Greatland Gold PLC (GGP.L) Final Results

Greatland Gold plc (AIM:GGP), the precious and base metals exploration and development company, announces its financial results for the year ended 30 June 2021.

Chairman’s Statement

I am pleased to report on the Company’s audited results for the year ended 30 June 2021.

It has been another year of considerable progress for Greatland Gold plc (“Company”) and the consolidated group (“Greatland” or the “Group”), which has seen its evolution from a junior explorer to a mining development and exploration company. We achieved several significant milestones at our flagship asset Havieron including commencing construction and surface infrastructure activities, taking major steps towards bringing a tier-one gold copper mine into production.

Such has been the pace of development at Havieron, that during the financial year Greatland entered into a new landmark joint venture agreement with Australia’s largest gold producer Newcrest Mining Limited (Newcrest, ASX: NCM). This partnership with a tier-one, experienced operator in this region has enabled greater investment in Havieron and an extensive programme of growth drilling which furthered our understanding in the deposit and accelerated its development. In December 2020, we announced a maiden resource of 3.4Moz Au and 160Kt Cu, the first of many graduating studies into the size of Havieron. Subsequent to the year end in October 2021, Greatland was awarded the winner of the 2021 Commodity Discovery Fund award for its Havieron discovery.

The Havieron gold-copper discovery is a world class deposit and continues to deliver excellent results with significant intercepts of high-grade gold and copper outside of the existing resource shell. With over 200,000 metres of drilling now completed, the equivalent distance of London to Sheffield we have significantly enhanced our understanding of the deposit and of the likelihood of continuing to upgrade to the Mineral Resource Estimate in the near-term.

Subsequent to the year end, a Pre-Feasibility study was released on an initial segment of the Havieron deposit which has detailed a development pathway to first gold produced and operating cashflow. The study revealed the tip of the Havieron iceberg with a fraction of the initial resource supporting the total capex of the project, justifying a fast start approach to early cashflow generation and reinvesting back into Havieron development and infrastructure. This supports our belief that the profile of Havieron makes it a globally unique opportunity for bringing a low risk, low capex tier-one gold-copper mine into production.

Capitalising upon the success at Havieron, Greatland also entered into a second joint venture with Newcrest during the year in the prospective Paterson region. The Juri Joint Venture for the Paterson Range East and Black Hills licences represents an affirmation of Greatland’s belief in the potential of these areas, maximising the long-term strategic value of these licences. Subsequent to year end Greatland completed the maiden drill programme at Juri and announced intercepting gold mineralisation from the initial four assayed holes, including first gold identified at the Goliath prospect.

The rapid progress seen at Havieron has not lessened our appetite for exploration and new discoveries and we are excited by several other prospects that display similar geophysical characteristics to the Havieron gold-copper deposit, particularly in the Paterson region where Greatland has an expanded strategic footprint. Key developments for the year across Greatland’s portfolio of exploration projects are detailed in the Strategic Report, but I would like to briefly note some further highlights.

Exploration portfolio

At Scallywag, adjacent to the Havieron project, exploration work consisted of airborne Electro-Magnetic (EM) surveying, target identification and drilling. The 2021 Scallywag drill programme is currently underway designed to test a series of airborne EM anomalies identified in the 2020 survey and three new targets identified through ongoing geological interpretation.

During the year and post period, Greatland expanded its strategic footprint in the Paterson to over 1,000 square kilometres through the acquisition of the Canning and Rudall exploration licence applications, which contains similar magnetic anomalies to the Havieron deposit, and by acquiring additional tenements in the Paterson South region.

At the Panorama tenement, a 362 line km heliborne electromagnetic and magnetic survey over part of the tenements was undertaken and at Ernest Giles, our land holdings increased as Greatland applied for two additional exploration licences, Mount Smith and Welstead, contiguous to the current live licences of Peterswald and Calanchini.

During the year, a retrospective adjustment has been made to reflect a change in accounting policy of exploration and evaluation expenditure. Note 1.19 within the financial statements provides further details regarding the change in accounting policy.

In addition, the Group transferred £17,091,622 of capitalised exploration costs associated with the Havieron project from intangible assets to mine development during the year following the commencement of the construction of the box cut and the decline during the year .

Corporate

Greatland successfully transitioned the leadership and management of the Group to Shaun Day as Chief Executive Officer and Executive Director in February 2021. Shaun has extensive industry experience and the required skillset to maximise Havieron and lead Greatland into the future as a development and mining company. Since his appointment, Shaun has focussed on broadening the capability of the management and technical teams to meet the evolving needs of the Group.

A number of subsequent high quality, new appointments with Otto Richter appointed as Group Mining Engineer, Christopher Toon as Chief Financial Officer and John McIntyre as Exploration Manager has demonstrated Greatland’s growing reputation as a business in the industry and desire to work with a world class asset. This evolution continued post period with the establishment of the Technical Advisory Committee and appointment as a Non-Executive Director of Paul Hallam, an industry veteran with more than four decades of Australian and international resource experience. We are grateful to both Gervaise Heddle, our former Chief Executive Officer, and Callum Baxter who has joined our Technical Advisory Committee, who stepped down from the Board on 12 March 2021 and 31 August 2021 respectively, for their significant contribution to the development of the Group.

In May 2021, we appointed Canaccord Genuity as Corporate Brokers and Financial Advisers to complement Berenberg, Hannam & Partners and SI Capital as we continue to expand our institutional investor base in line with the growth of the Company.

