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Greatland Gold in demand as drilling at Havieron confirms world class potential

Published 21/07/2022, 11:45
Updated 21/07/2022, 12:11
© Reuters.  Greatland Gold in demand as drilling at Havieron confirms world class potential

What it owns

Key licences

The Paterson Project comprises the Havieron, Black Hills and Paterson Range East licences, covering over 385 square kilometres of under-explored ground in the Paterson Province in Western Australia.

Australian gold major Newcrest Mining has a farm-in agreement to explore and develop the Havieron gold-copper project and earn 70% interest in the 12 blocks by spending up to US$65mln.

Panorama consists of three adjoining exploration licences, covering 155 square kilometres, located in the Pilbara region of Western Australia. Greatland Gold Plc (LON:GGPL) has recently identified potential gold targets on both the north-western and southern licence.

Ernest Giles is 250km north-east of Laverton in the Yilgarn in central Western Australia. The project covers approximately 1,370sq km of unexplored Yilgarn Craton hosting greenstone belts and intrusives with over 180km of strike of prospective rocks. Greatland is hoping for a 5mln oz plus deposit.

How it's doing?

A maiden mineral resource for the Havieron deposit in Western Australia came in at 4.2mln ounces of gold equivalent.

The initial inferred resource estimate comprises 3.4mln oz of gold and is centred on the South East Crescent and adjacent Breccia and includes a portion of the Northern Breccia.

Greatland added that mineralisation remains open within four other target regions: South East Crescent and Breccia Zone, North West Crescent, Northern Breccia, and the Eastern Breccia.

Drilling here can grow the resource further, Greatland believes, while there is an additional possibility of conventional bulk underground mining.

The programme for 2021 will involve drilling at the four identified extensions and in-fill work at the South Eastern Crescent.

Mine preparation work is already underway and with a Pre-Feasibility Study at Havieron that will include mineral resource scheduled for late 2021.

Commercial production is expected within two to three years from the commencement of the mine decline.

In December, Shaun Day was appointed as chief executive to replace Gervaise Heddle, who is leaving in March.

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Inflexion points

  • Drilling results are likely to dominate Greatland’s newsflow with so much exploration underway
  • Partners for others of the group’s projects
  • Gold price keeps rising

What the brokers say: Berenberg

"In our view, GGP is one of the most exciting exploration plays globally, as the Telfer Mine is running out of reserves and Newcrest has clearly prioritised the project as a future potential source of higher-grade ore feed."

Berenberg believes another discovery on Greatland's acreage would be transformational for the company.

“Rio Tinto’s Winu project and Havieron have raised interest in what has been a relatively unexplored region due to the high degree of sand cover.”

Outside Havieron, Greatland retains a 100% interest in a number of other projects in the region – including Scallywag, Black Hills and Paterson Range East.

The broker said the maiden resource 4.2Moz at Havieron on a gold equivalent basis (3.4Mlnoz of gold and 160kt of copper) was above its expectations of 3.75Moz and underlines the deposit’s exploration potential.

Based on the average EV/reserve ounce for the Australian mid-tier gold miners at USD696/oz, and assuming a 50% probability weighting, Berenberg said this generates a new price target of 33p/share (from 22p/share).

Read more on Proactive Investors UK

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