Greatland Gold plc
(“Greatland”, “the Group” or “the Company”)
Final Results
Greatland Gold plc (AIM:GGP), the precious and base metals exploration and development company, announces its financial results for the year ended 30 June 2020.
Chairman’s Statement
I am pleased to report on the Company’s audited results for the year ended 30 June 2020.
It has been a transformational year for Greatland Gold plc (“Greatland” or the “Group”). The Havieron gold-copper deposit, purchased as an early stage exploration project in September 2016, has been a game changer for the Company and, as we look to the year ahead, we remain excited by the exploration potential at both Havieron and our other key prospects in the Paterson region.
Greatland completed two successful exploration campaigns at Havieron in 2018, which were instrumental in securing a US$65 million Farm-In Agreement with Newcrest Operations Limited (“Newcrest”), a wholly-owned subsidiary of Newcrest Mining Limited (ASX:NCM). Since Newcrest commenced its exploration programme at Havieron in May 2019, it has completed more than 100,000 meters of drilling at the project.
A series of excellent drill results to date from Havieron have continued to extend the footprint of mineralisation, and an initial resource is on track to be delivered before the end of calendar 2020. Subsequent to the year end, a Mining Lease was granted for the Havieron deposit and work continues at a rapid pace to support the potential commencement of early works activities at Havieron in late 2020 or early 2021.
Our success at Havieron has not dimmed our appetite for discoveries and we are excited by our other exploration prospects, particularly in the Paterson region where Greatland has an entrenched position and is leading a wave of new investment and exploration in the region. Key developments for the year across Greatland’s portfolio of exploration projects are detailed in the Strategic Report, but I would like to briefly note some further highlights.
Havieron and the Paterson region
Excellent progress was made at Havieron over the past 12 months, with Newcrest completing the first two stages of the Farm-in Agreement to earn a 40% interest in the project. Stage three is currently progressing with the exploration programme focused on both infill drilling to deliver an initial resource before the end of this calendar year and step out drilling to define the extent of the mineralised system.
During the year, Newcrest reported a series of excellent exploration results from the drilling campaign at Havieron, with multiple exceptional results from infill drilling, including 109m @ 6.3g/t Au, 0.71% Cu (HAD059). By the end of the financial year, drill results from Havieron had demonstrated improved continuity in the high-grade crescent sulphide zone and extended the strike length of mineralisation to 550 metres in the upper 200 metres of that zone.
Subsequent to the year end, Newcrest has reported three further sets of excellent drilling results which have highlighted the potential for a broad bulk tonnage target at Havieron in the new Northern Breccia zone. The latest set of drilling results included the best intercept to date at Havieron (120.7m @ 9.3g/t Au and 0.18% Cu from 1349.3m - HAD065W2) and identified a potential new target area, the Eastern Breccia. Additionally, infill drilling results since year end have continued to demonstrate geological and grade continuity within the high-grade crescent sulphide zone and surrounding breccia in the south east.
An initial resource for Havieron is expected to be delivered in calendar Q4 2020. Results from Havieron continue to support the ongoing investigation of both high-grade selective and bulk mining methods. Environmental and baseline studies are progressing to support the potential commencement of a decline at Havieron by end of calendar year 2020 or early 2021, subject to market and operating conditions and receipt of all necessary permits, consents and approvals. Newcrest continues to investigate the potential to achieve commercial production within two to three years from commencement of decline.
In addition to exploration activities, progress has been made towards securing the necessary permissions for the commencement of early works activities at Havieron. Notably, in September 2020, the Western Australian Department of Mines, Industry Regulation and Safety (“DMIRS”) granted Mining Lease application 45/1287 for the Havieron gold-copper deposit. Subsequently, a Mining Proposal for early works activities, including the construction of a boxcut and decline at the Havieron deposit, has been lodged with DMIRS.
The intention remains, subject to a positive Feasibility Study outcome, for the ore from Havieron to be toll processed at Newcrest’s Telfer Gold Mine, 45 kilometres to the west of Havieron. There is a clear advantage here for both parties as it lowers upfront capital costs, reduces time to production, and potentially delivers a significantly higher net present value for the project.
In addition to Havieron, Greatland holds an impressive footprint in the highly prospective Paterson region, including several other prospects that display similar geophysical characteristics to the Havieron gold-copper deposit. Our current exploration campaign in the Paterson region, which commenced in late-August 2020, is focused on drill testing high-priority targets within the Scallywag prospect area including Kraken, Blackbeard and London.
