REG - Greatland Gold PLC - Funding secured for development of Havieron

Greatland GoldAnnouncement

12/09/2022 07:15

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RNS Number : 0719Z  Greatland Gold PLC  12 September 2022

12 September 2022

 

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

("Greatland" or "the Company")

 

Greatland secures pathway for fully funding its share of the development of
Havieron

 

Bank debt facilities of A$220m committed with a syndicate of leading
international banks

 

Proposed strategic equity investment of up to A$120m in Greatland by Wyloo
Metals

 

Upon completion, Greatland's 30 per cent share of the Havieron development
expected to be fully funded through to production

 

Greatland Gold plc (AIM:GGP), is pleased to announce the execution of debt and
equity agreements to secure up to total of A$340 million in new funding that
is expected to enable Greatland to fully fund its 30 per cent share of
Havieron into production.

 

Highlights:

§ Commitment Letter, including Terms Sheet, signed for a A$220m (c.£130m),
seven-year term, self-arranged debt syndicate with three leading banks:
Australia and New Zealand Banking Group Limited ("ANZ"), HSBC Bank ("HSBC")
and ING Bank (Australia) ("ING")

§ Strategic equity investment from Wyloo Metals ("Wyloo"), a privately owned
metals company with a focus on investing in the responsible development of the
next generation of mines

§ Wyloo initial strategic equity subscription of A$60m (c.£35m), which is
subject to shareholder approval, and with an additional future potential
equity contribution of A$60m, providing a total of A$120m

§ Initial equity subscription priced at 8.2 pence per share ("Wyloo
Placement"), being the same price at which equity was raised in the recent
placing (announced 24 August 2022) and small premium to the five-day volume
weighted average share price ("VWAP") to 9 September 2022, and resulting in
Wyloo becoming Greatland's largest shareholder with approximately 8.6 per cent
of shares on issue

§ Wyloo's further potential investment is through the issue of warrants to
subscribe for additional equity as ordinary shares at an exercise price of
10.0 pence per share ("Wyloo Warrants") which, if exercised in full, will
realise further gross proceeds of approximately £35m. If the Wyloo Warrants
are exercised in full, the average price of Wyloo's investment in Greatland
would be just over 9.0 pence per share being a 10.6 per cent premium to the
five-day VWAP to 9 September 2022

§ The Wyloo Placement and the Wyloo Warrants are subject to shareholder
approval. An extraordinary general meeting is expected to be convened in
October 2022. The Directors unanimously recommend that shareholders vote in
favour of the approval resolution.

§ Completion of the debt facilities and Wyloo Placement will enable Greatland
to be fully funded for its 30 per cent share of the Havieron project
development based upon the October 2021 2Mtpa Pre-Feasibility Study; and well
positioned to be fully funded in respect of the Feasibility Study targeting an
expansion to around 3Mtpa due in the December 2022 quarter

§ Securing the debt facility commitment letter with Tier 1 banking
institutions prior to the finalisation of the Feasibility Study reflects the
highly bankable nature of the project and the quality of the Havieron asset

§ Highly competitive term debt interest rate at 3.50% p.a. margin plus BBSY
benchmark reducing to a margin of 3.25% p.a. post project completion with
early repayment flexibility

 

Shaun Day, Managing Director of Greatland Gold plc, commented: "This is a
tremendous announcement for Greatland to have a pathway to being fully funded
for its share of the development costs of Havieron. This outcome has been
achieved through a combination of equity market support, including today's
execution of strategic investment agreements with Wyloo and with the support
from a syndicate of high-quality banks providing a commitment letter in
respect of A$220m of debt funding.

 

"The significant size of each bank's commitment together with the strategic
support from Wyloo highlights the long-term confidence in the Havieron
gold-copper project and the strength of this world class asset.

 

"The selection of ANZ, HSBC and ING as our banking partners reflects their
quality as financial institutions, commitment to supporting high-quality asset
development and their strong relationship commitment throughout the banking
process.

 

"Following shareholder approval, we look forward to welcoming Wyloo as our
strategic partner and largest shareholder to complete the Havieron funding
package.

