Greatland Gold Q1-25 Results

https://youtu.be/T68isuaGZhM

The First Quarter results are out, and they are impressive. In this conversation, Shaun Day, Managing Director of Greatland Gold, discusses the company’s operational performance, financial strength, and strategic plans for growth. He highlights the successful production at Telfer and Havieron, the importance of maintaining a strong cash position, and the strategies in place to manage gold price risks. The discussion also covers the company’s cross-listing plans, resource updates, exploration priorities, and commitment to sustainability and community engagement.

Takeaways
– Greatland Gold exceeded production plans by 21%.
– Operational performance is driven by a focus on fundamentals.
– Financial strength allows for growth and development options.
– Gold price strategy includes put options for downside protection.
– Cross-listing aims to attract Australian institutional investors.
– Resource updates indicate a significant increase in mine life.
– Exploration priorities focus on West Dome and regional opportunities.
– Sustainability efforts include zero lost time injuries this quarter.
– Community engagement is a key part of operational culture.
– Future plans include maintaining productivity and exploring new areas.

Chapters
00:00 Introduction and Historical Figures
03:08 Operational Performance and Key Drivers
05:55 Financial Strength and Growth Options
08:46 Gold Price Strategy and Risk Management
11:59 Cross-Listing and Market Strategy
15:03 Resource and Reserve Updates
17:52 Exploration Priorities and Future Plans
21:02 Sustainability and Community Engagement
23:57 Conclusion and Future Outlook
“We’ve added 18 months of mine life.”
Greatland Investor Announcements: https://greatlandgold.com/investors/regulatory-news/

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Either way, thank you for watching, supporting, and keeping the Greatland conversation alive.

Liam

Transcript:
Liam (00:06.946)
You’re watching Aim On- Air, where specializing in connecting companies with its shareholders is what we do best.

Liam (00:22.03)
Welcome back to the show. Today I’m joined once again by managing director of Great Land Gold, Shaun Day. Shaun, welcome back to the show.

Great to see you again and appreciate you having me back on the Aim On- Air.

It is always a pleasure. Let’s start with something a little different. A question from one of our members. If you could meet any famous person from any point in history, dead or alive, who would it be and why?

Right now, think I’d like to meet Stephen Kotkin. I think he’s just a fantastic geopolitical historian and analyst. But I think if you go back in time, Churchill would be a really good one. Duke of Wellington, another, but that’s a little bit off the cuff without having thought about it.

with too much depth, but those are two, I think, great figures in history.

Liam (01:20.662)
Indeed, thank you very much. Let’s talk about your operational performance. This was your first four quarter as operator of Telfer and Havieron Production exceeded plan by 21 % and an all in sustained cost came in below expectations. What were the key drivers behind that operational outperformance?

Yeah, thanks, Liam. Look, yeah, we were really pleased with the first quarter. It was the first time we had an opportunity to really daylight what Telfer can do as a standalone asset with the right amount of focus. But really, what we did is got back to fundamentals. When you look at Telfer, we did highlight a little bit the improvement in recovery and throughput through the mill.

And that was turning on the second train, but really getting back processing discipline and hygiene at the site. Doing reconciliations all the way back to sale essays, monitoring the grade of what’s going into tails and importantly being responsive to that. Doing grade recovery curves to optimise throughput and recovery on the back of that. That was the focus for us and we walked up throughput a little bit.

In the underground, you saw the increase in development rates per jumbo up to 480 metres. Making the fleet productive was a huge focus for us. And in the open pit, was, we’re just actually renegotiating the contract with McMahon. I think we’ll see some improvements in that. It really was just getting back to absolute fundamentals. We think if we drive productivity increases, the cost structure will be improved with that.

Gold recoveries hit 86.7%, well above pre-acquisition assumptions. What have you done to optimize these levels of recovery?

