REG - Greatland Gold PLC - Half-year Report
05/03/2024 07:15
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RNS Number : 6095F Greatland Gold PLC 05 March 2024
Greatland Gold plc (AIM: GGP)
E: info@greatlandgold.com
W: http://greatlandgold.com
: twitter.com/greatlandgold
5 March
2024
Half-Year Financial Report
for the six months ended 31 December 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) ("Greatland" or the "Company") is pleased to
announce its interim results for the six months ended 31 December 2023.
Principal activities
The principal activities of the Group during the period consisted of the early
works development and feasibility study of the Havieron gold-copper project
and the exploration and evaluation of mineral tenements in Australia.
Review of half-year results (unaudited)
§ Closing cash position of £12.7 million (30 June 2023: £31.1 million)
§ Havieron project costs capitalised of £12.3 million during the half-year
(31 December 2022: £12.2 million)
§ Closing debt balance of £41.1 million (30 June 2023: £41.5 million)
§ Net assets of £49.9 million (30 June 2023: £52.5 million)
§ Loss before share-based payments and finance items of £5.5 million (31
December 2022: £3.5 million); statutory loss of £5.5 million (31 December
2022: £13.3 million)
§ Exploration expense of £2.7 million (31 December 2022: £1.7 million)
HEALTH, SAFETY AND WELLBEING
Greatland's most important priority is safety, keeping our employees,
contractors and communities safe and well. Our goal is to operate with zero
fatalities, minimise workplace injuries and prevent catastrophic events.
Greatland achieved its goal of maintaining a safe workplace for all in the
first half of the financial year 2024. There were no fatalities at the Group's
projects during the half year (2023: nil) and the Total Recordable Injury
Frequency Rate for the Company (fully owned or operated projects) was nil
(2023: nil).
OPERATIONAL AND FINANCIAL REVIEW
Havieron Joint Venture, Western Australia (Greatland: 30%)
Havieron is an exciting underground gold-copper development project and is the
cornerstone of Greatland's strategic position in the Paterson region of
Western Australia, one of the leading frontiers for the discovery of
world-class precious and base metals deposits.
Discovered by Greatland in 2018, Havieron is currently owned in joint venture
with Newmont Corporation (NYSE:NEM; Newmont) which, through a wholly-owned
subsidiary, holds a 70% joint venture interest in Havieron and is manager of
the Joint Venture. Havieron has a Mineral Resource Estimate of 8.4Moz in
total gold equivalent (AuEq(1)) content, prepared by Greatland in accordance
with JORC.
Early works commenced in January 2021 and are now significantly advanced,
including development of the underground main access decline through 80% of
the total depth to the top of the Havieron ore body. A Pre-Feasibility Study
was completed in October 2021, and an updated Feasibility Study is currently
progressing.
Newmont became Greatland's joint venture partner and manager of the Havieron
joint venture on 6 November 2023, following completion of Newmont's
acquisition of Newcrest Mining Limited (previously ASX:NCM).
During the period, development of the decline progressed a further 353 metres,
with total development at Havieron having reached in excess of 3,060 metres,
including over 2,110 metres of advance in the main access decline (as of 31
December 2023). There is approximately 80 vertical metres of the total 420
metres of vertical distance remaining before the decline reaches the base of
the Permian cover and top of the Havieron orebody.
In October 2023, Greatland announced a pause in development of the main access
decline prior to development through the lower confined aquifer (LCA) which is
the final of three aquifers before the decline reaches the top of the Havieron
orebody, to allow depressurisation and dewatering of the aquifer and
additional water management data collection and evaluation. The pause
commenced in the December 2023 quarter and depressurisation activities were
expanded, with six depressurisation holes now drilled into the LCA and pumping
water to evaporation facilities at the surface. Data collection and
evaluation is continuing in parallel to increase confidence in water
management from the LCA and determine the timing of any additional water
management infrastructure required at surface.
Preparation of the Feasibility Study continued throughout the period, with
several value enhancing options to maximise value and further derisk the
project continuing to be assessed by the study work.
