LA Private

Positive aspects of Newcrest deal

There are some significant developments taking place in relation to the potential merger between Newcrest (ASX:NCM) and Newmont, as well as the future of the Havieron gold copper prospect. However, it is important to present the information in a more positive and optimistic light. 

Newcrest and Newmont are currently finalising the financial and operational details of the US$17.8 billion offer from the esteemed American mining company. While navigating the merger talks, both companies are facing some challenges that require their attention.

One of these challenges arises from a dust pollution issue at the Cadia gold copper mine in Central Western NSW. However, this matter is expected to be resolved through increased investments and thorough studies, with the support of diligent regulators who are determined to see the problem resolved. Once the bid goes through, it will become Newmont’s responsibility to address and rectify the situation.

In addition to the dust pollution issue, there is another development that is placing additional pressure on the ongoing merger discussions. Greatland Gold, the 30 per cent shareholder in the Havieron gold copper prospect near Newcrest’s Telfer mine in outback WA, has recently reported promising assay results from their latest drilling campaign.

These new assay results indicate the potential for an expansion of the Havieron project, revealing high-grade gold and copper intercepts. Furthermore, the development of the mine has reached an impressive depth of over 2.4km, with the main access decline extending more than 1,700m. If the merger proceeds, this access tunnel will serve as the primary entry point to the underground mine.

While there are uncertainties regarding Newmont’s stance on the future of Havieron, it is worth noting that the project holds the potential to produce both copper and gold, which aligns with Newmont’s interest in increasing its exposure to the red metal. This could prove beneficial, considering Newmont’s current copper shortage.

Greatland Gold’s Managing Director, Shaun Day, expressed satisfaction with the progress made at Havieron and highlighted the impressive widths and high-grade nature of the South East Crescent, where the recent drilling took place. These positive results will be incorporated into an optimised Feasibility Study, which has experienced some delays due to the ongoing Newmont takeover.

The mineral resource estimate released by Newcrest and Greatland Gold in early 2022 showcased substantial growth in Havieron’s total endowment, including both ore reserves and gold content. The estimate now stands at 5.5 million ounces of gold and 218,000 tonnes of copper, equivalent to 6.5 million ounces of gold equivalent (AuEq). This represents a 47 per cent increase from the previous estimate, with a significant rise in indicated gold ounces.

Notably, the South East Crescent zone, which has been the focus of recent drilling, contributed to the increase in mineral resources. The zone contains 33 million tonnes grading 3.28 g/t gold and 0.48 per cent copper, corresponding to 3.5 million ounces of gold and 158,000 tonnes of copper, or 4.2 million ounces of Gold Equivalent.

Furthermore, Havieron’s probable ore reserves have risen by 70 per cent, now standing at 2.4 million ounces of gold and 109,000 tonnes of copper, or 2.9 million ounces of AuEq. This increase is attributed to the conversion of 86 per cent of the indicated resources into probable reserves, resulting in a 50 per cent growth in contained gold ounces.

These developments at Havieron demonstrate the potential for future success and emphasise the significant growth in mineral resources. As Newcrest and Newmont continue their merger discussions, the positive prospects of the Havieron project add to the overall value and potential of the deal.