Greatland Gold, supported by Andrew Forrest, has confirmed it is nearing the acquisition of Newmont’s Telfer gold and copper mine in Western Australia.
Street Talk reported Monday that Greatland is preparing to issue nearly $500 million in new shares to finance the deal. Major shareholder Andrew Forrest is expected to subscribe to his portion of the stock.
“The proposed consideration includes a combination of upfront cash, deferred payments, and equity.”
Greatland has been the leading candidate to acquire Telfer since Newmont formally put the asset up for sale in February, due to Greatland’s existing 30% stake in Havieron, the gold and copper discovery that supports Telfer’s future.
When Greatland discovered Havieron, located about 45 kilometers from Telfer, in 2018, Telfer was a marginal asset on the brink of closure. At that time, Telfer’s owner, Newcrest Mining, quickly acquired 70% of Havieron to leverage its prospective geology with Telfer’s existing infrastructure.
Greatland Gold PLC (AIM:GGP) Response to media article – Temporary suspension of trading
After Newmont acquired Newcrest last year, it became Greatland’s partner in Havieron. Newmont is now selling Telfer—and several other mines—because they do not meet its elite global standards.
Greatland’s 30% stake in Havieron grants it the right to match any offers for Newmont’s share in the project. Although Greatland does not have matching rights for Telfer itself, most potential buyers would be less interested in Telfer without the accompanying Havieron asset, giving Greatland a strong position in negotiations.
However, the 47-year-old Telfer mine is showing signs of deterioration. Recently, two tailings dams at Telfer have been leaking, leading Newmont to reduce production for repairs earlier this year.
Andrew Forrest Wyloo Metals holds an 8.5% stake in Greatland, and three of Greatland’s seven board members have historical ties to Dr. Forrest’s flagship company, Fortescue. Existing cornerstone shareholder Wyloo plans to offer substantial support for the potential acquisition,” Greatland announced on Monday morning.
The anticipated merger of Telfer and Greatland might be just the beginning of a larger consolidation in WA’s Paterson Province.
Rio Tinto is seeking a partner to develop the Winu copper and gold discovery, located approximately 100 kilometers north of Havieron.
Greatland has informed investors that it wants these issues resolved before finalizing the acquisition of Telfer.
“Settlement of the potential acquisition is proposed to be conditional on the completion of ongoing remediation works by Newmont concerning the Telfer tailings storage facility,” the company stated.
According to AIM rules, the transaction will be structured as a reverse takeover.
Shares of Greatland have been suspended in both the UK and Australia while the deal is being finalized. At the suspension price of 7.10p, Greatland is valued at £361.42 million
