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Greatland Gold seals $714m deal with Newmont for Telfer and full control of Havieron

Headshot of Daniel Newell
Daniel NewellThe West Australian
The deal comes just a day after The West Australian confirmed Greatland was in advanced talks with Newmont.
Camera IconThe deal comes just a day after The West Australian confirmed Greatland was in advanced talks with Newmont. Credit: Supplied

Greatland Gold has inked a $US475 million ($714m) cash-and-scrip deal to buy Newmont’s ageing Telfer gold mine in the Pilbara and sweep up the remaining interest it doesn’t already own in the nearby Havieron discovery.

The Andrew Forrest-backed gold explorer told the London Stock Exchange overnight Tuesday that the acquisition included cash of $US207.5m, $US167.5m for 2.7 million new Greatland shares and a deferred contingent cash consideration of up to $US100m once Havieron starts commercial production.

The deal comes just a day after The West Australian confirmed Greatland was in advanced talks with Newmont.

Under the agreement, Newmont will emerge with a 20.4 per cent stake in Greatland, which plans to dual list on the Australian Securities Exchange within six months of completion.

“Consolidation of 100 per cent ownership of Havieron and the acquisition of Telfer provides Greatland the opportunity to control the integration and optimisation of the combined assets, with the objective of creating a generational gold-copper mining complex,” the company said.

Greatland’s base case for Havieron would see Telfer’s facilities process up to 2.8 million tonnes of ore a year to turn out 258,000 ounces of gold over a 20-year mine life. It is hoping to shore up those numbers in a feasibility study it aims to complete within a year of the Telfer deal.

Newmont picked up Telfer as part of its $26 billion takeover of Newcrest Mining last year and made no secret of its plan to offload the asset, which is does not consider core to its global gold portfolio — the biggest in the world.

The deal for Telfer includes provision for remediation of the mine site’s tailing dams, which forced a full-stop of the processing mill in April. It is not expected to retstart until later this month or October.

Greatland will launch a $US325m capital raising to fund the deal, underwritten by Canaccord Genuity. Mr Forrest’s private Wyloo Consolidated Investments., which already controls 8.5 per cent of Greatland’s register, is expected to tip in $US100m.

Greatland managing director Shaun Day said Havieron — dubbed a “generational” project — was “world-class” and promises to become a “low-cost, long life gold-copper asset of significant scale”.

“The acquisition of Telfer, with a defined mine plan that is materially de-risked with substantial ore stockpiles, and significant mine life extension prospects, provides us the opportunity to take advantage of present gold market strength,” Mr Day said.

“Telfer production is expected to generate free cash flow, which we expect will help self-fund the Havieron development.”

Chair Mark Barnaba — also deputy chair of Mr Forrest’s Fortescue — said Greatlad had been coveting full ownership of Havieron for the past three years and the Newmont deal would be “transformational” for shareholders.

Newmont president Tom Palmer said the purchase marked the first asset sale in the divestiture program announced by the US-based gold giant in February.

“I have full confidence that the Greatland team will be outstanding stewards of these assets,” Mr Palmer said.

“Including the Telfer divestiture, we continue to expect to reach at least $US2 billion in total proceeds from the sale of our high-quality, non-core assets, enabling us to focus attention on our suite of Tier 1 assets, further reduce debt, and return capital to shareholders.”

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