12 March 2019
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR).
Greatland Gold plc
("Greatland" or "the Company")
Greatland Gold Signs US$65m Farm-In Agreement with Newcrest to Advance Havieron
Farm-in agreement includes Joint Venture and Tolling Principles which reflect the intention of both parties that, subject to a successful exploration program and positive Feasibility Study outcome, ore from the proposed Havieron Joint Venture will be toll processed at Newcrest's Telfer Gold Mine
Additionally, during the farm-in period, Newcrest will have a first right of refusal over the remainder of Greatland's Paterson project (Black Hills, Paterson Range East and remaining areas of Havieron licence)
Greatland Gold plc (AIM:GGP), the precious and base metals exploration and development company, is pleased to announce that the Company, and its wholly-owned subsidiary Greatland Pty Ltd, have signed a farm-in agreement with Newcrest Operations Limited ("Newcrest"), a wholly owned subsidiary of Newcrest Mining Limited (ASX:NCM), Australia's leading gold producer and one of the world's largest gold mining companies, to explore and develop Greatland's Havieron gold-copper project in the Paterson region of Western Australia (the "Farm-In Agreement").
Highlights of the Farm-In Agreement
· Newcrest has the right to acquire up to a 70% interest in 12 blocks within E45/4701 that cover the Havieron target (the "Tenement Blocks") by spending up to US$65m (roughly £50m or AUD$90m) and completing a series of exploration and development milestones in a four-stage Farm-in over six years.
· After meeting the milestones in the four-stage Farm-in (set out below), Newcrest has the option to acquire an additional 5% interest at fair market value taking Newcrest's interest in the Farm-in to 75%.
· Newcrest will have the right but not the obligation to acquire up to an initial 70% Farm-in Interest in the Tenement Blocks in accordance with the following four-stage farm-in procedure:
o Stage 1: Newcrest incurs US$10 million in expenditure (inclusive of the Minimum Commitment of US$5 million) in relation to the Tenement Blocks (the "Stage 1 Commitment") within a period of 12 months;
o Stage 2: If Newcrest incurs an additional US$10 million in expenditure in relation to the Tenement Blocks (the "Stage 2 Commitment") within a period of 12 months from the date following satisfaction of the Stage 1 Commitment, Newcrest will earn a 40% Farm-in interest;
o Stage 3: If Newcrest incurs an additional US$25 million in expenditure in relation to the Tenement Blocks and delivers a Pre-Feasibility Study for a project on the Tenement Blocks (the "Stage 3 Commitment") within a period of 24 months from the date following satisfaction of the Stage 2 Commitment, Newcrest will earn an additional 20% Farm-in Interest (cumulative 60% Farm-in interest);
o Stage 4: If Newcrest completes and delivers, or incurs no less than US$20 million in expenditure toward the carrying out of, a Feasibility Study for a project on the Tenement Blocks (the "Stage 4 Commitment") within a period of 24 months from the date following satisfaction of the Stage 3 Commitment, Newcrest will earn an additional 10% Farm-in Interest (cumulative 70% Farm-in interest).
· Newcrest must incur US$5m in expenditure within 12 months of the Farm-in commencing (the "Minimum Commitment").
· Newcrest will act as Manager during the Farm-in period and it is expected that drilling at Havieron will recommence in April 2019, under Newcrest's management and at Newcrest's expense, and subject to Newcrest receiving all required regulatory and heritage approvals.
· The current intention of both parties is that, subject to a positive Feasibility Study outcome, the ore from the proposed Havieron Joint Venture will be toll processed at Newcrest's Telfer Gold Mine ("Telfer"), which sits approximately 45km to the west of Havieron, delivering material economic and operational benefits for both parties. These include:
o lower upfront capital costs (no requirement to build a new processing plant);
o ability to leverage all existing infrastructure at Telfer (roads, airport, power, water);
o reduced time to production and first cash flows; and
o potential for a significantly higher net present value for the project than if a new processing plant and supporting infrastructure was required.
During the Farm-in period, Newcrest will have a first right of refusal over the Black Hills (E45/4512) and Paterson Range East (E45/4928) licences. Additionally, during the Farm-in period and the term of the proposed Joint Venture, Newcrest will have a first right of refusal over those blocks within the Havieron licence (E45/4701) not included in the Tenement Blocks.