 

"Completing the debt facilities and Wyloo investment will enable Greatland to
be fully funded for its share of costs in developing the Havieron project into
first production and potential free cash flow which will provide long-term
financial stability and create significant value for Greatland and its
shareholders."

 

Luca Giacovazzi, CEO of Wyloo Metals, commented: "Havieron is one of the most
exciting discoveries in Western Australia's emerging Paterson Range that
continues to grow in scale and quality as the understanding of this tier-one
system evolves.

We are proud to be supporting Greatland to develop WA's next copper-gold mine
into a low cost, modern mining operation with very high environmental and
social standards.

"We are equally as excited to be supporting the Company's ongoing exploration
of its expansive tenement package, which we think has great potential for
further discovery."

 

 

Strategic equity investment by Wyloo Metals

Wyloo has agreed to subscribe for, and the Company has agreed to allot and
issue, an initial total of 430,024,390 new fully paid ordinary shares
("Ordinary Shares") at an issue price of 8.2 pence per Ordinary Share to raise
gross proceeds of A$60m (c.£35m) under the terms of a subscription agreement
(the "Wyloo Placement"). The issue price represents a small premium to the
five-day VWAP to 9 September 2022. The subscription proceeds will be settled
in Australian dollars at an exchange rate 0.5877 (AUD:GBP).

 

The Company will also issue to Wyloo (through its wholly owned subsidiary
Wyloo Consolidated Investments Pty Ltd) warrants to subscribe for up to an
additional 352,620,000 Ordinary Shares which, if exercised in full, will
realise gross proceeds of £35m (c.A$60m). The Warrants have an exercise price
of 10.0 pence per Ordinary Share and may be exercised at any time up to the
third anniversary of grant. If the Warrants are exercised in full, the average
price of Wyloo's investment on Greatland would be just over 9.0 pence per
Ordinary Share being a 10.6 per cent premium to the five-day VWAP to 9
September 2022.

 

The allotment and issue of the shares in the Wyloo Placement and the Wyloo
Warrants are subject to the approval of Greatland shareholders. Accordingly,
the Company intends to send a Notice of Meeting in September 2022 to hold an
Extraordinary General Meeting in October 2022. A further announcement will be
made when the notice of meeting is sent to shareholders.

 

When completed, the Wyloo Placement will result in Wyloo (through its wholly
owned subsidiary Wyloo Consolidated Investments Pty Ltd) becoming Greatland's
largest shareholder with approximately 8.6 per cent of shares on issue. Upon
exercise of the Wyloo Warrants in full, Wyloo's shareholding in Greatland
would increase to approximately 14.6 per cent.

 

Settlement in accordance with the subscription agreement is scheduled to occur
upon the admission of the Ordinary Shares comprised in the Wyloo Placement to
trading on the AIM market of the London Stock Exchange ("Admission") following
shareholder approval and within five business days of shareholder approval.
Subject to shareholder approval, application will be made for Admission and a
further announcement will be made on the proposed timing of Admission which is
expected to occur on or before 31 October 2022.

 

Bank debt facility

The self-arranged syndicated bank debt facility was completed following very
strong market interest from a number of leading international financial
institutions.

 

With the selection of the final bank group comprising ANZ, HSBC and ING
reflecting the calibre of these financial institutions and their strong
relationship commitment throughout the banking process.

 

This financing facility is a key component of Greatland's funding strategy to
maximise available debt funding with banks before the Feasibility Study and
repay the Newcrest facility to maximise shareholder value. Key terms of the
proposed facility are:

§  The A$220m secured debt facilities comprise:

§ Facility A: A$200m seven-year amortising Term Debt Facility

§ Facility B: A$20m five-year Revolving Credit Facility

§  Interest will be charged at benchmark (Australian BBSY) plus Margin of:

§ Facility A: 3.50% p.a. reducing to 3.25% p.a. post project completion

§ Facility B: 4.50% p.a.