On 21 December 2023, Greatland announced an updated Mineral Resource Estimate
(MRE) for Havieron, prepared in accordance with JORC, outlining an increase in
the total gold equivalent (AuEq(1)) content to 8.4Moz, a 29% increase from
Greatland's previous March 2022 MRE (refer to Greatland's RNS of 21 December
2023 titled 'Havieron Mineral Resource Estimate Update'). The update included
a 32% increase in contained gold equivalent metal in the higher confidence
Indicated MRE category, which can potentially be considered in the updated Ore
Reserve Estimate that will be part of the Feasibility Study. The update
confirmed continuous mineralisation between the Eastern Breccia and main
Havieron Breccia domains, with the definition of a new high grade "Link Zone".
(1) The gold equivalent (AuEq) is based on assumed prices of US$1,700/oz Au
and US$3.75/lb Cu for Mineral Resource and metallurgical recoveries based on
block metal grade, reporting approximately at 87% for Au and 87% for Cu which
in both cases equates to a formula of approximately AuEq = Au (g/t) + 1.6* Cu
(%). It is the Company's opinion that all the elements included in the metal
equivalents calculation have a reasonable potential to be recovered and sold.
On 22 February 2024, Newmont announced an updated Mineral Reserve and Mineral
Resource for Havieron, prepared in accordance with the US Securities and
Exchange Commission's SK 1300 guidelines (SK 1300), which are different from
JORC. Refer to Greatland's RNS of 22 February 2024 titled 'Newmont Annual
Reserves & Resources Statement' for further information.
On 22 February 2024, Newmont announced its intention to divest its interest in
Havieron in calendar year 2024, as well as its 100% owned Telfer mining
operations located 45km west from Havieron, where ore from Havieron is
presently contemplated to be processed (subject to a positive feasibility,
decision to mine and entry into a toll processing agreement). Greatland
discovered the Havieron deposit and maintains its commitment to delivering
Havieron's full potential for all stakeholders. Under the Havieron joint
venture agreement, Greatland holds a right of last refusal in respect of a
sale by Newmont of its joint venture interest in Havieron to a third party.
Paterson South Farm-In and Joint Venture Arrangement, Western Australia
(Greatland earning up to 75%)
In May 2023, Greatland entered into the Paterson South farm-in and joint
venture agreement with Rio Tinto Exploration Pty Ltd (RTX), a wholly-owned
subsidiary of global mining group Rio Tinto, to accelerate exploration at nine
exploration licences (Paterson South Tenements) which collectively cover
1,537km(2) of highly prospective tenure within the Paterson region of Western
Australia, near Havieron.
Greatland has the right to earn up to a 75% interest in the Paterson South
Tenements by spending at least A$21.1 million and completing 24,500 metres of
drilling as part of a two-stage farm-in over seven years. During the period,
Greatland achieved the stage one minimum commitment under the farm-in
arrangement by completing 2,000 metres of drilling and A$1.1 million of
expenditure before 31 December 2024.
In late June 2023, Greatland commenced its maiden exploration drilling
campaign at the Paterson South Tenements, testing the Stingray and Decka
targets. Results of this drilling were announced in early November 2023. The
rapid commencement of drilling on the Paterson South Tenements within four
weeks of entering into the farm-in and joint venture arrangement is a
testament to both the high quality of the tenure and Greatland's drive to
rapidly unlock greater value from its Paterson region exploration portfolio.
Greatland is currently refining the exploration program to be carried out
across the remainder of the Paterson South Tenements, and has completed
on-ground heritage surveys over several targets on the Skylar, Wilki Lake and
Basel tenements. On-ground work including drilling is planned for 2024,
along with additional heritage surveys to enable on-ground work on all of the
highest priority prospects.
Juri Joint Venture, Western Australia (Greatland: 49%)
Juri is a joint venture between Greatland (49%) and Newmont (51%) to explore
the Paterson Range East and Black Hills exploration licences located in the
Paterson region, near Havieron. Newmont has the right to earn up to a 75%
interest in the Juri tenements by spending up to a further A$17 million in
Stage 2 of the farm-in.
Greatland's Juri joint venture partner Newcrest Operations Limited, now a
wholly owned subsidiary of Newmont, elected to assume management of the Juri
Joint Venture on 1 July 2023. Greatland and Newmont are two of the largest
landholders in the Paterson region, and we remain excited about the
prospectivity of the Juri Joint Venture tenure. The shift of Juri Joint
Venture management to Newmont has provided our exploration team with 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.
During the period, Newmont carried out an airborne gravity survey over parts
of the Juri Joint Venture tenure, the results of which are continuing to be
reviewed by the Joint Venture and will be incorporated into future on-ground
work plans.