A link to the map of the Tenement Blocks and Greatland's Paterson licences can be found on the Greatland Gold website at: https://greatlandgold.com/paterson/
Gervaise Heddle, Chief Executive Officer of Greatland Gold, commented: "We are delighted to welcome Newcrest as our chosen partner for accelerating the exploration and development of Havieron. Greatland will receive tremendous benefit from Newcrest's experience as a developer and producer at Telfer and Newcrest's broader understanding of the geology of the Paterson region. We believe that this deal represents a win-win for both parties due to the potential for significantly reduced capital costs and increased efficiency resulting from ore being toll processed at Newcrest's nearby Telfer mine. Moreover, Newcrest's expertise should help fast track Havieron through to a completed Feasibility Study and, subject to positive outcomes, into production and positive cash flow.
"The terms of the Farm-in agreement recognise both the exciting potential of the Havieron project and the significant value that has been added to the project through a series of systematic exploration campaigns by Greatland since it was acquired in September 2016. Additionally, we believe that Newcrest's first right of refusal over the remainder of Greatland's Paterson project (the Black Hills and Paterson Range East licences and the areas of the Havieron licence not included in the Tenement Blocks) represents a strong endorsement of the attractiveness and prospectivity of our licences in the region.
"In summary, we are very excited about the future of Havieron and the Paterson region more generally and we believe that this agreement with Newcrest will serve as a foundation on which we can build Greatland into a large and successful business delivering significant returns to our shareholders."
Fraser MacCorquodale, Newcrest General Manager Exploration, commented: "We are excited to partner with Greatland Gold on this opportunity. The Paterson province is a great place for gold-copper ore bodies. Leveraging our existing operations at Telfer represents an opportunity to create value for both companies and their shareholders."
Terms of the Farm-in Agreement
Tenement Blocks means the following 12 blocks within E45/4701:
1472 n, s, x, o, t, y, p, u, z,
1473 v, q, l
Remainder Tenements means the part of the Tenements comprised by (a) exploration tenements E45/4512 and E45/4928; and (b) the remaining tenement blocks within E45/4701 that are not Tenement Blocks.
Newcrest will have the right but not the obligation for it or its nominated related body corporate to acquire up to an initial 70% Farm-in Interest in accordance with the four-stage farm-in procedure as follows:
(Stage 1 Farm-in) Newcrest (and/or its related bodies corporate) incurs US$10 million Expenditure (inclusive of the Minimum Commitment) in relation to the Tenement Blocks (the Stage 1 Commitment) within a period of 12 months from the Farm-in Start Date (Stage 1 Period);
(Stage 2 Farm-in) if Newcrest (and/or its related bodies corporate) incurs an additional US$10 million by way of Expenditure in relation to the Tenement Blocks (the Stage 2 Commitment) within a period of 12 months from the date following satisfaction of the Stage 1 Commitment (Stage 2 Period), Newcrest will have the right, but not the obligation, for it or its related body corporate nominee, to acquire a 40% Farm-in Interest (the Stage 2 Interest) for no additional consideration;
(Stage 3 Farm-in) if Newcrest (and/or its related bodies corporate) incurs an additional US$25 million by way of Expenditure in relation to the Tenement Blocks and delivers a Pre-Feasibility Study for a project on the Tenement Blocks (the Stage 3 Commitment) within a period of 24 months from the date following satisfaction of the Stage 2 Commitment (the Stage 3 Period), Newcrest will have the right, but not the obligation, for it or its related body corporate nominee to acquire an additional 20% Farm-in Interest (the Stage 3 Interest) for no additional consideration;
(Stage 4 Farm-in) if Newcrest (and/or its related bodies corporate) completes and delivers, or incurs no less than US$20 million by way of Expenditure toward the carrying out of, a Feasibility Study for a project on the Tenement Blocks (the Stage 4 Commitment) within a period of 24 months from the date following satisfaction of the Stage 3 Commitment (the Stage 4 Period), Newcrest will have the right, but not the obligation, for it or its related body corporate nominee to acquire an additional 10% Farm-in Interest (the Stage 4 Interest) for no additional consideration; and
(Additional Farm-in) within a period of 12 months from the date following satisfaction of the Stage 4 Commitment (Additional Period), Newcrest shall have an option exercisable by written notice to the Company for it or its related body corporate nominee to acquire an additional 5% Farm-in Interest at fair market value.