Shaun (03:16.61)
Yeah, look, the little bit what I just said, it was really just getting back to hygiene around that processing plant, putting pride in the shirt, turning up to work and trying to make a difference. There were some teachable moments very early there where recoveries were low on a day and rather than that being just an accepted part of operation, we expect people to…

to let us know straight away to come to the morning meeting with an explanation that they’ve spent time already understanding what it was and that they understand the fix or they can explain the pathway to it. Mistakes happen, but what we expect is immediate response, immediate focus and immediate commitment to change. And that was maybe a little bit of a mindset shift.

bringing the hygiene around the reconciliations around recovery curves, focusing on making sure the CIL circuit was optimised, were all part of it. But it was really just bringing back the discipline, the operational disciplines to site. So we’re really pleased with that. For good order, it will notch down a little bit recoveries as we come into the next quarter because we’re right at the top of expanding that

west dome open pit. So we’re right at the top of that cutback. So you get the oxide ore right at the top and that will have slightly lower recoveries through the mill. But that’s all right. It will still be higher than it otherwise was. And as we get through that oxide layer, hopefully we’ll walk it back up to these present levels or even beyond as we continue refinement and continuous improvement.

The business delivered 253 million Aussie dollars in free cash flow and now hold 398 million Aussie dollars in cash debt free. How does the financial strength reshape your options in terms of growth and development?

Shaun (05:25.71)
It gives us huge optionality. Firstly, that $253 million, you can see it in the bank account. The bank account is $398 million debt-free. It went from $145 plus $293 $253 to get to the $398 million. So far through the announcement period, we are the number one cash generator in Australia. Only Northern Star to come, think $25 billion market cap.

be interesting to see whether we shaded them as well. So it’s phenomenal what we’ve been able to achieve in that first three months, but we need to string multiple quarters in a row to demonstrate our operational credentials and we understand that that’s an ongoing process. So it’s a focus for us, but what does it do in terms of optionality? We’ve doubled, soon tripled the number of rigs at site.

You don’t drill, you don’t find, so you’ll see that flow through. It allows us to focus on the optimisation opportunities and to do so without the financial constraints that otherwise may apply if we had a heavy debt burden or we weren’t generating this free cash flow. So it accelerates the business plan.

You’ve maintained full upside to the gold price but protected the downside through put options. We talked about it briefly last quarter, but with many new investors joining, could you outline the strategy again, please?

Yeah, thanks, Liam. Look, options are the path of least regret. It’s a right, but not an obligation to sell at that price. So right now, we bought some more put options at $4,200 an ounce Australian. The current market price is about $5,200 Australian. We will continue to deliver at that full market price. That’s wonderful, but we’ve bought insurance.

Shaun (07:23.252)
If the gold price does fall below $4,200, and this is two years out, this is calendar year 26, it means we will still get a minimum of $4,200. And that’s really good because it’s cheap to buy insurance that far out of the money. We’ve paid that, it gives us that protection, and what it allows time is A, we’ll still have a margin of almost $2,000 an ounce at that price.

Plus, it gives us time operationally to adapt to any change in the market. But just like when people buy home insurance, they’re not secretly hoping their house burns down and that they get to claim that insurance. It’s just there for a rainy day. So we love every week, every month where those options expire unused because it means the market price is much higher.

OK, just to follow up on that, would the all in sustained costs cover the cost of the put options? Is that part of that package?

Yeah, correctively.

Even better. Thank you very much. You’ve now formally kicked off the ASX cross-listing process and we now have a timeline to work. Rather than press you into a specific direction, I thought this would a good opportunity for to explain your vision.

Shaun (08:46.434)
Yeah, look, the vision is to be cross-listed, bringing Australian institutional investors and other investors, particularly those that are mandate locked to the ASX, we’ll have indexation buying on the ASX, which we think is attractive, but we’re also grateful and appreciative of the support that we’ve had in London. So we maintain the current listing in London. So it’s a cross-listing where people can trade the same shares either in Australia or in the UK.

and we’ll use ComputerShare, which is an international share register, the one we already use, which will allow people to move their shares between London and Australia, I think within 24 hours. So that’s called fungibility between the two exchanges. So people will have a choice. And over time, maybe the market will stay in London where there’s already deep liquidity, or maybe some of it will move to Australia. We’re somewhat agnostic on that.