Exploration, Western Australia (Greatland: 100%)
Greater Paterson
Greatland's 100% owned Paterson region exploration projects comprise of the
Scallywag and Canning projects:
§ Scallywag comprises four wholly-owned granted exploration licences:
Scallywag, Pascalle, Rudall and Black Hills North located adjacent to and
around Havieron. Exploration work is focused on the discovery of intrusion
related gold-copper deposits similar to Havieron, Telfer and Winu.
§ Canning comprises two wholly-owned granted exploration licences: Canning
and Salvation Well located approximately 175km south-east of Havieron within
the south-eastern extensions of the Paterson region in Western Australia.
The tenements contain two large magnetic 'bullseye' anomalies similar to the
Havieron deposit magnetic signature.
During the period, Greatland completed diamond core drilling on the Scallywag
exploration licence, with 10 holes completed for over 2,500 metres at the A35,
A34, Pearl and Swan prospects, the results of which were announced in December
2023. The drilling program effectively tested previously defined
electromagnetic and geological targets, building Greatland's understanding of
the structure, stratigraphy and geochemistry of the ground.
Greatland also completed ground magneto-telluric (MT) surveys of the Scallywag
and Canning exploration licences during the period. MT surveys are
considered particularly effective in areas of deep conductive cover when
compared to standard electromagnetic techniques as the signal only traverses
the conductive cover once, reducing the deleterious effect that this has at
the receiver(s). A similar survey conducted in 2022 on the Havieron mining
lease successfully detected the Havieron orebody.
Preliminary modelling of the Scallywag MT survey data indicates a conductor at
depth within a syncline fold structure along trend from Havieron. Optimisation
of the MT modelling is complete and confirms the anomaly as a high priority
drill target for 2024. Further work is targeted at improving the
understanding of stratigraphy and structure to identify Telfer style targets
in the broader Scallywag tenement. Modelling of the Canning MT survey data
did not identify a target.
Ernest Giles
The Ernest Giles project consists of two granted wholly-owned adjoining
exploration licences: Calanchini and Peterswald, and four pending exploration
licence applications: Westwood North, Westwood West, Mount Smith and Welstead
Hill which are located approximately 250km north-east of the town of Laverton
in the Yilgarn region of Western Australia. Ernest Giles is an underexplored
Archean greenstone belt which lies within the highly mineralised Yilgarn
Craton, to the north of the world-class Tropicana and Gruyere gold operations.
During the period important progress was made at Ernest Giles.
In September 2023, Greatland entered into a land access agreement with the
Manta Rirrtinya Native Title Holders. 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.
In November 2023, Greatland completed two diamond core drill holes at the
Meadows prospect at Ernest Giles, co-funded by the Government of Western
Australia's Exploration Incentive Scheme drilling grant. The drilling
results have provided important geological and structural information.
Follow up exploration work including an induced polarization survey and a
reverse circulation program are planned for the second half of calendar year
2024.
Panorama
The Panorama project consists of three granted wholly-owned adjoining
exploration licences: Panorama, Panorama North and Panorama East, located in
the Pilbara region of Western Australia. The tenements are considered by
Greatland to be highly prospective for gold and nickel.
In November 2023, Greatland announced the results of a surface sampling
program at Panorama, with results including 27 soil samples from the Ni_04
prospect returning above 0.1% nickel over a 1.4km strike extent, and a peak
result of 0.3% nickel in a rock chip sample.
These samples sit within the Dalton Suite ultramafics, which the results
confirmed as nickel enriched and a potential primary nickel sulphide host. The
large extent of the prospective Dalton Suite ultramafics within the Panorama
tenure, and the existence of several untested highly prospective conductors,
presents the potential for a substantial nickel discovery at Panorama.
Greatland is now planning its next steps to effectively test both the
geochemical and geophysical anomalies on the tenure.
Bromus
The Bromus project consists of two granted wholly-owned adjoining exploration
licences: Bromus and Bromus West which are considered prospective for nickel,
lithium and gold, located approximately 20km southwest of the town of Norseman
in southern Western Australia.
During the period the lithium prospectivity of the Bromus project tenure was
assessed and on-ground activities planned for confirmation.