Expenditure incurred in connection with the Feasibility Study that is in excess of US$20 million shall be funded by the Parties in proportion to their respective Participating Interests in the Joint Venture at the relevant time the Feasibility Study is delivered, in accordance with the terms of the Joint Venture Agreement.
Newcrest must incur Expenditure of not less than US$5 million (Minimum Commitment) within 12 months of receiving all required regulatory and heritage approvals. Nothing in the Farm-in Agreement or the Joint Venture Agreement obliges Newcrest to incur Expenditure greater than the Minimum Commitment.
Newcrest shall have the option to extend any or all of the Stage 1 Period, the Stage 2 Period, the Stage 3 Period and / or the Stage 4 Period provided that the extension of time does not exceed 12 months for any one Farm-in Stage, and 24 months in aggregate for all Farm-in Stages.
During the Farm-in Period, Newcrest will act as the Manager with respect to the Tenement Blocks. After the Farm-in Period, the Participant with the majority Participating Interest in the Joint Venture will be the Manager of the Joint Venture. During the Farm-in Period, and prior to entry into a Joint Venture and the establishment of a management committee, the Parties shall establish a Technical Committee comprising of one or more representatives nominated by each of Newcrest and Greatland.
The Pre-Feasibility Study and Feasibility Study for any project on the Tenement Blocks will consider the potential for the toll processing of ore from that project (JV Project) at the Telfer Gold Mine. If the Feasibility Study determines that toll processing at the Telfer Gold Mine is the preferred method for refining Minerals from the JV Project, then, subject to certain conditions and agreement of final tolling terms, the JV Project developed by the Joint Venture will toll process its ore at the Telfer Gold Mine processing facilities.
Right of First Refusal: If Greatland receives a bona fide offer from a third party purchaser to farm-in or otherwise acquire all or part of its right, title and interest in the Remainder Tenements, the Company must first make an offer on the same terms to Newcrest. The right of first refusal will only apply and be binding on the parties (a) in respect of any area of Tenement E45/4701, during the Farm-In Period and for the term of the Joint Venture Agreement; and (b) in respect of Tenements E45/4512 and E45/4928, for the duration of the Farm-In Period.
Overview of Greatland's Paterson Project and the Havieron licence
The Company's Paterson project, comprising the Havieron, Black Hills and Paterson Range East licences, is located in the Paterson region of northern Western Australia. The three licences collectively cover more than 385 square kilometres prospective for intrusion related gold-copper systems such as Telfer.
The Paterson region hosts several large gold and copper deposits such as Telfer and Nifty. The region has been subject to more recent exploration which has outlined several other deposits including Magnum (Au), Calibre (Au), O'Callaghans (W, Cu) and Maroochydore (Cu).
The region is remote, however infrastructure is good with several operating mines, roads, formed tracks and rail networks nearby which branch out from the regional industrial hub of Port Hedland 500km to the west.
The Paterson Province is the northern portion of the Proterozoic Paterson Orogen. More recent exploration throughout several Proterozoic Orogens within the western parts of the Australian continent has resulted in the discovery of the large Tropicana gold deposit and the large Nova nickel-copper deposit. Globally these Proterozoic Orogens are highly prospective for large deposits and are often under-explored.
Alteration and mineralisation of those targets which have been drill tested at Havieron and Paterson Range East display characteristics of intrusion related gold-copper deposits such as Telfer.
Initial airborne data outlined the Havieron target as covering approximately 1,000m x 1,000m. Depth to top of target is around 400m with these depths easily achieved with modern drilling equipment. Historically only six drill holes were completed by Newcrest between 1991 and 2003, all of which intersected significant alteration and gold, plus copper anomalism. Thick lower grade zones of gold and copper were intersected and gold grades within these peaked at 15.4g/t and copper to 2.5%. The drill hole spacing was broad and the core of Havieron therefore represented an immediate resource definition drilling target.
