Greatland Gold PLC – 6th October

Liam
You’re watching Aim On Air, where specialising and connecting companies with its shareholders is what we do best.

Liam
Hello and welcome back to Aim On Air, my name’s Liam, and today I’m pleased to be hosting Shaun Day, Managing Director from Greatland. Welcome back to the show, Shaun.

Shaun
Hi Liam, and thanks for having me on the programme again, it’s appreciated.

Liam
It’s always a pleasure. Through the month of September, Greatland delivered nine items to the regulatory news service. I thought it’d be prudent for us to touch base and catch up on the September news. The first one, delivered on the 8th of September, detailed the information contained within the Newcrest shareholder material release. You detailed the approach taken by Grant Samuel to not separately value Havieron. Was this something you expected?

Shaun
Yeah, it was.  Look, I think it is a reasonable way to look at it. Havieron and Telfer are somewhat two sides of the one coin. We expected it to be a sum of the part valuation, and they did that across the asset base, but they have, as you noted, kind of combined Havieron and Telfer into one, which I think is a sensible approach. We obviously would have liked the granularity on Havieron individually. I think what’s important to understand there is I think there was about $543 million of Telfer liabilities, which are included in that combined value of Havieron and Telfer. So it’s not as transparent as we would like, but I think for the purpose, which was to help Newcrest shareholders understand that the takeover by Newmont was sensible and in their interest, I think it did that well. And I think it just re -emphasises that it’s Newcrest’s intention and all the information that they’ve given to their independent expert was that they see the future of Telfer inextricably linked to the development and putting Havieron. into production, which I think is positive.

Liam
Yeah, absolutely. I think that makes sense. Thank you. A few days later, you were on your way to Beaver Creek, Colorado, for the first of two presentations to the mining community. One of the standout slides for me was your favourite slide of the deck, the ounces per vertical metre, which has grown again with the post -MRE drilling being added. What would you have said about this slide?

Shaun
Oh, look, you’re right to describe it as my favourite slide. I think ounces per vertical metre give you a tremendous understanding of an underground mine and really, if it wasn’t too complicated, I’d love to make that ounces per vertical metre over the denominator of strike length. Because the compact nature of this ore body of, say, 650 metres of its width, if you’re comparing to a mine with a strike length of, say, three and a half kilometres, obviously economically, it’s tremendously advantageous to have those ounces in a smaller volume of mining area. So ounces per vertical metre drive your oil and sustaining cost and your capital intensity. So for every metre of vertical decline put in, we will presently be able to access an additional eight, eight and a half thousand ounces of additional gold. And I think that’s an incredible benchmark to have. And there is an opportunity to add to that. And that’s what the addition to that slide was. On the y -axis, we had metres drilled, which delineated that ounces per vertical metre. And then we made that into a stacked bar graph. And I think we used a green shading there to show this is all the additional drilling that’s been done. So you should have confidence that’s going to add ounces on those lateral levels. But particularly at depth, you see a lot more drilling at depth. So you’ll see that eight plus thousand ounces per vertical metre being more consistently demonstrated through the ore body. We think that there’s obviously natural variation, but we think that is increasingly going to be observed through that ore body. So exciting. And the drilling that we’ve done over the last 18 months, I think shareholders and those that are following the R &S announcements will be really pleased with what we’re bringing in there.

Liam
That’s great. Thank you. On the 14th of September, Greatland announced their loan facility with an Australian $50 million facility, unsecured standby debt. What prompted this?

Shaun
Look, it’s good to have a standby facility. It gives us flexibility. Think of it a little bit like insurance. We continue to develop a mine. We’ve got a really good cash balance. But there was some media speculation. Personally, I felt unfounded, suggesting that we were going to raise money. And I felt by announcing that we had both a meaningful cash balance plus a standby, non -dilutive, non -secured debt facility, it perhaps removed any sense of an overhang on the stock. So we really did it for existing shareholders to say there shouldn’t be an expectation that the company needs to rush out and do an equity raise. And hopefully that was perceived as helpful, because I know there had been some speculation and really we wanted to put that speculation to bed.

Liam
That’s totally understandable. Thank you. The next day, you announced that you had applied for four new exploration licences on the ground in the Gascoyne. What did the company like about this area?

Shaun
Yeah, we liked that area a lot. We’d taken a bit of a heat map of prospectivity across Western Australia. We had used a number of tools, including some that I think approach along AI and worked with some external bodies. This was in that heat map of particularly high level of exploration potential. So we were aware of those tenements and were able to get hold of them. We’re kind of excited and I love the initiative by the exploration team about wanting to bring that in and upgrade their portfolio. And really, we want to be active managers of our portfolio of assets. So whenever there’s an opportunity to upgrade, we want to take that opportunity with both hands. And I think we’ve been able to do that a little bit this year. I think Flynn Gold are a better holder of those Tasmanian assets. We still like them and we wish Flynn every success. And I think they’ve had some success in their portfolio and we’re shareholders there to share that. Equally, we think this really fitted our wheelhouse and our understanding of the geophysics, which is really what our team spends a lot of time thinking about. And there’s some other assets in the portfolio that we’ll continue to analyse and understand whether we think they have the same potential. But we make no secret that we love what we have in the Patterson. We love that Ernst Giles ground. And if we can get more ground of that calibre, I think we’re always going to grab that with both hands.

