Operational review

HAVIERON PROJECT - HAVIERON JOINT VENTURE, WESTERN AUSTRALIA (GREATLAND: 30%)

The Havieron Project ("Havieron" or "Project") is currently in development under a Joint Venture with Newcrest Mining Limited ("Newcrest"), Australia's largest gold producer. Havieron is located just 45km from Newcrest's Telfer mine. This allows Havieron to leverage Telfer's existing infrastructure and processing plant to significantly reduce the project's capital expenditure and carbon impact for a low cost pathway to development under an ore tolling arrangement.

Havieron was discovered by Greatland in 2018 and has become established as one of the most exciting long life gold-copper deposits in development worldwide. It 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. Newcrest assumed management of the Joint Venture in May 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 Stage 1 Pre-Feasibility Study (PFS) on the South-East Crescent of the Havieron deposit was released on 12 October 2021. The study 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 capital tier-one gold-copper mine into production. 

On 9 December 2021, the Company announced the joint venture had completed a total of 219,561m of drilling from 266 holes, with all the latest completed holes continuing to intersect mineralisation, and 19 reporting significant mineralisation. Key updates to the development and exploration of Havieron during the period were as follows:

§ 24 new drill holes, including 20 holes from the Infill Drilling programme and 4 from the Growth Drilling programme.

§ Significant mineralisation was reported in 19 of the new holes.

§ A further 10 drill holes have been completed and are awaiting assay.

§ Infill drilling within the South Eastern Crescent Zone Inferred Mineral Resource supports the modelled grade and thickness within the South East Crescent Zone Mineral Resource.

§ Growth drilling continued to show potential for resource additions outside the existing Inferred Mineral Resource, including a mineralised zone 100m below and 100m to the north-west of prior grade holes.

§ Drilling to test geophysical targets outside of the known Havieron system commenced at Havieron North, and Zipa.

§ All drilling is now focused on growth programs to continue into 2022 with 6 drill rigs operational.

§ Construction activities are progressing well with exploration decline advanced 245 metres.

§ Planning commenced for the first ventilation shaft.

In December 2021, Newcrest issued a notice to the Company to begin the process under the Joint Venture Agreement ("JVA") to exercise the option to acquire an additional 5% interest in the Havieron Joint Venture from Greatland at fair market value, as determined under the JVA principles. Under the JVA, if the option exercise price cannot be agreed, each party is thereafter required to notify the other of its assessment of fair market value. If both parties' assessments are within 10% of each other, the option exercise price will be the average of those assessments. If both parties' assessments are not within 10% of each other, the parties will proceed to independent expert valuer determination, with the expert being required to determine which of the fair market values nominated by the parties is to be the option exercise price.

Subsequent to the period end, on 2 March 2022 both parties agreed to some minor modifications to the option process which included increasing the valuation range noted above from 10% to 20%.

Following agreement or determination of the option exercise price, Newcrest has 30 business days to exercise its option to acquire the additional 5% interest.  Proceeds from the exercise will first be used to repay the outstanding balance under the existing Newcrest loan facility.

As at the date of this report, both parties continue to have discussions regarding the acquisition of the additional 5% interest in the Havieron Joint Venture.

As outlined in previous announcements, most recently on 9 December 2021, following delivery of a Pre-Feasibility Study and meeting the relevant expenditure commitment, Newcrest is entitled (on the terms of the JVA) to an additional 10% joint venture interest, and exercising this entitlement will result in an overall joint venture interest of 70% Newcrest (30% Greatland). 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 a 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 Au Eq 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 10 months of consistently impressive drilling results since the February 2021 drilling cut off used for the last Mineral Resource update.

100% OWNED PROJECTS

Greatland has multiple 100% owned projects across Australia:

§ Scallywag project - Adjacent to the Havieron mining lease, containing a further 20km of strike of Yeneena Group metasediments located directly to the north-west of Havieron. 

§ The Rudall and Canning projects - Applications expand Greatland's landholding in the Paterson region by over 46% to 564 square kilometres. Both licences are considered to be prospective for Havieron style gold-copper mineralisation and fit Greatland's strategy to increase its exposure to the discovery of new tier-1 gold-copper deposits.

§ The Ernest Giles project - Located in central Western Australia, covering an area of approximately 1950 square kilometres with around 180km of strike of rocks prospective for gold. The eastern Yilgarn Craton is one of the most highly mineralised areas in Western Australia and is considered prospective for large gold deposits.

§ The Panorama project - Consisting of three adjoining exploration licences, covering 157 square kilometres, located in the Pilbara region of Western Australia, in an area considered to be highly prospective for gold and cobalt.

§ The Bromus project - Located 25 kilometres south-west of Norseman in the southern Yilgarn region of Western Australia. It consists of two licences, covering 87 square kilometres of under-explored greenstone and intrusive granites of the Archean Yilgarn Block at the southern end of the Kalgoorlie-Norseman belt.

§ The Firetower project - Located in central north Tasmania, Australia and covers an area of 62 square kilometres

§ The Warrentinna project - Located 60 kilometres north-east of Launceston in north-eastern Tasmania and covers an area of 37 square kilometres with 15 kilometres of strike prospective for gold.