CORPORATE
During the period, Greatland continued to advance its preparations for a
proposed cross-listing on the ASX, with significant progress made. In
September 2023, having regard to the listing timetable and activities and
opportunities for the business, Greatland decided to defer the ASX
cross-listing until 2024. Greatland continues to assess the opportunity to
list on the ASX at the appropriate time and is well positioned by the work
undertaken to efficiently resume and complete the ASX listing process.
In September 2023, Greatland entered into a A$50 million (approx. £26
million) unsecured standby debt facility with cornerstone shareholder Wyloo
Consolidated Investments Pty Ltd (Wyloo), providing additional flexibility for
Greatland's funding requirements through 2024. Wyloo currently holds
approximately 8.5% of Greatland shares.
Significant events after the balance date
There were no reportable events since 31 December 2023.
Contact
For further information, please contact:
Greatland Gold plc
Shaun Day, Managing Director | info@greatlandgold.com
Nominated Advisor
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 world gold major, Newmont
Corporation.
Havieron is located approximately 45km east of Newmont's existing Telfer gold
mine. The box cut and decline to the Havieron orebody commenced in February
2021. Total development now exceeds 3,060m including over 2,110m of advance in
the main access decline (as at 31 December 2023). Subject to a positive
feasibility study and Decision to Mine, Havieron is intended to leverage the
existing Telfer infrastructure and processing plant. Access to Telfer would
de-risk the development and reduces capital expenditure.
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.
Consolidated Statement of Comprehensive Income
for the half-year ended 31 December 2023
Note 31 Dec 2023 31 Dec 2022
£'000 £'000
Revenue - -
Exploration and evaluation expenses (2,715) (1,719)
Administration expenses 4 (2,790) (1,799)
Share-based payment expense 5 (1,639) (9,157)
Loss before finance items and tax (7,144) (12,675)
Net foreign exchange gains / (losses) 1,185 (750)
Other income 86 149
Finance income 594 177
Finance costs (187) (180)
Loss before tax (5,466) (13,279)
Income tax expense - -
Loss for the period (5,466) (13,279)
Other comprehensive income:
Exchange differences on translation of foreign operations 1,040 (973)
Total comprehensive income for the period attributable to equity holders of (4,426) (14,252)
the Company
Earnings per share for loss attributable to the ordinary equity holders of the
Company:
Basic and diluted loss per share (pence)((a)) (0.11) (0.29)
The Consolidated Statement of Comprehensive Income should be read in
conjunction with the accompanying notes.
(a) For the purpose of calculating basic earnings per share, the weighted
average number of the Group shares outstanding during the period was
5,078,896,662 (31 December 2022: 4,637,835,742). Dilutive earnings per share
is not included on the basis inclusion of potential ordinary shares would
result in a decrease in loss per share, and is considered anti-dilutive.
Note 31 Dec 2023 30 Jun 2023
£'000 £'000
ASSETS
Exploration and evaluation assets 270 264
Mine development 6 76,903 59,931
Right of use asset 319 418
Property, plant and equipment 75 84
Financial assets held at fair value through profit and loss 83 88
Total non-current assets 77,650 60,785
Cash and cash equivalents 12,666 31,149
Advanced joint venture cash contributions 6,409 12,576
Trade and other receivables 60 116
Other current assets 1,080 414
Total current assets 20,215 44,255
TOTAL ASSETS 97,865 105,040
LIABILITIES
Trade and other payables 4,465 8,511
Lease liabilities 129 128
Provisions 3 186
Total current liabilities 4,597 8,825
Borrowings 7 41,117 41,503
Lease liabilities 189 284
Provisions 2,023 1,950
Total non-current liabilities 43,329 43,737
TOTAL LIABILITIES 47,926 52,562
NET ASSETS 49,939 52,478
EQUITY
Share capital 8 5,091 5,069
Share premium 8 70,998 70,821
Merger reserve 8 27,494 27,494
Foreign currency translation reserve (3,219) (4,259)
Share-based payment reserve 11,828 10,173
Retained earnings (62,253) (56,820)
TOTAL EQUITY 49,939 52,478
Consolidated Statement of Financial Position
as at 31 December 2023
The above Consolidated Statement of Financial Position should be read in
conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
for the half-year ended 31 December 2023
Note Share capital Retained earnings Total equity
£'000
£'000
Foreign currency translation reserve Share- based payment reserves £'000
£'000
£'000
Share premium Merger reserve
