant scale.

 

"Telfer is an iconic Australian mine that immediately transforms Greatland
into a significant producer of gold and copper, with a defined mine plan that
is materially de-risked by substantial ore stockpiles, and significant mine
life extension prospects. Telfer production is expected to generate
significant free cash flow, which we expect will help to self-fund the
completion of Havieron's development.

 

"Combining Havieron and Telfer under our single ownership provides the
opportunity to operate efficiently and deliver an exceptional platform for
continued growth and a compelling opportunity to create value for our
shareholders.

 

"This transaction was only possible with the support, time and effort of many
people and organisations.  I would like to thank our shareholders, both
long-standing and new, who have supported Greatland's remarkable journey and
our funding of the Acquisition.  Newmont, our counterparty and now major
shareholder, has been highly constructive and collaborative in reaching and
completing our bilateral transaction. Our banking syndicate of ANZ, HSBC and
ING has supported Greatland for a number of years as we have evolved from a
developer to, now, a producer. The exceptional efforts and achievements of our
Greatland team, both Board and management, cannot be overstated, and we are
pleased to be augmenting our team with an established Telfer workforce.

 

"Finally, I would like to acknowledge our broader stakeholders. Telfer is an
established and important part of the Paterson region and we understand our
responsibility as its steward going forward."

 

Transaction highlights

 

The acquisition of Havieron and Telfer is a highly accretive and strategically
compelling transaction that has the potential to deliver material value to
Greatland's shareholders.

 

Key highlights include:

§ Telfer production: Telfer is a substantial operating gold-copper mine that
is expected to generate significant near-term cash flow.  Greatland will
benefit from an estimated c.11.5Mt of run-of-mine ore stockpiles that have
already been mined, significantly de-risking and reducing the costs of
Greatland's initial Telfer production.  A further estimated c.20Mt of low
grade stockpiles are also available.

An independently reviewed initial Telfer mine plan was set out in the
Competent Person's Report in Greatland's Admission Document published on 10
September 2024, with total estimated production of 426koz gold equivalent at
an estimated AISC of US$1,454/oz (net of by-product credits) over 15 months
from the restart of processing operations at Telfer (which occurred in late
September under Newmont's ownership).  Greatland expects to provide
production and cost guidance for FY25 following its first complete quarter of
ownership and operation.

§ Telfer extension opportunities: In parallel to executing the initial Telfer
mine plan, a number of additional potential Telfer ore sources have already
been drill tested and will be assessed with a view to extending the current
Telfer mine plan.  Greatland will conduct a Telfer-wide review of all
mineralisation and stockpiles to produce an updated Telfer Mineral Resource
estimate in accordance with the JORC Code, targeted to be completed in the
March quarter 2025.  Further high priority mine life extension opportunities
at Telfer will be drill tested.

§ Havieron: Havieron is a world class gold-copper project with a Mineral
Resource estimate of 8.4Moz gold equivalent metal content.  The independently
reviewed base case (the Greatland Base Case), set out in the Competent
Person's Report in Greatland's Admission Document published on 10 September
2024, estimates a 2.8Mtpa mining operation with average annual production of
258koz gold equivalent at a lowest quartile all-in sustaining cost (AISC)
globally of US$818/oz in steady state (first 15 years, net of by-product
credits), with a 20-year total mine life.  The Greatland Base Case will be
refined and optimisation opportunities will be assessed in a Feasibility Study
targeted to be completed by Greatland in H2 2025, including potential mining
throughput expansion and consideration of a bulk ore handling solution.

§ Consolidation of mine, infrastructure and control: Ownership of the Telfer
infrastructure substantially de-risks Havieron's development and provides
expansion optionality. With 100% ownership of the Target Assets, Greatland has
the opportunity to optimise and develop an integrated Telfer-Havieron mining
and processing operation.

§ Telfer workforce: Greatland is delighted that 435 Telfer employees have
accepted offers of employment with Greatland, an acceptance rate of over 98%,
securing the transfer of a significant and highly skilled workforce, and
preserving the existing capability, expertise and knowledge to enable
continuity of efficient operations.

§ Funding and liquidity: Greatland has entered into a A$100 million
syndicated debt facility agreement with its leading Australian and
international banking syndicate of ANZ, HSBC and ING, including a A$75 million
revolving working capital facility that matures on 1 December 2025.  Together
with the equity funded working capital successfully raised for the
Acquisition, the facility provides important liquidity and financial
flexibility for Greatland's working capital requirements for the operation of
Telfer.

§ Clear pathway to fund Havieron development: Greatland has a non-binding
letter of support for A$750 million in proposed banking facilities for the
development of Havieron, with ANZ, HSBC and ING Bank.  Combined with equity
funded working capital and expected cash flow generation from Telfer,
Greatland expects there is a clear and non-dilutive pathway to the Havieron
development being fully funded.

