Greatland Gold (LON: GGP) is acquiring its partner Newmont Corporation’s 70% stake in the Havieron gold-copper project, as well as acquiring 100% ownership of the Telfer gold-copper mine and other assets in the Paterson region.
The total cost is $475m in cash and shares, with up to $100m deferred until commercial production is underway at Havieron. Newmont Corporation will own more than 20% of the AIM-quoted gold explorer.
A placing raised £248.6m ($325m) at 4.8p each, which is a 30% discount to the market price. Wyloo is subscribing up to $100m. Individual shareholders have the chance to participate in a retail offer via PrimaryBid to raise up to £6.8m. The cash element of the acquisition is $155.1m and it will repay a joint venture loan of $52.4m. A A$7.1m working capital facility will be repaid.
The Havieron and Telfer mines will be run as an integrated operation. Havieron has a mineral resource of 8.4 million ounces of gold equivalent. At average annual production of 258,000 ounces, the mine life is 20 years.
Telfer could produce 426,000 ounces of gold equivalent. This could generate near-term cash flow and there is potential to expand the resource.
Greatland Gold has secured a non-binding bank debt letter of support for A$750m in bank facilities to fund development of the Havieron project. Along with the cash raised, this facility would be enough to move the project to production.
The deal should be completed in the fourth quarter. Trading in the shares will recommence at 7.30am on 11 September. At the placing price, Greatland Gold is capitalised at £499.8m. Next year, there are plans to list on the ASX.