£'000
£'000
At 1 July 2023 5,069 70,821 27,494 (4,259) 10,173 (56,820) 52,478
Loss for the period - - - - - (5,466) (5,466)
Other comprehensive income - - - 1,040 - - 1,040
Total comprehensive loss for the period - - - 1,040 - (5,466) (4,426)
Transactions with owners in their capacity as owners:
Share-based payments - - - - 1,688 - 1,688
Transfer on exercise of options - - - - (33) 33 -
Share capital issued 8 22 177 - - - - 199
Total contributions by and distributions to owners of the Company 22 177 - - 1,655 33 1,887
Six months ended on 31 December 2023 5,091 70,998 27,494 (3,219) 11,828 (62,253) 49,939
Share capital Retained earnings Total equity
£'000
£'000
Foreign currency translation reserve Share-based payment reserves £'000
£'000
£'000
Share premium Merger reserve
£'000
£'000
At 1 July 2022 4,071 36,166 225 647 335 (35,718) 5,726
Loss for the period - - - - - (13,279) (13,279)
Other comprehensive income - - - (973) - - (973)
Total comprehensive loss for the period - - - (973) - (13,279) (14,252)
Transactions with owners in their capacity as owners:
Share-based payments - - - - 9,157 - 9,157
Share capital issued 945 34,119 29,393 - - (139) 64,318
Cost of share issue - (30) (2,096) - - - (2,126)
Total contributions by and distributions to owners of the Company 945 34,089 27,297 - 9,157 (139) 71,349
Six months ended on 31 December 2022 5,016 70,255 27,522 (326) 9,492 (49,136) 62,823
The above Consolidated Statement of Changes in Equity should be read in
conjunction with the accompanying notes.
Note 31 Dec 2023 31 Dec 2022
£'000 £'000
Cash flows from operating activities
Loss for the period (5,466) (13,279)
Adjustments for:
Share-based payment expense 5 1,639 9,157
Depreciation and amortisation 82 123
Finance costs 162 -
Other non-cash items 6 (57)
Investing interest income (594) (177)
Unwind of discount on provisions 12 174
Unrealised foreign exchange gain / (loss) (1,208) 721
Lease liability interest expense 6 2
Movement in operating assets / liabilities:
Increase / (decrease) in trade and other receivables 15 (349)
Increase in other current assets (68) (194)
Decrease in payables and other liabilities (2,199) (1,383)
Increase in provisions 21 21
Net cash outflow from operating activities (7,592) (5,241)
Cash flows from investing activities
Interest received 646 177
Payments in advance for joint venture contributions (6,409) (1,900)
Payments for mine development and fixed assets (4,743) (3,609)
Net cash outflow from investing activities (10,506) (5,332)
Cash flows from financing activities
Proceeds from issue of shares 8 199 63,290
Transaction costs from issue of shares - (2,126)
Repayment of lease obligations (56) (114)
Payments for prepaid borrowing costs for debt (823) (166)
Net cash (outflow) / inflow from financing activities (680) 60,884
Net (decrease) / increase in cash and cash equivalents (18,778) 50,311
Effects of exchange rate differences on cash and cash equivalents 295 (873)
Cash and cash equivalents at the beginning of the period 31,149 10,386
Cash and cash equivalents at the end of the period 12,666 59,824
Consolidated Statement of Cash Flows
for the half-year ended 31 December 2023
The above Consolidated Statement of Cash Flows should be read in conjunction
with the accompanying notes.
Notes to the Consolidated Financial Statements
for the half-year ended 31 December 2023
1. Corporate information
The half-year consolidated financial statements of Greatland Gold plc
(Greatland or the Company) and its subsidiaries (collectively, the Group) for
the six months ended 31 December 2023 were authorised for issue in accordance
with a resolution of the Directors on 5 March 2024.
Greatland is a company incorporated in England and Wales whose shares are
publicly traded on the AIM market (AIM: GGP). The nature of the operations and
principal activities of the Company are described in the Directors' Report.
2 Basis of preparation
The consolidated financial statements for the half-year ended 31 December 2023
are general purpose condensed financial statements prepared in accordance with
IAS 34 Interim Financial Reporting and UK-adopted international accounting
standards and are presented in sterling (£). The financial information does
not constitute statutory accounts within the meaning of section 434 of the
Companies Act 2006. The information relating to the half-year periods to 31
December 2023 and 31 December 2022 are unaudited. PKF Littlejohn LLP has
issued an independent review report on the half-year periods 31 December 2023
and 31 December 2022. The review report for 31 December 2023 can be found on
page 18.
