TIDMGGP
RNS Number : 5093S
Greatland Gold PLC
14 July 2022
14 July 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK MARKET ABUSE REGULATIONS. ON PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION
IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
Greatland Gold plc
("Greatland" or "the Company")
Successful renegotiation of contingent consideration due under
original 2016 Havieron acquisition
Vendor has agreed to a two-year restriction on dealing with the
Greatland shares to be issued, reflecting their support for
Greatland and conviction in the Havieron project
Reduction of 4.5% in the number of Greatland shares to be
issued
a saving of over 6.5 million shares
Greatland shares to be issued by 29 July 2022
Greatland Gold plc (AIM:GGP) is pleased to announce it has
successfully renegotiated its obligations with respect to the
contingent consideration due under the original 2016 acquisition of
the Havieron project.
The requirement to pay the contingent consideration, in the form
of Greatland shares, remains from the highly value accretive
acquisition by Greatland of Havieron.
The consideration for this 2016 transaction comprised an initial
payment of AUD25,000 in cash and 65,490,000 new ordinary shares and
(originally) a further 145,530,000 new ordinary shares conditional
upon Greatland's ownership interest in Havieron reducing to 25% (or
less) or upon a decision to mine at Havieron (whichever occurs
earlier). This latter tranche of shares (modified as described
below) will be issued to the vendor's nominee, a private Australian
investment vehicle, Five Diggers Pty Ltd.
In return for removing the conditionality on the contingent
element of the consideration, the following modifications have been
agreed:
-- a two-year restriction on dealing with the Greatland shares
to be issued to Five Diggers Pty Ltd, comprising:
- 12-month lock in, which prohibits any disposals of the shares
in this period, subject to carve outs (such as recommend
takeovers), plus
- a subsequent 12-month orderly market arrangement, requiring
that, during this period, the shares may only be traded in
consultation with the Company's broker and through the Company's
broker (subject to customary carve outs); and
-- a reduction in the number of shares being issued by 4.5%,
being a reduction of over 6.5 million shares, to a total of
138,981,150 new ordinary shares (with a value of approximately
GBP14.1 million in aggregate at 10.15p per ordinary share, based on
the closing price on 13 July 2022, and representing approximately
3.3% of Greatland's enlarged issued share capital).
Shaun Day, M anaging Director of Greatland Gold plc, commented:
"This is an excellent outcome, simultaneously removing the
uncertainty of this long-standing share issue, reducing shareholder
dilution by decreasing the number of shares being issued and
introduces a two-year restriction on dealing with the shares.
"The acceptance of these terms demonstrates the confidence Five
Diggers has in Greatland, together with their conviction in the
Havieron project, reflecting the tremendous evolution in its
understanding and potential .
"Resolution of this share issue is timely given the current
process under the JVA to determine the option exercise price for
the 5% interest and with a Feasibility Study expected to be
released in the December 2022 quarter.
"Resolving transition issues such as this share issue has been a
priority and I'm very pleased with the outcome which improves and
brings to final resolution this long outstanding contractual
obligation."
Peter Davis, from Five Diggers commented: "We have been
thoroughly impressed with the rapid progress and growth of Havieron
since acquisition by Greatland and we are pleased to become a
shareholder in Greatland. Our intent is to be a long-term
shareholder in Greatland and participate in its value creation as
the full potential of Havieron and its exploration holdings are
revealed."
Amended acquisition terms
The purchase consideration was previously payable by Greatland
in two tranches:
-- Tranche 1: Paid in 2017 at completion of the acquisition,
being the issue of 65,490,000 Greatland fully paid ordinary shares
and AUD25,000 in cash; plus
-- Tranche 2: An additional 145,530,000 Greatland fully paid
ordinary shares which was payable conditional on Greatland's
ownership interest in Havieron reducing to 25% (or less) or a
decision to mine at Havieron (whichever occurs earlier).
The revised arrangement signed with Pacific Trends Resources Pty
Ltd and Five Diggers Pty Ltd announced today resolves and amends
the Tranche 2 consideration, by reducing the Greatland shares to be
issued to 138,981,150 fully paid ordinary shares, introduces a
two-year trading restriction not previously contemplated in the
transaction and removes the contingent triggers for the share
issuance. The 138,981,150 Greatland shares will now be issued by 29
July 2022.
The Greatland shares will be issued to the vendor's nominee,
Five Diggers Pty Ltd, which is a private Australian investment
vehicle and which has signed a lock-in and orderly market agreement
with the Company.
Admission of shares and total voting rights
The new ordinary shares will be issued by no later than 29 July
2022 and application for these shares to be admitted to trading on
AIM will be made as soon as practicable thereafter.