§  Amortisation of Facility A will only commence 12 months post project
completion, but no later than 21 December 2025, including a bullet repayment
of A$40m due at the maturity of Facility A

§  Proceeds from the first drawdown are expected to repay the existing
Newcrest Loan Agreement. This will provide a substantial cost saving by
reducing interest from benchmark plus 8.00% down to benchmark plus 3.50%

§  Use of funds includes:

§ to refinance the US$50m Newcrest Loan Agreement in full

§ fund called sums with respect to the Havieron Project

§ other costs and expenses not included as called sums and costs in
connection with the Havieron project or Joint Venture including taxes

§ Greatland corporate costs and other expenses

§  Repayment of Facility A may be accelerated by the operation of a 50 per
cent cash sweep in circumstances where the Company generates excess free cash
flow

§  The facility limit includes minimum pricing requirements for the
mandatory hedging, which is a total of 121koz of gold within the first four
years of production. No hedging of copper production is presently intended

§  The facility provides for a standard project financing security package
which includes a parent guarantee from Greatland Gold Plc until project
completion

§  Costs, fees and expenses are payable by the Company in connection with
the debt facilities

The debt funding requires a total equity contribution of £60m as a
pre-condition to full draw down. The August 2022 equity raising together with
the Wyloo Placement announced today, fully satisfies the equity requirement of
the proposed financing.

 

Whilst the Company and the Banks have entered the Commitment Letter, financial
close of the proposed facility and draw down is also subject to customary
project financing conditions including completion of reporting requirements,
Feasibility Study criteria and agreeing final documentation.

 

Enquiries:

 

 Greatland Gold PLC                                                    info@greatlandgold.com

 Shaun Day                                                             www.greatlandgold.com

 SPARK Advisory Partners Limited (Nominated Adviser)                   +44 (0)20 3368 3550

 Andrew Emmott/James Keeshan

 Berenberg (Joint Corporate Broker and Financial Adviser)              +44 (0)20 3207 7800

 Matthew Armitt/Jennifer Lee/Jack Botros

 Canaccord Genuity (Joint Corporate Broker and Financial Adviser)      +44 (0)20 7523 8000

 James Asensio/Patrick Dolaghan

 Hannam & Partners (Joint Corporate Broker and Financial Adviser)      +44 (0)20 7907 8500

 Andrew Chubb/Matt Hasson/Jay Ashfield

 SI Capital Limited (Joint Broker)                                     +44 (0)14 8341 3500

 Nick Emerson/Sam Lomanto

 Gracechurch Group (Media and Investor Relations)                      +44 (0)20 3488 7510

 Harry Chathli/Alexis Gore/Tan Siddique

 

Notes for Editors:

Greatland Gold plc (AIM:GGP) is a mining development and exploration company
with a focus on precious and base metals. The Company's flagship asset is the
potentially world class Havieron gold-copper deposit in the Paterson region
of Western Australia, discovered by Greatland and presently under development
through a joint venture with Newcrest (the "JV"). Newcrest holds a joint
venture interest of 70% (30% Greatland).

Havieron is located approximately 45km east of Newcrest's Telfer gold mine
and, subject to positive feasibility study and decision to mine, will
leverage the existing infrastructure and processing plant to significantly
reduce the project's capital expenditure and carbon impact for a low-risk and
low-cost pathway to development.

Construction is well advanced and continuing with the box cut and decline to
develop the Havieron deposit originally commenced in February 2021. An
extensive growth drilling programme continues at Havieron with a view to
further expanding the understanding and scale of the ore body.

Greatland has a proven track record of discovery and exploration success. It
is pursuing the next generation of tier-one mineral deposits by applying
advanced exploration techniques in under-explored regions. The Company is
focused on safe, low-risk jurisdictions and is strategically positioned in the
highly prospective Paterson region. Greatland has a total of six projects
across Australia with a focus on becoming a multi-commodity mining company
of significant scale.

 

Overview of Wyloo Metals

Wyloo Metals Pty Ltd is a privately-owned metals company with a focus on
investing in the critical mineral supply chain. Led by a multidisciplinary
team of geologists, engineers and financial professionals, Wyloo Metals
manages a diverse portfolio of exploration and development projects and
cornerstone interests in a number of public companies. Wyloo has a long-term
investment mandate and is focused on producing commodities that support the
transition to a low-carbon future.

More information about Wyloo can be found on its website:
https://www.wyloometals.com (https://www.wyloometals.com)

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