The half-year consolidated financial statements do not include all the
information and disclosures required in the annual financial statements, and
should be read in conjunction with the Group's annual financial statements as
at 30 June 2023 and considered together with any public announcements made by
Greatland during the half-year ended 31 December 2023. The annual report of
the Group for the year ended 30 June 2023 is available at
http://greatlandgold.com. The report of auditors on those financial statements
was unqualified.
The accounting policies adopted are consistent with those applied by the Group
in the preparation of the annual consolidated financial statements for the
year ended 30 June 2023. The Group has not early adopted any standard,
interpretation or amendment that has been issued but is not yet effective.
The amounts contained 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.
Going Concern
The Group's principal activities include the development of Havieron. At 31
December 2023, the Group had net current assets of £15.6 million, with cash
of £12.7 million and advanced Havieron joint venture cash contributions of
£6.4 million.
In addition, Greatland has access to a A$50 million (c.£26.8 million) undrawn
standby loan facility with Wyloo Consolidated Investments Pty Ltd (Wyloo) and
a signed non-legally binding Letter of Support from its banking syndicate
comprising of Australian 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 (c.£117.9 million) seven-year syndicated debt and
associated hedging facilities subject to completion of the Havieron
Feasibility Study.
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 subject to an
equity raise or utilisation of the Wyloo debt facility and completion of the
Havieron Feasibility Study allowing access to project financing from the
banking syndicate of A$220 million. The Group is confident that it has the
ability to raise additional equity or debt, if required, as it has
successfully demonstrated in the past.
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, 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 as to 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.
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.
The principal risks and uncertainties for the six month period up to 31
December 2023 remained consistent with trends reported in the 2023 Annual
Report.
3 Segmental information
Operating segments are reported in a manner that is consistent with the
internal reporting to the Board and the executive management team (the chief
operating decision makers). Greatland operates one segment being Exploration
and Evaluation of Minerals and Mine Development in Australia.
4 Administrative expenses
31 Dec 2023 31 Dec 2022
£'000 £'000
Employee benefits expense 1,337 761
Depreciation and amortisation expense 43 112
Other administrative and corporate costs 1,410 926
Total administrative expenses 2,790 1,799
5 Share-based payments
The total expense arising from share-based payment transactions recognised
during the period was as follows:
Note 31 Dec 2023 31 Dec 2022
£'000 £'000
Employee long term incentive plan (a) 1,542 448
Directors' co-investment options (b) - 8,611
Other schemes 97 98
Total share-based payment expense 1,639 9,157
(a) Employee Long Term Incentive Plan (LTIP)
Greatland's Board approved LTIP became effective in February 2022. The LTIP is
designed to provide long-term incentives for employees (including executive
directors) to deliver long-term shareholder returns. Under the LTIP,
participants are granted performance rights or options which vest if certain
performance standards are met. Participation in the plan is at the Board's
discretion and no individual has a contractual right to participate in the
plan or to receive any guaranteed benefits.
Set out below are performance rights and options granted under the Company's
Employee Equity Incentive Plan over ordinary shares which are granted for nil
cash consideration. Management has assessed that non-market and market
conditions are more than probable to be achieved by the expiry date and
therefore the total value of the performance rights incorporates all
performance rights awarded. The expense recorded as share-based payments is
recognised to the service period end date on a straight-line basis as the
service conditions are inherent in the award.
Each performance right and option converts to one ordinary share in the
Company upon satisfaction of the performance conditions linked to the
performance rights. The performance rights do not carry any other privileges.
The fair value of the non-market condition performance rights granted is
determined based on the number of performance rights awarded multiplied by the
Company's share price on the date awarded.
The expense for the period of £1.5 million represents the fair value of the
instruments expensed over the vesting period.
The Group granted the following on 19 September 2023:
§ FY23 Performance Rights: 13,306,047 performance rights on 27 July 2022
under the Greatland LTIP which were in respect of the 2023 financial year. The
amount of performance rights will vest depending on a number of performance
targets during a three year performance period from 1 July 2023 to 30 June
2025. The share-based payment expense to be recognised in future periods is
£0.7 million.