Following Admission, the total issued share capital of the
Company will consist of 4,209,528,321 ordinary shares. As each
ordinary share carries the right to one vote, the total number of
voting rights in the Company will be 4,209,528,321. This number may
be used by shareholders as the denominator for the calculations by
which they will determine if they are required to notify their
interest in, or a change to their interest in, the Company under
the FCA's Disclosure and Transparency Rules.
Background to the Havieron acquisition agreement
The Havieron exploration licence (E45/4701) was originally
acquired by Greatland in 2016 from Pacific Trends Resources Pty
Ltd, as referenced in the announcement of 26 September 2016.
The original area of E45/4701 included both:
-- the area which is now the subject of the Havieron mining
lease (M45/1287) and on which the Havieron Project is located;
and
-- the remaining area of E45/4701 on which the Company's 100%
owned Scallywag Project is located.
Background to the Havieron Project
The Havieron Project is located on mining lease 45/1287 which is
held by the Joint Venture between Greatland and Newcrest Mining
Limited ("Newcrest"), Australia's largest gold producer. Greatland
holds a 30% interest in the Havieron Project through the Joint
Venture (Newcrest 70%).
The Havieron Project is currently in development. Newcrest
assumed management of the Joint Venture in March 2019 and has since
been undertaking the ore body definition and technical studies
required to support regulatory approvals and investment decisions
for a staged development plan. The Havieron Project, which contains
a world class ore body, provides Greatland with a strategic
position in the Paterson Province of Western Australia, one of the
leading frontiers for the discovery of tier-one gold-copper
deposits.
The Stage 1 Pre-Feasibility Study (PFS) on only the South-East
Crescent of the Havieron deposit was released on 12 October 2021.
The PFS outcome was positive, showing that a fraction of the
initial resource supported the total capital of the project,
justifying a fast start approach to early cashflow generation and
reinvesting back into Havieron development and infrastructure. This
supports the Company's belief that the profile of Havieron makes it
a globally unique opportunity for bringing a low risk, low capex
tier-one gold-copper mine into production.
In December 2021, Newcrest issued a notice to the Company to
begin the process under the Joint Venture Agreement (JVA) to agree
or determine the exercise price for its option to acquire an
additional 5% interest in the Joint Venture from Greatland, as
determined under the JVA principles.
Proceeds from the exercise will first be used to repay the
outstanding balance under the existing Newcrest loan facility. If
the option referred to above is exercised, Newcrest will be
entitled to an overall joint venture interest of 75% (Greatland
25%).
In addition, on 3 March 2022 Greatland announced an independent
Havieron Mineral Resource update. This increased the Mineral
Resource, including Ore Reserves, to 5.5 million oz Au and 218kt Cu
or 6.5M oz AuEq, an increase of 2.1 million oz AuEq since the last
Mineral Resource update. Probable Ore Reserves now stand at 2.4
million oz Au and 109kt Cu or 2.9M oz AuEq compared to the 1.7
million oz AuEq in the Initial Ore Reserve estimation. In addition
to the Mineral Resources within the Havieron Breccia complex,
growth drilling has now defined an initial Mineral Resource within
the separate Eastern Breccia complex. This is the first Mineral
Resource in a mineralised system outside the Havieron Breccia
system and remains open at depth and to the south. This Eastern
Breccia Mineral Resource does not capture the recent high-grade
intercepts to its south, which is of similar grade to the
South-East Crescent Zone. The updated Mineral Resource incorporated
an additional ten months of consistently impressive drilling
results since the February 2021 drilling cut off used for the last
Mineral Resource update.
The Company's 30% interest in the Havieron Project had a book
value of approximately GBP22.8 million as at 31 December 2021
(unaudited ), which is largely made up of capitalised costs. The
loss attributable to Greatland's interest in Havieron for the
financial year ended 30 June 2021 and the 6 months to 31 December
2021 was approximately GBP0.2 million and GBP0.9 million mainly
relating to foreign exchange losses as a result of the US
denominated project loan and new greenfield exploration costs
testing geological targets outside the known Havieron system
including Zipa which, in accordance with the Company's accounting
policy, is expensed .
Background to the Scallywag Project
The Scallywag licence is 100% owned by Greatland, which formed
part of the Company's original acquisition of the Havieron licence,
sits adjacent to the Havieron mining lease, containing a further
20km of strike of Yeneena Group metasediments located directly to
the north-west of Havieron. Based on geological interpretation of a
comb ination of gravity, magnetic and airborne EM datasets,
Greatland has identified multiple targets on this project area.
Under the Company's accounting policy for exploration and
evaluation expenditure, the Company does not capitalise the
exploration and evaluation costs until commercial viability of
extracting the mineral resource are demonstrable (at which point,
the Group considers it probable that economic benefits will be
realised). Based on this accounting treatment, the Scallywag
Project had nil book value as at 31 December 2021 (unaudited). The
expenditure attributed to Greatland's interest in the Scallywag
Project for the financial year ended 30 June 2021 and the 6 months
to 31 December 2021 was approximately GBP1.0 million and GBP0.9
million respectively, with all project costs expensed.