Following a review of regional geophysical and geochemical data over the Paterson project approximately 50 targets were identified in the broader region, with around half in ground held by Greatland. The setting of these licences is on the western margin of a Proterozoic basin which ranges in depth from less than 100m below surface to more than 400m below surface. Basement rocks of the basin are predominantly calcareous rich sandstones intruded by several late stage granitic bodies exploiting basin margin faults which have also provided a focus for ore fluids. Historically, several of these targets were subject to initial first-pass work and show promise at hosting mineralisation as seen at Havieron. The geophysical signature of these targets is very similar to that at Havieron. Basement rocks do not outcrop and Greatland can deploy modern geophysical and geochemical methods to define targets prior to drill testing.
MMI sampling and ground gravity over the Havieron target was completed in late 2017 at an initial sample and station spacing of 200m x 200m. Gravity results confirmed a north west structural trend of basement carbonate sediments which is mirrored by the surface MMI response. Clusters of elevated gold, silver, arsenic, copper and iron in MMI results are proximal the peak co-incident gravity and magnetic response. An elevated MMI response in pathfinder elements (cerium, lanthanum, uranium and lead) to the immediate SE of Havieron suggests primary basement mineralisation may be present along strike in a structural contact for up to 1.5 kilometres. Peak MMI responses over Havieron were 4ppb silver, 70ppb arsenic, 25ppb gold, 834ppb cerium, 710ppb copper, 53ppm iron, 284ppb lanthanum, 860ppb lead and 112 ppb uranium. Elevated pathfinder elements detected by the MMI survey supported the view that Havieron is a fertile system.
Initial forward modelling of detailed aeromagnetic data (50m line spacing and 40m mean terrain clearance) and detailed ground gravity data (100m x 100m and 100m x 200m station spacing) over the Havieron target was completed in February 2018. Results of forward modelling defined a primary body approximately 600m x 600m across with a depth extent from 400m to 900m below surface. Modelled bodies were constrained to known physical rock properties available at the time.
New 3D geophysical models of the Havieron target were generated in late 2018 and reported to market on 27 November 2018. Combined, the new gravity and magnetic bodies cover approximately 600m x 600m when the outer shells of the bodies are considered. Results of modelling of gravity data outline a large irregular shaped body, some 300m across, from approximately 400m below surface (top of basement) to 1,200m below surface with an overall subvertical attitude. Result of modelling of magnetic data define a discrete elliptical shaped body approximately 450m across that is steeply dipping (subvertical) toward the south east with a depth extent from around 800m below surface to approximately 1,400m below surface (but the body may continue beyond 1,400m as this is the current limit of data resolution). When 3D gravity and magnetic models are compared there is a +500m vertical and +200m lateral offset between the centres of the causative bodies.
In April and May of 2018, Greatland carried out its maiden drill campaign at the Havieron target completing four vertical core holes (HAD001-004) for a total of approximately 2,400m of drilling. Greatland's drill locations were designed to intersect the mineralised system at Havieron near to historical drill holes HAC9101 and HAC9201. Newcrest's historic drill holes HAC9101 and HAC9201 were vertical and drilled to depths of 533m and 528m respectively. Significant results were returned including 121m at 2.93g/t gold and 0.23% copper from 497m, including 11.5m at 21.23g/t gold and 0.67% copper from 568.5m (HAD001) and 21m @ 3.78g/t gold and 0.44% copper from 418m, including 1m at 29.12g/t gold and 0.4% copper from 428.5m (HAD003).
The company re-commenced drilling at Havieron in September 2018 and the first hole of the campaign, HAD005, was sited 200m west of HAD001 and angled at 70 degrees toward grid east. HAD005 penetrated the Permian cover sequence to 459m before immediately entering the mineralised Proterozoic target sequence. HAD005 returned an overall intercept of 275m at 4.77g/t gold and 0.61% copper (approximately 1,580 metre grams gold equivalent) from an upper zone of 118m at 3.08g/t gold and 0.84% copper from 459m, and a lower zone of 157m at 6.04g/t gold and 0.44% copper from 660m (reported to market 19 November 2018), separated by an apparently unmineralised mafic intrusion. Other metals are present in the system including silver to 211g/t, lead to 12% and zinc to 5.9%.