§ Employee Retention Rights: 31,100,000 nominally priced share options of
£0.001 on a once off basis to incentivise retention through a pivotal period
of the Group's growth. Subject to satisfaction of service criteria, the holder
must be employed by Greatland on 28 February 2026 to exercise. The share-based
payment expense to be recognised in future periods is £1.9 million.
§ Employee Co-Investment Options: 302,700,000 grant of premium priced share
options of £0.119 to incentivise retention through a pivotal period in the
Group's growth and align their interests to pursue value growth for all
shareholders. Subject to satisfaction of service criteria, the holder must be
employed by Greatland on 28 February 2026 to exercise. The share-based payment
expense to be recognised in future periods is £5.3 million.
5 Share-based payments (continued)
The fair value at grant date is independently determined using an adjusted
form of the Black-Scholes Model which includes a Monte Carlo simulation model
for the TSR rights. The key assumptions were as follows:
Fair value of performance rights and assumptions 2023 LTIP Retention Rights Co-Investment Options
Grant date 19 September 2023 19 September 2023 19 September 2023
Fair value - market hurdle £0.03875 n/a n/a
Fair value - non-market hurdle £0.07008 £0.07024 £0.01964
Share price at grant date £0.071 £0.071 £0.071
Exercise price £0.001 £0.001 £0.119
Expected volatility 59.17% 69.28% 62.49%
Vesting date 30 June 2025 28 February 2026 28 February 2026
Life of performance rights 10 years 10 years 2.9 years
Expected dividends nil nil nil
Risk free interest rate 4.69% 4.23% 4.49%
Valuation methodology Monte Carlo & Black Scholes Black Scholes
Black Scholes
b) Directors' Co-Investment Options
The Group issued 235,000,000 co-investment options on 12 September 2022 to
four Directors, Mark Barnaba, Elizabeth Gaines, Paul Hallam and Jimmy Wilson.
The co-investment option structure has been designed to create strong and
immediate alignment with shareholders to deliver substantial share price
growth, with the options being set at £0.119, representing a 45% premium to
the equity placement in August 2022 of £0.082. There are no future amounts
associated with these options to be expensed in future periods. The fair value
at grant date was independently determined using a Binomial simulation model.
The key assumptions were as follows:
Grant date & vesting date 12 September 2022
Fair value £0.0366
Share price at grant date £0.0902
Exercise price £0.119
Expected volatility 60%
Life of options 4 years
Expected dividends 0.00%
Risk free interest rate 2.92%
Valuation methodology Binominal
Options
The following table illustrates the number of, and movements in options during
the period:
Weighted average exercise price Half year ended 31 December 2023 Weighted average exercise price Full year ended
31 December 2023 30 June 2023 30 June 2023
Outstanding at the beginning of the year £0.112 261,750,000 £0.026 79,000,000
Granted during the period £0.119 302,700,000 £0.119 235,000,000
Exercised during the period £0.009 (21,750,000) £0.012 (52,250,000)
Forfeited during the period - - - -
Outstanding at the end of the period £0.120 542,700,000 £0.112 261,750,000
Vested and exercisable £0.119 235,000,000 £0.110 256,750,000
5 Share-based payments (continued)
Performance Rights
The following table illustrates the number of, and movements in performance
rights during the period:
Weighted average exercise price Half year ended 31 December 2023 Weighted average exercise price Full year ended
31 December 2023 30 June 2023 30 June 2023
Outstanding at the beginning of the year £0.001 23,500,000 £0.001 23,500,000
Granted during the period £0.001 44,406,047 - -
Exercised during the period - - - -
Forfeited during the period - - - -
Outstanding at the end of the period £0.001 67,906,047 £0.001 23,500,000
Vested and exercisable - - - -
6 Mine Development
31 Dec 2023 30 Jun 2023
£'000 £'000
As at beginning of the period 59,931 35,582
Additions 12,291 23,367
Capitalised borrowing costs 2,893 5,406
Adjustment of currency translation 1,788 (4,424)
As at end of the period 76,903 59,931
7 Borrowings
31 Dec 2023 30 Jun 2023
£'000 £'000
As at beginning of the period 41,503 43,103
Capitalised interest - 45
Effect of foreign exchange revaluation (1,264) 1,661
Adjustment of currency translation 878 (3,306)
Total non-current borrowings 41,117 41,503
The borrowings presented above relate to a loan agreement with Newmont
Corporation (Newmont), through a wholly owned subsidiary, dated 29 November
2020 in respect of Havieron. The loan is fully drawn down. The key terms of
the facility with Newmont 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 SOFR rate plus a margin of 8.26161% annually
and is calculated every 90 days;
§ 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 Loan Agreement;
§ There are no financial covenants.