Corporate
Greatland continues to invest in its team and infrastructure to ensure we have the right people and processes in place, befitting of the significant leap forward that our company has taken and to match our ambitious plans as we look into the future.
In July 2020, we appointed Berenberg and Hannam & Partners as Joint Corporate Brokers and Financial Advisers as we continue to expand our institutional investor base in line with the development of the Company.
The Company is well capitalised to accelerate its exploration plans in the Paterson region and across its other projects, supported by both a successful fundraise in August 2019 (£3,958,672 net of costs) as well as the exercise of warrants and options through the year (an additional £3,802,724). The Group’s cash deposits stood at £6,022,745 at 30 June 2020.
Greatland is committed to safe, responsible and sustainable exploration and we continue to focus on improving health and safety training and processes, and on further strengthening our relationships with the indigenous communities in the areas that we operate.
COVID-19
On 11 March 2020, the World Health Organisation declared the COVID-19 Coronavirus outbreak to be a pandemic in recognition of its rapid spread across the globe, with over 200 countries now affected. Many governments are taking increasingly stringent steps to help contain or delay the spread of the virus and as a result there is a significant increase in economic uncertainty.
For the Group’s 30 June 2020 financial statements, the Directors have taken into consideration the Coronavirus outbreak and the related impacts concluded there to be no material impact on the recognition and measurement of assets and liabilities. Due to the uncertainty of the outcome of current events, the Group will continue to assess the impact on the Group’s financial position, results of operations or cash flows.
Due to the COVID-19 pandemic, the business experienced some minor delays to exploration activities in some jurisdictions during the year. All projects have followed government requirements and health guidelines while focusing on protecting the well-being of local and indigenous communities. The Company is committed to a safe working environment and has implemented monitoring and preventative measures to mitigate the impact of COVID-19 on its workforce and stakeholders to develop a COVID safe environment that adheres to health and Government advice and restrictions.
Fortunately, Greatland benefits from the remote location of its key operations in Western Australia, where the total number of cases recorded across the entire state is less than 800 in total and daily new cases are in the single figures at present. At Havieron, Newcrest have implemented and maintained measures to reduce and mitigate the risk of the COVID-19 pandemic to its project workforce and key stakeholders, and operations have continued without interruption. Nevertheless, I would like to reiterate that the health and safety of our staff, partners and stakeholders has always been of paramount importance to the board and it is even more so in our focus now.
Looking ahead
Greatland today is a vastly different looking company to what it was a year ago. There is still much work to do, but at Havieron tremendous progress has been made in advancing a potential world class discovery. In addition to our cornerstone project at Havieron, we have several other excellent prospects, including an enviable footprint in the Paterson region, arguably one of the most attractive frontiers in the world for the discovery of tier-one, gold-copper deposits.
On a macro level, strong tailwinds appear to be supporting gold prices, with the increasing uncertainty in global markets due to COVID-19 driving unprecedented fiscal and monetary stimulus. We also believe the gold price will be further supported by supply challenges, as major new gold discoveries in safe jurisdictions become less frequent and reserves at larger deposits are depleted.
The massive strides we have taken over the past year are a credit to our management team and their strategy. With a proven expertise and track record of identifying underdeveloped opportunities in the region, we are in an excellent position to maximise shareholder value.
I would like to end by thanking my fellow Board members, the management team and our staff, for their hard work and commitment to the Company over the past year. Finally, I would like to thank all our shareholders for their support and feedback, and we are delighted that you have been able to share in the Company’s success. We promise we are working tirelessly to ensure the following year will be as successful as this last one has been.
Alex Borrelli
Chairman
Strategic Report
Principal activities, strategy and business model
The principal activity of the Group is to explore for and develop natural resources, with a focus on gold. The Board seeks to increase shareholder value by the systematic evaluation of its existing resource assets, and by acquiring exploration and development projects in underexplored areas.
The Group’s strategy and business model is developed by the Chief Executive Officer and is approved by the Board. The executive directors who report to the Board are responsible for implementing the strategy and managing the business.
