Greatland signs two JV agreements

Background

• In March 2019, Greatland signed a four-stage farm-in agreement with Newcrest, to explore and develop Greatland's Havieron gold-copper deposit in the Paterson region of Western Australia.
• Excellent drilling results to date from Newcrest's ongoing exploration campaign have highlighted the world-class potential of the Havieron gold-copper deposit, and the parties see real potential to further expand the deposit, with the extent of the Havieron system still to be defined.
• In addition, the Havieron project is progressing faster than was anticipated at the time the farm-in agreement was entered into, with early works expected to commence in late 2020 or early 2021, subject to receipt of required approvals.

Summary of Agreements

Havieron

Newcrest and Greatland have entered into a series of new agreements in relation to Havieron, most notably, the Havieron JV agreement and the Havieron loan agreement. These new agreements are expected to deliver the following primary benefits to Greatland:

• The agreements provide a formal framework for the arrangements between the two parties beyond the existing farm-in agreement, and facilitate the expansion of exploration activities at Havieron and the acceleration of early works, including the construction of a box-cut and decline.
• The Havieron loan agreement secures funding for Greatland (approximately US$50 million), which, together with Newcrest's existing sole funding commitments under the farm-in agreement, is expected to fund Greatland's share of joint venture costs (based on current forecasts) up to the completion of feasibility study.

A fully-termed JV agreement between Newcrest and Greatland to govern the joint venture ownership and operations of the Havieron project.

• In order to support the planned acceleration of the construction of a box-cut and decline and a faster rate and scope of planned spending on exploration activities, the parties have agreed to fund these activities in proportion to their post-Farm-in period interests (70% Newcrest; 30% Greatland).
• In order to incorporate ongoing growth drilling activities, the parties have agreed a structure that allows Newcrest to deliver the pre-feasibility study in Stage 4.
• Consequently, Newcrest has now met the Stage 3 expenditure requirements and is entitled to earn an additional 20% interest in the Havieron Joint Venture for an overall 60% interest (40% Greatland).
• Newcrest's total farm-in commitment remains to incur expenditure of US$65 million and deliver a pre-feasibility study to earn 70%.

The Havieron loan agreement provides for a loan facility of US$50 milliom from Newcrest to Greatland, at an interest rate of LIBOR + 8%, which is expected (based on current forecasts) to fund Greatland's share of JV costs, including early works and growth drilling, up to the completion of the feasibility study.

Juri JV

In addition to the Havieron-related agreements, Newcrest and Greatland have entered into a farm-in and joint venture agreement to accelerate exploration at Greatland's Black Hills and Paterson Range East licences:

• Newcrest immediately receives a 25% interest in both licences and has the right to earn up to a 75% interest in the licences by spending up to AUS$20 million as part of a two-stage farm-in over 5 years, including an AUS$3 million minimum commitment for Stage 1.
• Greatland has previously identified a number of high-priority targets across the two licences, many of which display similar geophysical characteristics to the Havieron gold-copper deposit.
• Greatland retains 100% ownership of both the Scallywag and Rudall licences which do not form part of the Juri JV.

Key upcoming milestones

• Initial mineral resource on track: initial inferred mineral resource estimate for Havieron expected to be delivered in December 2020.
• Early works commencement: new camp at Havieron, with accommodation for up to 230 people, is nearly completed, and construction of box cut and decline is expected to commence late 2020 or early 2021, subject to receipt of required approvals.
• Pre-feasibility study: a pre-feasibility study for Havieron, including an indicated mineral resource estimate, is expected to be delivered by late 2021.
• Juri JV exploration activities: drilling of high-priority targets, including Parlay and Goliath, is expected to commence in early 2021.

Gervaise Heddle, CEO of Greatland Gold, commented: "These new agreements with Newcrest represent a landmark moment for Greatland Gold, both in structuring the next stage in Havieron's development and progressing our exploration efforts across the Paterson region.

"The Havieron JV agreement formalises our relationship with Newcrest beyond the existing farm-in, and with this agreement in place, we expect to progress rapidly towards the potential establishment of mining operations over the next 2 – 3 years. Importantly, the new Havieron loan agreement with Newcrest secures for us our share of the necessary monies to accelerate activities at the Havieron project. Indeed, based on current forecasts, we now expect to be funded for our share of expenditure, including the costs associated with the construction of the decline and an expanded exploration programme at Havieron, up to the completion of the feasibility study. With all this in place, Newcrest and Greatland can now accelerate our efforts and work together towards realising the world-class potential of this exciting project.

"The Juri JV with Newcrest for the Paterson Range East and Black Hills licences represents an affirmation of our belief in the potential of these areas and one that we expect will maximise the long-term strategic value of these licences. By early 2021, we expect to be moving forward with multiple exploration campaigns in the Paterson as we advance exploration at the Havieron Joint Venture, the Juri JV and across Greatland's 100%-owned licences.

The transformation of Greatland over the past few years has been remarkable and we are now in the strongest position we have ever been to capitalise upon our recent success. We remain committed to building shareholder value and, with these key agreements now in place, we look forward to continuing this exciting journey."

Read the article online at: https://www.globalminingreview.com/finance-business/01122020/greatland-signs-two-jv-agreements/