Unrealised foreign exchange gain of £1.3 million (31 December 2022: £0.7
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 increased during the period from 0.6630 USD/AUD at 30 June 2023 to 0.6840
USD/AUD at 31 December 2023.
Exchange differences arising on the translation of the functional currency of
the Australian subsidiary differing from the Group's presentation currency
resulted in an increase to borrowings of £0.9 million during the year (31
December 2023: reduction of £0.4 million). The exchange rate increased during
the year from 0.5250 GBP/AUD at 30 June 2023 to 0.5366 GBP/AUD at 31 December
2023.
At the end of the period, the Group had A$50 million (c. £26.8 million)
undrawn standby loan facility with Wyloo which is available until 1 December
2024 and matures on 31 December 2024.
8 Equity
Note No. of Shares Share Capital Share Premium Merger Reserve Total
£'000
£'000
£'000 £'000
Balance at 1 July 2022 of authorised fully paid shares 4,070,547,171 4,071 36,166 225 40,462
Issued at £0.001 - Havieron contingent consideration on 2 Aug 2022 (a) 138,981,150 138 - - 138
Issued at £0.082 - from equity raise on 25 Aug 2022 (b) 362,880,180 362 - 29,393 29,755
Issued at £0.078 - from Wyloo subscription on 7 Oct 2022 (c) 430,024,390 430 33,104 - 33,534
Issued at £0.0765 - Havieron 5% option fee to advisor on 11 Nov 2022 13,443,391 13 1,015 - 1,028
Issued at £0.020 - exercise of options on director 9 January 2023 25,000,000 25 25 - 50
Issued at £0.025 - exercise of options on director 9 January 2023 8,750,000 9 210 - 219
Issued at £0.070 - exercise of options on director 9 January 2023 7,500,000 8 45 - 53
Issued at £0.025 - exercise of options on 30 January 2023 5,000,000 5 120 - 125
Issued at £0.03 - exercise of options on 30 January 2023 3,000,000 3 87 - 90
Issued at £0.001 - exercise of options on 13 February 2023 500,000 1 - - 1
Issued at £0.025 - exercise of options on 9 March 2023 1,500,000 2 36 - 38
Issued at £0.03 - exercise of options on 9 March 2023 1,500,000 2 43 - 45
Less: transaction costs on share issue - - (30) (2,124) (2,154)
Balance at 30 June 2023 of authorised fully paid shares 5,068,626,282 5,069 70,821 27,494 103,384
Issued at £0.025 - exercise of director options on 24 September 2023 10 1,500,000 2 36 - 38
Issued at £0.03 - exercise of director options on 24 September 2023 10 1,250,000 1 37 - 38
Issued at £0.0028 - exercise of director options on 1 October 2023 10 14,000,000 14 25 - 39
Issued at £0.014 - exercise of director options on 1 October 2023 10 2,500,000 2 32 - 34
Issued at £0.02 - exercise of director options on 1 October 2023 10 2,500,000 3 47 - 50
Balance at 31 December 2023 of authorised fully paid shares 5,090,376,282 5,091 70,998 27,494 103,583
(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.
(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.
8 Equity (continued)
(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. 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 Rio Tinto Exploration Pty
Ltd (RTX) of A$350,000 which Greatland has elected to settle in shares. As the
farm-in and joint venture agreement was executed during the year, the up-front
payment was capitalised as part of the acquisition costs of the tenements and
recognised in share-based payment reserves until the shares are issued. These
shares to RTX have not been issued at the date of this report.
9 Capital Commitments
As at 31 December 2023, Greatland had contractual commitments to capital
expenditure of £4.8 million (30 June 2023: £4.6 million), including from its
share in the Havieron Joint Venture.
10 Related party transactions
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
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 increased to 3,850,000
ordinary shares representing 0.08% of the total voting rights.
11 Significant events after the reporting date
There were no reportable events since 31 December 2023.
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