Exploration and evaluation expenditure activity during the period comprised of expenditure on the Group's projects, which during the period predominately focussed on the following:

a)    Drilling multiple new targets within the Scallywag licence, following analysis of results of an airborne Electromagnetic survey conducted last year and further geological interpretation of regional aeromagnetic and gravity datasets; and

b)    Other exploration analysis and detailed target identification on Greatland's other 100% owned tenements.

Further details of the exploration projects can be found on Company's website www.greatlandgold.com.

In addition, on 16 September 2021 Greatland entered into an agreement with Province Resources Limited (ASX:PRL) to acquire the 100% owned Pascalle tenement, the 100% owned Taunton tenement and two tenement applications for exploration licences in the Paterson Province of Western Australia for a consideration of cash and shares.

The Pascalle tenement is proximal to world class gold-copper deposits with Havieron 20km to the East and Newcrest's Telfer Mine 14km to the West. All areas contain multiple magnetic and other geophysical anomalies identified to date and which are untested by drilling.

This is the Group's first licence acquisition since Havieron and adds over 1,000km² of exploration ground in the Paterson region expanding Greatland's strategic footprint in one of the most prospective exploration areas for gold-copper deposits in Australia.

The purchase agreement was as follows:

§ Greatland acquired the right, title and interest in the Pascalle tenement from PRL for a consideration of A$50,000, free of any encumbrance; and

§ PRL is the sole applicant of the applications for exploration licences E45/5754 and E45/5755 (PRL Applications) and is the 100% owner of Taunton tenement.  Greatland will pay a consideration of A$100,000 plus A$200,000 in cash or A$200,000 in fully paid ordinary shares in the capital of Greatland in respect to the withdrawal of the PRL Applications and sale and purchase of the Taunton tenement, and if necessary, the sale and purchase of the licences created if the PRL Applications are granted.

Settlement of the Pascalle tenement was finalised in December 2021 resulting in acquisition costs of £26,880 capitalised as an exploration and evaluation asset during the six months ended 31 December 2021.

JURI JOINT VENTURE, WESTERN AUSTRALIA (GREATLAND: 49%)

The Juri Joint Venture consists of two exploration licences in the prospective Paterson region, Black Hills and Paterson Range East, under a Joint Venture with Newcrest. Newcrest has the right to earn up to 75% interest by spending up to A$20m in total as part of a two-stage farm-in over five years.

On 19 October 2021, Newcrest advanced to Staged 2 and earned an additional 26% interest, resulting in Greatland's working interest reducing from 75% to 49%. Greatland has currently continued in the role of Manager for the Juri Joint Venture.

Key components of the Juri Joint Venture exploration activities during the period were:

§ First phase of the drilling programme was completed on the Paterson Range East and Black Hills tenements, which comprised nine holes for 4,958m testing six targets.

§ All assay results received for the first phase.

§ Mineralisation found at Black Hills hole DHB003.

§ Ground Electromagnetic survey completed identifying several promising EM conductor targets for 2022 drilling programme.

CORPORATE

Equity raising

In November 2021, the Company issued 82,000,000 new ordinary shares at an issue price of £0.145 per share for a total consideration of £11,195,067, net of costs.

Exchange losses

The Group has recognised a foreign exchange loss of £581,303 in the income statement as a result of the US$27,188,755 million loan held by the Australian subsidiary with Newcrest Operations Limited in respect of the Havieron Joint Venture. The functional currency of the Australian subsidiary is Australian dollars while the loan is denominated in US dollars. The unrealised foreign exchange loss was incurred as result of the movements of the Australian dollar against the US dollar during the period.

On consolidation, these balances are retranslated to sterling (£) presentation currency.

People

On 8 July 2021 the Company announced the appointment of Christopher Toon as Chief Financial Officer of the Company, in a non-Board role with effect from 12 July 2021.

On 11 August 2021 the Company announced the appointment of Otto Richter as Group Mining Engineer with effect from 16 August 2021.

On 25 August 2021 the Company announced the appointment of Paul Hallam as a Non-Executive Director to the board, effective 1 September 2021.

Dividends

The Board of Directors do not recommend the payment of a dividend (2020: Nil).

Significant events after the balance date

In December 2021, Newcrest issued a notice to the Company to begin the process under the JVA to exercise the option to acquire an additional 5% interest in the Havieron Joint Venture from Greatland at fair market value, as determined under the JVA principles. Under the JVA, if the option exercise price cannot be agreed, each party is thereafter required to notify the other of its assessment of fair market value. If both parties' assessments are within 10% of each other, the option exercise price will be the average of those assessments. If both parties' assessments are not within 10% of each other, the parties will proceed to independent expert valuer determination, with the expert being required to determine which of the fair market values nominated by the parties is to be the option exercise price.

Subsequent to the period end, on 2 March 2022 both parties agreed to some minor modifications to the option process which included increasing the valuation range noted above from 10% to 20%.

Following agreement or determination of the option exercise price, Newcrest has 30 business days to exercise its option to acquire the additional 5% interest. Proceeds from the exercise will first be used to repay the outstanding balance under the existing Newcrest loan facility.

As at the date of this report, both parties continue to have discussions regarding the acquisition of the additional 5% interest in the Havieron Joint Venture.

SAFETY PERFORMANCE

The Group's aim is to achieve and maintain a high standard of workplace safety. In order to achieve this objective, the Group provides training and support to employees and sets demanding standards for workplace safety.

Enquiries:

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.

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 maiden Pre-Feasibility Study released on the South-East Crescent on 12 October 2021. 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.