Following months of speculation, it was announced yesterday that Newmont and Greatland Gold had stuck a deal for Greatland to acquire the Telfer gold-copper mine, the remaining 70 per cent stake in the Havieron gold-copper project, and any other related interests in the Paterson region of Western Australia.
The $US475 million ($711 million) agreement is the latest gold M&A to set the Australian mining industry abuzz. But how will it shape the country’s gold sector? Australian Mining investigates.
It all started in February, when Newmont announced its plans to divest six gold mines and two gold projects that didn’t meet its definition of a Tier 1 asset.
Two of the oeprations to be sold were Telfer and Havieron.
Considered one of Australia’s largest and most historic gold-copper mines, Telfer is located 400km from Port Hedland in WA. It produced 349,000 ounces of gold and 17 metric kilotons (kt) during the 2022–23 financial year (FY23).
Located approximately 45km to the east of Telfer, Havieron was discovered by Greatland in 2018 and is one of the largest copper-gold deposits to have been recently discovered in the Patterson region of WA.
As of December 2023, Havieron’s mineral resource estimate comprises 131 million tonnes (Mt) at 1.7 grams per tonne of gold and 0.21 per cent copper, for a total of seven million ounces of gold and 275kt of copper.
The project was originally being advanced under an unincorporated 30:70 joint venture originally signed by Greatland and Newcrest in November 2020.
Then Newmont inherited the 70 per cent stake in Havieron, as well as management of the project, when it acquired Newcrest last year.
While Telfer and Havieron have delivered impressive results over the years, Newmont doesn’t consider Telfer to be a ‘Tier 1’ asset.
Newmont defines a Tier-1 asset as an operation with “(more than) 500,000 gold equivalent ounces per year consolidated, (an) average all-in sustaining cost per ounce in the lower half of the industry cost curve, and a mine life (greater than) 10 years in countries classified in the A and B rating ranges of Moody’s, S&P and Fitch”.
Despite Newmont’s feelings, several gold miners were eyeing Telfer, but Greatland has come out on top.
Having already owned 30 per cent of Havieron and Telfer being in close proximity, the projects were considered by most potential buyers to be a package deal, making Greatland the obvious choice.
“I am pleased that Telfer and Havieron are being sold to Greatland, a company with a highly experienced management team and board of directors,” Newmont president and chief executive officer (CEO) Tom Palmer said.
“I have full confidence that the Greatland team will be outstanding stewards of these assets.”
Greatland also has the backing of Andrew Forrest’s private company Wyloo, which became Greatland’s largest shareholder in September 2022 through a $120 million investment.
“Wyloo is pleased to support Greatland Gold’s consolidation of the world-class Havieron gold-copper development project and the producing Telfer gold-copper mine in the Paterson region of Western Australia, with a funding package of up to $US100 million,” Wyloo said.
“Wyloo’s investment will support Greatland’s acquisition of the remaining 70 per cent interest in Havieron, 100 per cent of Telfer, and other related interests in assets in the region.”
Wyloo CEO Luca Giacovazzi said the consolidation will empower Greatland “to create a world-class mining and processing hub in the emerging Paterson Range province”.
“We look forward to continuing to support Greatland as it develops the Havieron project and establishes itself as a leading Australian gold producer,” he said.
Greatland also launched an equity raising of approximately $US325 million to help fund the acquisition, which has conditionally placed over 5 billion new ordinary shares at 4.8 pence per placing share.
“We are delighted to have successfully closed the placing, which was strongly supported and oversubscribed,” Greatland managing director Shaun Day said.
“The placing proceeds will fully fund the cash consideration for the acquisition of 100 per cent ownership of Havieron and Telfer, to make Greatland a material producer of gold and copper.
“We appreciate the support and look forward to the compelling opportunity that the acquisition affords us to create value for all Greatland shareholders.”
The transaction is expected to close by the end of 2024, subject to certain conditions being satisfied, which includes the remediation of Telfer’s cracked tailings dam.
Greatland is also looking to gain an ASX cross-listing within the next six months.
The company announced its intentions to trade on the ASX in May 2023 in order to “simplify its Australian operations, allowing for greater flexibility to pursue growth initiatives such as farm-ins and joint ventures.”
With the future of Telfer and Havieron in new hands, it seems a new era for these operations are on the horizon.
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