Analytical results for HAD006 through HAD009 were reported in an announcement dated 5 February 2019. Overall, every hole intersected mineralisation with broad intercepts reported in several holes. HAD006, HAD007 and HAD009 all ended in mineralisation highlighting the depth potential of the system. HAD006 intersected more than 367.1m of mineralisation at 2.0g/t gold equivalent, including 150.5m at 3.5g/t gold equivalent. HAD008 returned 89m at 3.6g/t gold equivalent. In HAD007 gold peaked at 21.75g/t and indicated additional mineralisation several hundred metres further east. HAD009 tested the deeper parts of the system returning significant copper intercepts from approximately 765m downhole to end of hole. A plan view and cross section of the drilling at Havieron can be found at: http://greatlandgold.com/paterson/
The outer limits of mineralisation at Havieron are yet to be defined. In particular, mineralisation is open to the north, south and west, and at depth. Additional mineralisation has been identified to the east but only limited data is available at this stage.
Downhole wireline work was completed on several drill holes during 2018. Wireline tools included optical televiewer, acoustic televiewer, chargeability, conductivity, density, magnetic susceptibility, full waveform sonic, salinity and temperature. Not all tools were used on all holes surveyed. The data obtained is of good quality and provides detailed geophysical and physical properties of the cover rocks, host sequence and mineralisation. In general, zones of gold and copper mineralisation show a positive magnetic response of significant amplitude. Zones of gold and copper mineralisation display a conductivity response of moderate amplitude. Zones of increased copper mineralisation show a positive chargeability response. Elevated density is co-incident with mineralised zones and there is a large density contract between the cover rocks (Permian) and basement (Proterozoic). Ground water salinity is relatively low. Wireline data has been very instructive in determining optimal airborne, ground and downhole geophysical techniques to assist exploration work at Havieron and for deployment on the many untested regional targets.
Existing drill holes at Havieron have tested to approximately 840m vertically below surface. Elevated gold and copper persisted to end of several holes suggesting the mineralisation continues at depth below the current limit of drilling. Laboratory results from Greatland drilling demonstrate the presence of very high grade zones of gold and copper at Havieron within very large zones of mineralisation and, when considered in conjunction with geophysical models, the scale of the system is apparent.
Havieron has the potential to become a large, multi-commodity, bulk tonnage, underground mining operation near to existing infrastructure in a mining friendly jurisdiction.
Competent Person:
Information in this announcement that relates to exploration results is based on information compiled by Mr Callum Baxter, a director of Greatland Gold plc, who is a member of the Australasian Institute of Mining and Metallurgy and Australian Institute of Geoscientists. Mr Baxter has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which has been undertaken to qualify as a Competent Person as defined by the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) and under the AIM Rules - Note for Mining and Oil & Gas Companies. Mr Baxter consents to the inclusion in the announcement of the matters based on their information in the form and context in which it appears.
Enquiries:
Greatland Gold PLC
Gervaise Heddle/Callum Baxter
Tel: +44 (0)20 3709 4900
Email: [email protected]
www.greatlandgold.com
SPARK Advisory Partners Limited (Nominated Adviser)
Andrew Emmott/James Keeshan
Tel: +44 (0)20 3368 3550
SI Capital Limited (Broker)
Nick Emerson/Alan Gunn
Tel: +44 (0)14 8341 3500
Luther Pendragon (Media and Investor Relations)
Harry Chathli/Alexis Gore
Tel: +44 (0)20 7618 9100
Notes for Editors:
About Newcrest
Newcrest is the largest gold producer listed on the Australian Securities Exchange and one of the world's largest gold mining companies. Newcrest mines are located in Australia, Papua New Guinea and Indonesia. Current operations include: Telfer (Western Australia), Cadia Valley Operations (New South Wales, Australia), Gosowong (Halmahera Island, Indonesia) and Lihir (New Ireland Province, Papua New Guinea).
About Greatland
Greatland Gold plc (AIM: GGP) is a London listed natural resource exploration and development company with a current focus on gold, copper and nickel exploration projects.
The Company has six main projects; four situated in Western Australia and two in Tasmania. All projects are 100% owned by Greatland. The Company is seeking to identify large mineral deposits in areas that have not been subject to extensive exploration previously. It is widely recognised that the next generation of large deposits will come from such under-explored areas and Greatland is applying advanced exploration techniques to investigate a number of carefully selected targets within its focused licence portfolio.
The Company is also actively investigating a range of new opportunities in precious and strategic metals and will update the market on new opportunities as and when appropriate.