The Group’s primary strategy is to advance projects that have potential for the discovery of large mineralised systems (typically considered to be in excess of one million ounces of gold) through the various stages of exploration and development with a view to monetising at least one or more of those projects, whether through an outright sale, joint venture, or spin-out via initial public offering, within a three to five year period.
Business development and performance
The financial year ended 30 June 2020 proved to be a period of exceptional progress for the Company. In particular, the outstanding exploration success at the Havieron Joint Venture in the Paterson region of Western Australia (60% Greatland, 40% Newcrest) continued with infill and step out drilling returning excellent results and expanding the known area of mineralisation.
In addition to the success at the Havieron Joint Venture, significant progress was made at a number of the Company’s other exploration projects. Most notably, a number of high-priority targets with similar geophysical characteristics to the Havieron deposit, were identified by the Company’s ongoing exploration work in the Paterson region.
Further details on the progress at the Havieron Joint Venture and at the Company’s other exploration projects is provided in the “Review of key developments by project” section below.
The Group’s financial position was further strengthened during the year by the successful raise of £3,958,672 of new equity (net of costs) and a further £3,802,724 on the exercise of warrants and options. The Group’s cash deposits stood at £6,022,745 at 30 June 2020 (compared to £2,755,998 at 30 June 2019). These funds will be used to accelerate exploration across key projects, particularly in the Paterson region.
Review of key developments by project
Havieron Joint Venture, Western Australia (60% Greatland, 40% Newcrest)
In March 2019, Greatland entered into a Farm-in Agreement with Newcrest Operations Limited, a wholly-owned subsidiary of Newcrest Mining Limited (ASX:NCM), to explore and develop Greatland’s Havieron gold-copper discovery in the Paterson region of Western Australia. Newcrest has the right to earn up to a 70% interest in a 12-block area, previously within E45/4701, that covers the Havieron target by spending up to US$65m. Newcrest may acquire an additional 5% interest at the end of the Farm-in period at fair market value. The Farm-in Agreement includes tolling principles reflecting the intention of the parties that, subject to a successful exploration programme and feasibility study, the resulting joint venture ore will be processed at Telfer, located 45km west of Havieron.
During the period, Newcrest completed Stage 2 of the Farm-in Agreement. In accordance with the terms of the Farm-in Agreement, Newcrest has earned a 40% interest in the Havieron Project. Newcrest is now progressing Stage 3 work programs including ongoing exploration drilling and studies to support early development options.
In June 2020, a series of agreements were executed in relation to the Havieron project variously between Newcrest Operations Limited, Western Desert Lands Aboriginal Corporation (Jamukurnu-Yapalikunu), the Prescribed Body Corporate for the Martu People of the Central Western Desert region in Western Australia (“WDLAC”), Greatland Gold plc and Greatland Pty Ltd (“GPL”). Newcrest and WDLAC are parties to an Indigenous Land Use Agreement (“ILUA”) which relates to the use of native title land across Newcrest’s current operations at Telfer and its activities within a 60 kilometre radius around Telfer, which includes its exploration activities at Havieron. Under these agreements, the parties have agreed that the ILUA will apply to any future development activities of the Joint Venture Participants (Newcrest and Greatland) at Havieron. The ILUA establishes a comprehensive framework between WDLAC, acting on behalf of the Martu People, and the Joint Venture Participants (Newcrest and Greatland), in regard to any future development activities at Havieron, including mine construction and mine operation.
Subsequent to the financial year end, the Western Australian Department of Mines, Industry Regulation and Safety (“DMIRS”) granted Mining Lease application 45/1287 for the Havieron gold-copper deposit. The Mining Lease covers the 12 block area that is subject to the Farm-in Agreement between Greatland and Newcrest dated 12 March 2019. Subsequently, a Mining Proposal for early works activities, including the construction of a boxcut and decline at the Havieron deposit, has been lodged with DMIRS.
During the year, Newcrest reported a series of excellent exploration results from the drilling campaign at Havieron, with multiple exceptional results from infill drilling, including 109m @ 6.3g/t Au, 0.71% Cu (HAD059). By the end of the financial year, drill results from Havieron had demonstrated improved continuity in the high-grade crescent sulphide zone and extended the strike length of mineralisation to 550 metres in the upper 200 metres of that zone.