§ Arrangements with Newmont: Following Completion, Newmont is Greatland's
largest shareholder with 20.4% of shares on issue.  Newmont's shareholding is
subject to an initial 12 month voluntary lock-in, a further 12 month orderly
market arrangement, and a relationship agreement.  Up to US$100 million of
the Acquisition cash consideration is deferred until Havieron commences
commercial production and subject to a gold price hurdle. Realisation of any
deferred cash consideration is linked to a successful operational scenario,
demonstrating Newmont's support of Greatland's stewardship of Havieron and
Telfer.

§ Upside potential: Greatland considers that there are significant upside
opportunities as a result of the Acquisition, including potential extension of
the current Telfer mine plan, optimisation of Havieron throughput potential
and Telfer processing capacity, supplementation of Havieron ore with Telfer
ore, and a potential regional 'hub & spoke' strategy enabled by Telfer
infrastructure.

 

Greatland's operating strategy is to renew and develop an integrated
Telfer-Havieron mining and processing operation, to create a generational
Australian gold-copper mining complex.  Further information about Greatland's
operating strategy and objectives is set out in the Company's Admission
Document dated 10 September 2024 and Supplementary Admission Document dated 3
December 2024, both of which are available at
https://greatlandgold.com/investors/results/.

As a significant Australian gold-copper producer and developer, Greatland
considers a listing on the Australian Securities Exchange (ASX) to be a
natural and compelling step for the group.  An ASX listing is targeted in the
June quarter 2025, following which the group would be dual listed on both ASX
and AIM.

 

Transaction consideration

 

Greatland agreed to acquire the Target Assets for total consideration and debt
repayment of up to US$475 million (before adjustments).

 

Greatland has paid the following upfront consideration upon Completion:

§ US$167.0 million Acquisition consideration (after estimated purchase price
adjustments(1)); and

§ US$167.5 million in the form of 2,669,182,291 Greatland ordinary shares
issued to Newmont (Consideration Shares), representing 20.4% of Greatland
shares on issue.

 

In addition, Greatland has made a US$52.4 million cash repayment of the entire
outstanding balance of the Havieron joint venture loan, which has now been
terminated.

 

Greatland expects to pay the following amounts to Newmont on a deferred basis:

§ A$23 million in aggregate estimated purchase price adjustments(1) due 180
days after Completion, for (i) ore mined and stockpiled between 1 October 2024
and Completion and acquired by Greatland at Completion; and (ii) to
compensate Newmont for running only one of the two Telfer processing trains
from 27 October 2024 until Completion (thus preserving ore and stockpiles for
Greatland to process after Completion); and

§ Up to a maximum of US$100 million in deferred cash consideration which may
be payable to Newmont on the first five years' Havieron gold production,
through a 50% price upside participation by Newmont above a US$1,850/oz hurdle
gold price, subject to an annual cap of US$50 million and aggregate cap of
US$100 million.

 

(1) Note on estimated adjustments: Pursuant to the Acquisition agreement, the
amount of the purchase price adjustments has been estimated for the purposes
of the adjustments paid on Completion.  A final adjustment will be calculated
and made following the preparation and agreement of a final post-completion
statement, with the final adjustment expected to be agreed or determined
within six months.

 

Admission

 

As detailed in the Company's Admission Document dated 10 September 2024 and
Supplementary Admission Document dated 3 December 2024, both of which are
available at https://greatlandgold.com/investors/results/
(https://greatlandgold.com/investors/results/) , the Consideration Shares have
been issued to Newmont as partial consideration for the Acquisition.
The Acquisition constituted a reverse takeover pursuant to the AIM Rules for
Companies.  As such, trading in the ordinary shares on AIM will be
simultaneously cancelled and readmitted (Admission) to trading at 8:00 a.m.
on Wednesday, 4 December 2024.

 

Following Admission, the Company's issued share capital comprises
13,079,294,602 ordinary shares each with one voting right per share.  There
are no shares held in treasury. When calculating the total number voting
rights, shareholders should use this figure as the denominator for the
calculations by which they will determine if they are required to notify their
interest in, or a change in their interest in, the share capital of the
Company under the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules.

 

Contact

 

For further information, please contact:

 

Greatland Gold plc

Shaun Day, Managing Director  |  Rowan Krasnoff, Head of Business
Development

info@greatlandgold.com

 

Nominated Advisor

SPARK Advisory Partners

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

 

Corporate Brokers

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

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

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 company focused on the production, development and
exploration of precious and base metals in Western Australia. Greatland is
listed on the London Stock Exchange's AIM Market (LSE:GGP) and operates its
business from its headquarters in Subiaco, Western Australia.

 

Greatland discovered the world class Havieron underground gold-copper deposit
in 2018, in the Paterson Province in the East Pilbara region of Western
Australia.

 

On 4 December 2024, Greatland completed an acquisition from Newmont that
consolidated 100% ownership of Telfer and Havieron, transforming Greatland
into a new Australian gold-copper producer of scale at Telfer, with a world
class development project in Havieron.

 

Greatland is targeting a dual listing on the ASX in the June quarter 2025.

 

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