All we want to do is kind of track more demand for our stock and we feel the Australian market, the ASX provides that.

While the company has been clear that no capital raise is currently committed, can you help shareholders understand the rationale behind keeping the option open? Some are concerned that future placements could favour institutions at discount. How do you balance that with protecting retail shareholder value?

Well, I think we’ve already come out and said we’re not doing a major primary issue. We don’t want dilution. We have a strong cash balance. In Australia, the ASX can apply the market interest test, where that can be, let’s say, 1 % of your market cap. They can ask you to raise just to demonstrate market interest, as it says, that you are able to attract investment.

Shaun (10:37.184)
it’s potentially that they will waive that, but we can’t be sure that we will get that, that derogation. So fundamentally, we’re working on the basis that we may be required to do that. If we were, you know, Apple or Nvidia or something like that, I suspect that ASX would waive it, whether they do for a mid cap mining company time will tell, but it just gives us the opportunity to do that if needed.

And I think it is tactically sound because going around and being able to tell funds and other shareholders that there might be an opportunity to buy shares is good. It just gives them a reason to spend a bit of time understanding Greatland. And hopefully that means they buy their stock, whether it’s on the exchange, secondary market, I demand on the screen, or whether there’s a little bit of that met with primary issuance. But our philosophy is to minimise that primary issue.

That makes sense. Thank you for the clarification there. The inaugural Telfer MRE added 3.2 million ounces of gold and 117,000 tons of copper and now followed up with your first ore reserve of 712,000 ounces of gold and 23,000 tons of copper. How does this reshape the mine life conversation and what does it tell us about operational continuity?

It tells us a huge amount. The straightaway we’ve come out with the updated outlook which demonstrates the next two years of full production at Telfer and remember at the end of that two-year period there’s still a meaningful amount, another year of reserves sitting in the West Dome open pit plus 19 million tonnes, a full year of processing sitting

as stockpiles at surface with zero mining costs, zero mining risk. Clearly Telfer keeps going. We then bring Havieron online. Once we come out with the feasibility study, we’re in a position where we can show what a combined Havieron and Telfer looks like in not just in the short term, but in the long term. And we’re excited about that prospect. But Telfer is a fantastic endowment. The reasons we’re spinning rigs there.

Shaun (12:53.898)
is we think we’re going to get a return on that investment. So we’re excited about what this looks like, not just in the next two years or four years, but what it looks like for the next two decades and beyond.

In the recent resource and reserve updates, you used a gold price of $3,450 Australian dollars per ounce for the West Dome cutbacks and stockpiles and $3,150 Australian dollars an ounce for the main dome underground. Recognizing the need for conservatism, could you explain how you decide how conservative to be and why those two areas are priced differently?

look, the two areas of price differently really just reflected when we started the work. The gold price kept walking up. I think we ended up with a price which was less than two thirds of the gold price for both values. The work was started on different dates which led to a different value albeit it wasn’t quite mathematical of a two thirds formula.

but the market price does inform you a little bit. So the difference in pricing is just the passage of time. And overall, we think for resource, you wanna use a number which is a bit bigger because you wanna understand the full potential, what the pitch shell could look like. And then when you do a reserve, you want it to be a little bit lower because you wanna have confidence that that will work through the cycle.

If anything, think if we will redo our resource, the number we use right now would be higher. But also when we come to July, August and we see our peer group report, we’ll probably see where others, what approach they have taken. And I think ultimately we think we’ll be mid-pack and about the average of what prices are used. And that’s probably where we’ll try to stay.

Liam (14:53.186)
You’ve just opened a second development drive at West Dome Underground. How does this compare to the first and what’s the end goal? Are we looking at future access point into the deep high grade zone?

Yeah, look, it’s similar to the first in that it drives across. This has a couple of additional benefits. It kind of comes back closer to the in-ground or underground infrastructure, being the underground crusher and shaft. So it’s a nice haulage back from West Dome underground into the shaft to surface, which is straight into the mill. So that’s neat.