Subsequent to the year end, Newcrest has reported three further sets of excellent drilling results which have highlighted the potential for a broad bulk tonnage target at Havieron in the new Northern Breccia zone. The latest set of drilling results included the best intercept to date at Havieron (120.7m @ 9.3g/t Au and 0.18% Cu from 1349.3m - HAD065W2) and identified a potential new target area, the Eastern Breccia. Additionally, infill drilling results since year end have continued to demonstrate geological and grade continuity within the high-grade crescent sulphide zone and surrounding breccia in the south-east.
An initial resource for Havieron is expected to be delivered in calendar Q4 2020. Results from Havieron continue to support the ongoing investigation of both high-grade selective and bulk mining methods. Environmental and baseline studies are progressing to support the potential commencement of a decline at Havieron by end of calendar year 2020 or early 2021, subject to market and operating conditions and receipt of all necessary permits, consents and approvals. Newcrest continues to investigate the potential to achieve commercial production within two to three years from commencement of decline.
Paterson project, Western Australia (100% owned)
The Paterson project, excluding the Havieron Joint Venture, comprises three granted exploration licences (the Havieron, Paterson Range East and Black Hills licences), and one licence application (the Rudall licence application area). The three granted licences and the licence application are located in the Paterson region of northern Western Australia and are 100% owned by Greatland. The four licences collectively comprise approximately 450 square kilometres of ground which is considered prospective for intrusion related gold-copper systems and Telfer style gold deposits.
In June 2020, Newcrest and Greatland entered into a series of agreements in relation to the Havieron licence (E45/4701), including the Tenement Management and Re-Transfer Agreements, in order to support the lodgement of a Mining Lease application for the 12 blocks, at that time within the Havieron licence, that are subject to the Farm-in Agreement with Newcrest dated 12 March 2019. As a result, in September 2020, Mining Lease 45/1287 was granted in respect of the 12 blocks the subject of the Farm-in Agreement in which, at the date of the report is Greatland has a 60% legal and beneficial interest and Newcrest a 40% interest. Greatland retains a 100% interest over the remaining 31 blocks under the Havieron exploration licence E45/4701.
The Havieron, Paterson Range East and Black Hills licences are subject to a right of first refusal in accordance with the Farm-in Agreement with Newcrest dated 12 March 2019. During the Farm-in and Havieron Joint Venture periods, Newcrest have a right of first refusal over the Havieron licence. During the Farm-in period, Newcrest have a right of first refusal over the Black Hills and Paterson Range East licences.
During the financial year, Greatland continued to conduct systematic exploration campaigns across its three granted Paterson licences.
Geophysical surveys, including ground gravity and induced polarization (“IP”), were conducted across the Scallywag prospect area within the Havieron licence (over the areas of the Havieron licence not subject to the Farm-in with Newcrest). A review of the geophysical data highlighted multiple high-priority targets for drill testing, including Kraken, London, Blackbeard and Barbossa.
At Paterson Range East, the Company conducted aeromagnetic and ground gravity surveys which were used for detailed modelling and target generation. The results of these activities identified multiple high-priority targets identified, including several with similar geophysical characteristics to Havieron. Subsequently, a mobile metal ion (“MMI”) geochemical surface soil sampling survey was also completed, with results upgrading the Goliath target and identifying three new additional targets.
During the year, the Company also completed its first drilling campaign at the Saddle Reefs target within the Black Hills licence. Previous field exploration work at Saddle Reefs had successfully identified multiple gold nuggets at surface and established a strike length of high-grade gold mineralisation at surface of up to 800 metres. Two subsequent IP surveys identified a chargeability anomaly over 1.4 kilometres in length, part of which is spatially coincident with the surface gold mineralisation. A drill programme was subsequently designed to test the 1.4km anomaly, which commenced in July 2019. Initial results from the drilling programme confirmed the presence of gold mineralisation at Black Hills with best results including 13m @ 2.01g/t Au from 67m (SRRC012). In addition to the drilling campaign at Black Hills, a subsequent ground gravity survey conducted across the licence area identified three additional targets including the Parlay target.
Subsequent to the financial year end, the Company commenced a drilling campaign in the Paterson, with an initial focus on high-priority targets within the Scallywag prospect area including Kraken, Blackbeard and London. In addition, the Company commenced an Airborne Electromagnetic (“AEM”) survey, covering 1,033 line kilometres across the western portion of the Company’s Paterson project.
