Now this could be very interesting.
Greatland Gold said Tuesday that it has entered a farm-in and joint venture agreement with Rio Tinto (ASX:RIO) to speed up exploration across a tenure near the Havieron gold-copper project in WA’s Patterson province and near Newcrest’s Telfer mine.
The mining company said the land package hosts several under-explored anomalies similar to Havieron, which is Greatland’s major discovery and one now 70% owned by Newcrest.
Greatland already holds licences adjacent to the properties through its joint venture with Newcrest, which is soon to be acquired by the world’s top gold producer, Newmont in a $US19.2 billion all paper deal.
The interesting part about this deal is that Newmont has not really mentioned Telfer and the Havieron prospect so far – it has talked about Newcrest’s Lihir gold mine in PNG and the Cadia copper-gold mine in central western NSW as being ‘core’ assets it will be acquiring.
But not the old Telfer mine which will get a new lease on life when the final decision on Havieron is made – if it is made by Newmont.
Rio owns the Winu copper-gold and silver prospect (more than 500 million tonnes) but despite a lot of talk since 2020 about getting it into production by this year or next, nothing has been done and Rio looks like it is spinning its wheels on this one.
That and the questions about Telfer/Havieron’s future makes the Greatland JV look intriguing.
Greatland will be entitled to a 75% interest in Rio Tinto’s 100% owned Paterson South project under the two-stage farm-in deal after spending money.
In the first phase of the farm-in, Greatland can earn a 51% interest in Paterson South project by spending $A7.1 million ($US4.7m) in exploration, as well as drilling 7,500 metres within four years.
Under stage two, Greatland is entitled to earn an additional 24% join-venture interest after investing another $A14 million ($US9m) on the project.
Initial minimum investment needed is $A1.1 million (about $US720,00) as well as 2,000 meters of drilling before the end of next year. Greatland says it will be starting exploration work later in 2023.
“Our farm-in and joint venture with Rio Tinto is consistent with our strategy of continuing to invest in exploration success, and aligns the companies responsible for the discovery of Havieron and Winu, the two biggest and most significant orebodies found within the Paterson Province since Telfer in the 1970s,” Greatland CEO Shaun Day, said in the statement.
Separately, Greatland said ANZ Bank, HSBC Bank and ING Bank Australia had delayed the start date of a $A220 million loan for its 30% portion of the Havieron development and replaced the commitment letter with one of support, giving it more financial flexibility.
The company had done the loan deal in September, 2022 with a commitment letter with the group of lenders for a seven-year proposed debt term.
Greatland Gold said it will only use the funding once the feasibility study being prepared by Newcrest is completed. That is if it is completed or abandoned by Newmont.
The Rio deal raises two prospects – one it is Rio de-risking its involvement in the patterson and pushing Winu back to the future, without a commitment.
Or two, it raises the prospect that Rio could be interest in buying Newcrest out of Telfer and Havieron if Newmont doesn’t want the assets, and using this as a way to improve the outlook for Winu.
Havieron is 45 kms from Telfer and Winu is over 100 kms to the north of both.
There is a further factor here – Greatland is working with Australian banks on an issue and listing here to raise up to $A100 million with the float happening in the third quarter of this year.
Greatland currently has a market value of close to 400 million pounds, or more than $A760 million.
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And two days after the Rio JV was announced, Greatland Gold slipped out another intriguing announcement, this time concerning its Juri JV with Newcrest which is in the Telfer-Havieron area of WA.
Greatland gold revealed that it has swapped management of the Juri JV with Newcrest from July 1 this year. Greatland owns 49% and Newcrest has 51% of the venture that started in late 2020 to “accelerate exploration at the Paterson Range East and Black Hills exploration licences,” according to Greatland.
Greatland CEO Shaun Day said in the statement on Thursday his company welcomed Newcrest elevating its engagement and interest in the Juri Joint Venture property.
“Our partnerships at Havieron and Juri are central to unlocking the full potential of the Paterson Province. Greatland strongly believes in the prospectivity of the Juri Joint Venture tenure and will continue to be an active participant following the upcoming management transition.
“The shift of Juri Joint Venture management to Newcrest provides Greatland’s exploration team the opportunity to put greater focus on our 100%-owned portfolio of highly prospective tenure together with our responsibilities as the new manager of the farm-in and joint venture arrangement with Rio Tinto Exploration on the Paterson South Project.”
“Under the terms of the farm-in and joint venture agreement which governs the Juri Joint Venture, Newcrest could elect to become the joint venture manager at any time following an initial period. Newcrest has now exercised its right to do so and will assume this responsibility from the beginning of the 2024 financial year.
“The transfer of management of the Juri Joint Venture to Newcrest does not affect any of Greatland’s other rights as a joint venture participant.”
He said Greatland intends to continue as an active and supportive joint venture participant given the potential for the discovery of new intrusion-related gold-copper deposits similar to its world class Havieron gold-copper deposit, Newcrest’s Telfer gold-copper mine and Rio Tinto’s Winu copper-gold deposit.”