It gives us a second pathway out to West Dome. That gives us a second drilling platform, which we’re excited about. But also if we do determine to start mining, it would give us immediate access to start developing through there. So we think the acceleration shows some level of conviction by us around how we see that asset, albeit we have to do another round of drilling.

understand the geotech, particularly understand the hydrology because there’s definitely water out there. There’s waters in all underground mines but we just want to understand that before we take it from opportunity to definitive. But this really accelerates the opportunity to do West Dome in time and again this is a luxury we can afford because we’re operating well and the gold price is high so we want to take advantage of that.

The A Reef and Eastern Stockwork corridor programmes both returned high grade intercepts. How quickly could these zones be incorporated into the mine plan?

Shaun (16:39.896)
Well the A reefs plus the reefs are already existing mining areas. So that’s a relative, just an extension of what we’re presently doing. That Eastern stock work, the ESC, that’s basically just almost a continuation of the reef structure. But this is more of a bulk structure. We’re in the top of that. We think it extends quite deep through the structure down towards the reefs.

So I think there’s a lot of potential there for that to grow. But again, I think we could access that relatively quickly. So if I was to predict a new mining area, I think that ESC would be relatively early in the sequence. And we love creating flexibility in that mine plan, additional working faces. So bringing that ESC on is something we’d like to do in the medium term.

You’ve also just announced a two year outlook for Telfer running through financial year 27 ahead of Havieron integration. Can you walk us through the significance of this and how does it change the narrative from a short term plan to something more long term and sustainable?

Well look, in the space of four months, or bit more than four months, less than five months, we’ve been able to add 18 months of mine life. That’s a really good return in a short period. Look, that’s a wonderful start. I think people were worried about, did Telfer finish before Havieron? There was the mine and the gap narrative. Well, that’s closed. That we think is really important improvement.

it gives confidence to the market, but also to our employees that they’re going to be there for a long time. But again, this is just the starting point. I mentioned before, even at the end of that two year is we still have another year in the West Dome pit. We still have 19 million tonnes at surface. There’s a lot more to come and we’re still drilling to prove up more to a JORC category. And you’re going to see

Shaun (18:49.632)
an acceleration of exploration not a slowing down now that we’ve hit that milestone.

With six rigs on site, the most since 2020, what’s your current exploration priorities across the broader Telfer and Javieron system?

Look, the priorities right now are in that West Dome open pit. We’re seeing a lot of life extension there. And that is our centre of gravity in terms of where we’re mining. So that will continue to be so. And in that main dome underground, but the West Dome underground is less certain, but a glittering prize. So we want to continue to focus on that as well. So that’s where our focus is going to be.

but we’ve also got the broader regional program and there’s a lot of opportunity just on the mining leases. It’s actually got a very big endowment of mining leases which are effectively permitted areas. The Southeast Hub is a good example of that where Thomson’s, Big Tree, there’s all these deposits there. Our regional exploration team is gonna come onto the mining leases and drill them out. It’ll be interesting to see how big they can become.

and whether they get accelerated in the mine plan as well. So there’s multiple fronts we’re trying to walk forward simultaneously. And we’re just delighted to be able to see this size endowment and be able to pursue it.

Liam (20:18.722)
And that’s even before you start looking at tenements that Greatland have held historically and have been continued to drill. So I’m looking forward to seeing how they develop and grow. Outside of the core assets, are there any parts of the portfolio that are starting to show promise?

Look, just think that Ernest Giles one is the one that I think we spend the most time on internally. We’ve just completed a physical mapping across that. We want to understand that area more. think preliminary results on that were really positive. We’d like to get a drill rig out there in the second half of the year. So in addition to doing the regional exploration in the Patterson, kind of around Telfer, Havieron.

I think you’ll also see us spin some rigs on that Ernst-Giles. time will tell where Ernst-Giles goes, but certainly from being an archean greenstone that lights up on geophysics, it’s a tier one target, albeit time will tell.

You reported zero lost time injuries this quarter and signed a new partnership with Ngurra Kujungka How has Greatland embedded sustainability and community into its operational culture?