Firetower project, Tasmania (100% owned)
The Firetower project is located in central north Tasmania, Australia, and covers an area of 62 square kilometres. Historic drilling at the Firetower prospect has identified significant gold mineralisation from surface (up to 30g/t).
During the year, the Company completed a drilling programme at the Firetower and Firetower East prospects, which included 16 diamond drill holes for over 2,200m of drilling. At Firetower, drilling was done on north-south traverses to test a chargeability anomaly highlighted by an Induced Polarisation (“IP”) survey conducted in 2018. Results from drilling at Firetower confirmed good continuity of mineralisation, with best results including 54.5m @ 1.36g/t Au from surface (2019FTD001) and 13.5m @ 2.44g/t Au from 59.5m (2019FTD011). In addition, the programme defined mineralisation over a strike length of more than 200m, which remains open along strike to the east and west, and also demonstrated a robust southerly dipping mineralised zone up to 50m wide, persisting to depths of 125m, which remains open at depth.
Panorama project, Western Australia (100% owned)
The Panorama project consists of three adjoining exploration licences, covering 155 square kilometres, located in the Pilbara region of Western Australia, in an area that is considered to be highly prospective for gold.
During the period, the Company continued field exploration at Panorama which included field reconnaissance, surface geochemical work and airborne magnetics. The Company completed a systematic, grid based, surface geochemical soil sampling programme at Panorama during July and August 2019 which involved the collection of 468 samples over approximately 4.5km of strike. Results of soil sampling confirmed the presence of gold anomalism along the main mineralised trend previously identified by rock chips and coarse gold (nuggets).
Results from the airborne magnetic survey highlighted a NE-SW oriented anomaly, clearly identifiable from magnetic derivative images, coincident with an anomalous gold trend identified from soil geochemistry.
Ernest Giles project, Western Australia (100% owned)
The Ernest Giles project is located in central Western Australia, covering an area of approximately 850 square kilometres. The Ernest Giles project includes two granted exploration licences (Calanchini and Peterswald Hill), and two licence applications (Westwood North and Westwood West). The eastern Yilgarn Craton is one of the most highly mineralised areas in Western Australia and is considered prospective for large gold deposits.
During the period, Greatland carried out comprehensive geological and geophysical interpretation and targeting and ran historical diamond drill core through Minalyze© analysis. Following a comprehensive review of all data for the Ernest Giles project, the Board decided that the Company should focus on high priority targets within the project and, consequently, the Empress North (E38/3228), Empress (E38/3183) and Ida Range (E38/8134) licences were relinquished, thereby enabling work to be concentrated on higher priority targets within the retained project licences.
Warrentinna project, Tasmania (100% owned)
The Warrentinna project is located 60 kilometres north east of Launceston in north eastern Tasmania and covers an area of 37 square kilometres with 15 kilometres of strike prospective for gold. During the period, Greatland conducted a diamond drilling programme at the Derby North prospect. Drilling intersected high-grade gold mineralisation and increased the depth extent of known mineralization in the area. Best results included 21.7m @ 3.3g/t Au from 9.3m, including 2.2m @ 12g/t Au (2019WTD001), and 43m @ 1.5g/t Au from 10m (2019WTD003). The Company is evaluating the results to assess the project’s potential, referencing Orogenic-type gold occurrences in central Victoria.
Bromus project, Western Australia (100% owned)
The Bromus project is located 25 kilometres south west of Norseman in the southern Yilgarn region of Western Australia. The Bromus project consists of two granted exploration licences, including a new licence, Bromus North (E63/1953), which was granted in September 2019. The two licences cover approximately 84 square kilometres of relatively under-explored greenstone and intrusive granites of the Archean Yilgarn Block at the southern end of the Kalgoorlie-Norseman belt. During the period, Greatland undertook a comprehensive data review, including reprocessing and remodelling of historic data to aide field work. In addition, resampling and analysis of historic drill samples and new soil sampling was also undertaken. Results are being interpreted to assist with future exploration targeting.
The Final Results for the year ended 30 June 2020 will be published on the Company’s website - www.greatlandgold.com, where further details regarding exploration activities during the year can also be found.
Gervaise Heddle
Chief Executive Officer
Well give them shit about it not being correct, they can see the asks and bids, they can see the time and sales going through. Clearly an issue that needs looking at.
#goldgoldgold
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. Interesting, I think