Liam
Absolutely. On the 18th, you presented at the Denver Gold Forum with an updated presentation. Is it fair to say that the Denver Gold Forum is bigger than diggers and dealers or is it the same but just different?

Shaun
Yeah, it’s an interesting question. I’ve probably got a little bit of a bias towards my home court there with the diggers and dealers being based in Perth. But look, I think they’re different. I think is what you said there, Liam. And I think you’re exactly right. I think there are more fund manager meetings in Denver and that’s really why we attend to access just a large number, particularly of USA or North American based. But also there is a number of fund managers that’s come in from other places around the world, including Australia and Europe. So it is a very productive way to meet a large number of funds in a relatively short space of time. Diggers, as we call it colloquially, I think also has some access to fund managers, some that became shareholders in Greatland. So we’re really grateful for that opportunity. But there’s a lot more sector involvement there. So there is a fantastic opportunity to network within the sector at the diggers event. So both play a slightly different role. But I think they both complement each other really well.

Liam
That makes sense. Thank you. The RNSs keep on coming. And on the 19th of September, you announced a grant of employee incentive options. A compromise of financial year 23 performance rights, retention rights and co -investment options. These were described as collectively are an important element in the attraction and retention of individuals pivotal to Greatland’s growth and their alignment with shareholders outcomes. What does this mean?

Shaun
Well, we brought in some directors. Effectively, they started in January, Mark and Elizabeth, and they had some out of the money options. This aligns the management team with that same strike price, which is very meaningfully out of the money. I think it’s a demonstration of what we hope to achieve with this platform. I think if we make those options valuable, I think all shareholders would somewhat be rejoicing. And that is our clear intent. And there’s alignment between board management and shareholders to achieve that. It’s also, look, there’s no secret. The Australian resource market right now is a super crowded place. You’ve got a sequence of new developments, certainly across Western Australia. And so attracting talent is incredibly difficult and retaining that talent. I think Greatland has done no less than an exceptional job at doing that, both across the board and the management team. And this was a way to, you know, and part of what we had told people we hope to do for them is attracting them, but also to lock them in for a period of time, to lock them in to deliver Havieron, but also to do that in a way that didn’t put immediate cash requirements on the company. Indeed, if those options are exercised, and we really hope they are, it’s actually a meaningful equity raise for the company. So we think it’s a really nice fit, but it’s about alignment and also having the team that can deliver full value for shareholders.

Liam
Yeah, I understand. Thank you very much for clarifying that one. On the 20th, it was announced that you had made the first agreement by the, and I’m really sorry if I make a bit of a mess of this, Manta Rinitinia, a native title holder, and that you’re going to be exploring Ernest Giles as a priority. Will that mean you might get a drill into the ground before Christmas after all?

Shaun
Well, that’s been my intent all year. So, well, so first I think you did very well with the pronunciation there, which I’m not going to seek to replicate. So look, we really appreciate that. This is the first agreement they’ve ever done to allow a land access agreement. We think the team here has done a really tremendous job at creating relationships with our First Nation stakeholders and landholders. So, yeah, we’re really wrapped to have achieved this. This I think took over five years to achieve and the last two and a half years of that with me. So it is something a little bit special to have achieved it and a great credit to the exploration and heritage team that we have here. So we’re really, at the start of the year, as I said, I think we set ourselves an ambitious target to drill this calendar year. We’re still haven’t achieved that, but it feels like we might get there. We do need to get cultural heritage approval on the areas that we need to drill. We had some really helpful discussions through the Whakamura Aboriginal Corporation to achieve that. It’s not a slam dunk that it will happen this year, but we certainly think we’ve given ourselves every opportunity to achieve that, but there’s still some wood to chop to actually get that done this year, but the targets there are exceptional. I think I’ve said before the geophysics that’s historically been done there lights up like a Christmas tree. Our key and greenstones in Western Australia are prolific. This is a great drilling address. We’re excited and we certainly are doing our level best to drill there this year and we’re not changing the guidance yet. Nor should people take it that it’s certain to happen, but I think we’ve given ourselves every opportunity from here to achieve it.

Liam
That sounds very positive. I’m really excited to find out what’s really going on under that cover when you do get those drills into the ground. Last but not least, we conclude the run of current RNSs with two of our directors exercising options. Does this mean the current closed period has now ended?

Shaun
Yeah, correct. So that meant that the directors could exercise those options and I think they increased their shareholding by doing that, but also covered the exercise price and tax, as I understand it, which seemed reasonable, but they held their underlying net positions in Greatland shares, which was very good of them to do. So we felt that was positive, albeit I recognise whenever there’s selling that’s unwelcome equally. But I think a positive net outcome there. Yes, we are in an open period, but then again, we’re in a closed period 30 days before our 30 June 2023 financial statements. So that period was not a long window given the nature of the UK system where you have mandatory closed periods around statutory reporting. So it is, these windows are shorter than maybe people appreciate.

Liam
Yeah, no, that does make sense. And that brings me to the end of my questions. Thank you for your time, Shaun Day, Managing Director of Greatland Gold.

Shaun
Liam, thanks again. And thanks very much for people who have tuned in. I appreciate the support and the interest.

Liam
Thank you. Sadly, that’s the end of the webcast, ladies and gents. If you want to reach out to us, you can contact us on Twitter with the address on the screen. And before I close this page, I’d be grateful of any thumbs ups. Till next time, my name’s Liam, and you’ve been watching Aim On Air, where specialising and connecting companies with its shareholders is what we do best. Thank you.