Look, firstly, we’re really proud about the safety record we achieved. Integrations are not easy. A lot of change for people, a lot of change we’re making at site. It was a high risk period for us and I think it’s just an absolute credit to the team there, the safety team, the site leadership and everyone that we’ve done that safely. So huge accomplishment.

Shaun (22:00.398)
But also, y’know with the Indigenous group, you know, we’re really pleased with that engagement. To be honest there, we’re building off really good strength. think the Telfer has had a good relationship with the local people for a long time. We want to continue to be good custodians of that, of the asset and that relationship with the local Indigenous people. So we’re pleased about how that’s going and we’re pleased with their support.

That’s an ongoing journey and that work will just continue.

Looking ahead to the June quarter, what’s the single most important thing shareholders should be watching for?

look, I think for the June quarter, we just want to be seen as a consistent and reliable producer. So what we’re trying to do is more of the same. We want to continue to see that West Dome operate. We want to continue to focus on the productivity of the processing and of course, continue to walk up productivity in the undergrounds well. So those are the focus for us. And of course, the big change will be adding the ASX listing to the London listing.

So there’s a lot going on, but consistency of operations, we’ve had a good first quarter, we wanna make sure we do that again.

Liam (23:21.004)
And personally for you, what’s been the most rewarding part of this first full quarter under Greatlands ownership.

Look, I think for me and some people who have been on the Greatland journey for a while would know when I joined, I kind of articulated this opportunity to buy Telfer and have Ron consolidate ownership into Greatland where we controlled our own destiny. This is the vision I had. I’m really pleased that we’ve been able to kind of take the company on that journey. I saw the potential of Telfer, which was a bit unloved.

It’s really gratifying to see that start to kind of percolate to the surface in this first quarter and be able to share that with the market and our shareholders. And you’re really grateful for the support that I’ve had on the journey, both in terms of the team, but also with the shareholder based in the kind of Greatland community and stakeholders. for me, it’s been really satisfying to take something that was vision

through to execution and as I said, there’s no relax about execution. There’s more to be done, but it was certainly a cracking start.

Wonderful. Thank you. speaking of the engagement, have you got any plans for any future town halls at the moment?

Shaun (24:43.502)
Sure do, Liam. think people will be up there in May ahead of the scheme meeting and will definitely have a town hall. I think there’s some people trying to work out the logistics and book the room. I think it will be just after the bank holiday, so probably that week if it can be organised. But don’t organise anything yet because it is subject to room availability and a few logistics.

As I say, if that date becomes available, we’ll make sure we add it to the description below for people to follow once it’s announced. Shaun, thank you so much for joining us today, sharing your insights. It’s been a fascinating look at Greatlands first full quarter as an operator and to where things will go from here. Before we wrap up, as always, I’d like to ask any final words you’d like to share with shareholders or anyone who’s watching today.

Thanks Liam, all I think I’ll add is, where we produce some really substantial free cash flow, we comfortably beat market estimates on what Greatland could achieve, so that’s a great credit to the team. But also I think just in terms of the growth, this is a really rare combination of immediate ounces, immediate cash flow generation through Telfer.

But then we actually get better. There’s a step change in terms of ounce grade, lower costs when Havieron comes online. We’ve got 11 full quarters of production from Telfer before the bottom of the J curve, the full point of spending money on Telfer, sorry, on Havieron. Subject to the gold price, we’ve got that debt facility in place, but we’re off to a really good

at saying, we might not need a lot of that debt facility. So self-funding Havieron, I think is another really tremendous opportunity that we have.

Liam (26:47.286)
Amazing. Shaun Day, Managing Director of Greatland. Thank you very much for joining us. And to everyone watching, a special thank you to all my supporters, especially our Silver and Gold members, for making this content possible. If you’d like to support channel and keep interviews like this going, you can do that by buying a copy in link below. Every single one makes difference. Until next time, stay informed, stay engaged, and thank you for watching. As always, my name is Liam, and you’ve been watching AIM On Air, connecting companies to shareholders. It’s what we do best.