Competent Persons' Statements for JORC 2012 Mineral Resources
and Ore Reserves
The information in this document that relates to the Mineral
Resources and Ore Reserves for Havieron is extracted from the RNS
announcement titled "Updated Mineral Resource substantially
increases Havieron Resource and Reserve" released on 3 March 2022,
and available on Greatland's website. The Company confirms that it
is not aware of any new information or data that materially affects
the Mineral Resources and Ore Reserves for Havieron in the original
RNS announcement.
Forward Looking Statements
This document includes forward looking statements and forward
looking information within the meaning of securities laws of
applicable jurisdictions. Forward looking statements can generally
be identified by the use of words such as "may", "will", "expect",
"intend", "plan", "estimate", "anticipate", "believe", "continue",
"objectives", "targets", "outlook" and "guidance", or other similar
words and may include, without limitation, statements regarding
estimated reserves and resources, certain plans, strategies,
aspirations and objectives of management, anticipated production,
study or construction dates, expected costs, cash flow or
production outputs and anticipated productive lives of projects and
mines. These forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause actual
results, performance and achievements or industry results to differ
materially from any future results, performance or achievements, or
industry results, expressed or implied by these forward-looking
statements. Relevant factors may include, but are not limited to,
changes in commodity prices, foreign exchange fluctuations and
general economic conditions, increased costs and demand for
production inputs, the speculative nature of exploration and
project development, including the risks of obtaining necessary
licences and permits and diminishing quantities or grades of
reserves, political and social risks, changes to the regulatory
framework within which Greatland operates or may in the future
operate, environmental conditions including extreme weather
conditions, recruitment and retention of personnel, industrial
relations issues and litigation.
Forward looking statements are based on assumptions as to the
financial, market, regulatory and other relevant environments that
will exist and affect Greatland's business and operations in the
future. Greatland does not give any assurance that the assumptions
will prove to be correct. There may be other factors that could
cause actual results or events not to be as anticipated, and many
events are beyond the reasonable control of Greatland. Readers are
cautioned not to place undue reliance on forward looking
statements, particularly in the current economic climate with the
significant volatility, uncertainty and disruption caused by the
COVID-19 pandemic. Forward looking statements in this document
speak only at the date of issue. Greatland does not undertake any
obligation to update or revise any of the forward looking
statements or to advise of any change in assumptions on which any
such statement is based.
Enquiries:
Greatland Gold PLC +44 (0)20 3709 4900
Shaun Day info@greatlandgold.com
www.greatlandgold.com
SPARK Advisory Partners Limited (Nominated
Adviser)
Andrew Emmott/James Keeshan +44 (0)20 3368 3550
Berenberg (Joint Corporate Broker and Financial
Adviser)
Matthew Armitt/Jennifer Lee/Detlir Elezi +44 (0)20 3207 7800
Canaccord Genuity (Joint Corporate Broker
and Financial Adviser)
James Asensio/Patrick Dolaghan +44 (0)20 7523 8000
Hannam & Partners (Joint Corporate Broker
and Financial Adviser)
Andrew Chubb/Matt Hasson/Jay Ashfield +44 (0)20 7907 8500
SI Capital Limited (Joint Broker)
Nick Emerson/Sam Lomanto +44 (0)14 8341 3500
Luther Pendragon (Media and Investor Relations)
Harry Chathli/Alexis Gore +44 (0)20 7618 9100
Notes for Editors:
Greatland Gold plc (AIM:GGP) is a mining development and
exploration company with a focus on precious and base metals . The
Company's flagship asset is the world-class Havieron gold-copper
deposit in the Paterson region of Western Australia, discovered by
Greatland and presently under development in Joint Venture with
Newcrest Mining Ltd.
Newcrest holds a joint venture interest of 70% (30% Greatland).
Newcrest may also acquire an additional 5% joint venture interest
and, if exercised, Newcrest will be entitled to an overall joint
venture interest of 75% (Greatland 25%).
Havieron is located approximately 45km east of Newcrest's Telfer
gold mine and, subject to positive decision to mine, will leverage
the existing infrastructure and processing plant to significantly
reduce the project's capital expenditure and carbon impact for a
low-cost pathway to development.
An extensive growth drilling programme is presently underway at
Havieron with a focus to continue to expand our understanding of
this world class ore body. Construction of the box cut and decline
to develop the Havieron deposit commenced in February 2021.
Greatland has a proven track record of discovery and exploration
success. It is pursuing the next generation of tier-one mineral
deposits by applying advanced exploration techniques in
under-explored regions. The Company is focused on safe, low-risk
jurisdictions and is strategically positioned in the highly
prospective Paterson region. Greatland has a total six projects
across Australia with a focus on becoming a multi-commodity mining
company of significant scale.
This information is provided by RNS, the news service of the
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END
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