The Company is well positioned to fund its portfolio of projects well into the next financial year. For the Havieron project, Greatland entered into a US$50m loan facility during the year with Newcrest to keep pace with an accelerated development timetable up to project Feasibility. For the Juri Joint Venture, Greatland has benefited from Newcrest initially funding the exploration campaign freeing up cash reserves for our own exploration plans in the Paterson region and across our other projects.

Greatland is committed to safe, responsible and sustainable exploration and we continue to focus on improving health and safety training and processes, and on further strengthening our relationships with the indigenous communities in the areas that we operate as well as on our Environmental, Social and Governance (ESG) focus for developing a responsible and sustainable resources company.

Greatland benefits from operating in a tier one jurisdiction in the state of Western Australia. The remote location, coupled with health protocols and tight border controls has resulted into minimal impact of COVID-19 on operations, as the total number of community cases recorded across the entire state is less than 15 for the year. At Havieron, Newcrest have implemented and maintained measures to reduce and mitigate the risk of the COVID-19 pandemic to its project workforce and key stakeholders, and operations have continued without interruption.

Nevertheless, I would like to reiterate that the health and safety of our staff, partners and stakeholders has always been of paramount importance to the board and it is even more so in our focus now.

Looking ahead

Greatland today is a different looking company to a year ago, as demonstrated by the rapid change and accelerated development progress at our flagship Havieron asset. There is lots to do and whilst our success at Havieron provides an exceptional foundation and cornerstone project on which to build, we are not resting on this. In addition, we have several other excellent prospects, including an enviable footprint in the Paterson region, arguably one of the most attractive frontiers in the world for the discovery of tier-one, gold-copper deposits.

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 increasing value for our shareholders and we look forward to continuing along this exciting journey.

On a macro level, a mix of tailwinds and challenges endure for gold prices. Support exists due to the uncertainty in global markets from ongoing COVID-19 and uneven economic recovery with continuing central bank stimulus and higher rates of inflation. We also believe the gold price will be further supported by supply challenges, as major new gold discoveries in safe jurisdictions are becoming less frequent and as reserves at larger deposits are depleted.

I would like to end by thanking my fellow Board members, the management team and our staff, for their hard work and commitment to the Company. The progress we have taken over the past year is a credit to our management team and their strategy. Finally, I would like to thank all our shareholders for their continued support and feedback. We are working tirelessly to ensure Greatland is maximising shareholder value and we expect that the current year will be at least as successful as this last one has been.

Alex Borrelli

Chairman

Strategic Report

Principal activities, strategy and business model
The principal activity of the Group is to explore for and develop precious and base metals with a focus on gold and copper. The Board seeks to increase shareholder value by advancing the development of current projects, the systematic exploration of its existing resource assets, and by acquiring exploration and development opportunities in underexplored areas.

The Group’s strategy and business model is developed by the Chief Executive Office and is approved by the Board. The Executive Directors who report to the Board are responsible for implementing the strategy and managing the business with the management team.

The Group’s strategy is to develop the Havieron asset, advance projects that have potential for the discovery of large mineralised systems (typically considered in excess of ten million ounces of gold) and pursue opportunities for in-organic growth with a view to safely and sustainably creating wealth for the benefit of all stakeholders.

Business development and performance
The financial year ended 30 June 2021 was a transformational period for the Company. During this period Greatland successfully advanced development and exploration across its portfolio of project assets with significant milestones achieved at the Group’s flagship asset, the world-class Havieron gold-copper deposit in the Paterson region of Western Australia.

After the granting of a mining licence at Havieron (M45/4701) on 9 Oct 2020, Greatland entered into a Joint Venture with Newcrest Mining Limited over this 12 block area for the continued development and expansion of this asset.

Infill and step out drilling during the year has continued to return excellent results demonstrating continuity of high-grade mineralisation at Havieron with expansion of the mineralisation in the North West Crescent and Northern Breccia, Eastern Breccia, South East Crest and Breccia areas. This resulted in a maiden resource of 4.2m oz Au eq announced on 10 Dec 2020.

In Feb 2021, construction activities commenced at Havieron with the quick completion of the box cut and portal to enable the start of the decline in May 2021.

Subsequent to year end, a Pre-Feasibility study was completed and announced on 12 Oct 2021 which outlined the pathway to achieve commercial production within two to three years from commencement of an exploration decline, subject to a positive decision to mine

In addition to the Havieron project, the Group also entered into a JV with Newcrest on two other Paterson licences, Black Hills and Paterson Range East, known as the Juri JV, which sees the Group operate exploration on the licences over the next two years. Newcrest earned a 25% interest on both areas on signing with a right to earn up to 75% interest by spending up to A$20m as part of a two-stage farm-in over five years, including a A$3m minimum commitment for Stage 1.

The Group’s financial position was further strengthened during the year by a loan agreement with Newcrest where the Group have access to a loan facility totalling US$50million for early works and growth drilling at Havieron from the start of the joint venture and up to the Feasibility study. A further £4.4m on the exercise of warrants and options was received by the Group throughout the year. The Group’s cash deposits stood at £6,212,057 at 30 June 2021 (compared to £6,022,745 at 30 June 2020). These funds will be used to accelerate exploration across our key exploration projects, particularly in the Paterson region.

During the year, a retrospective adjustment has been made to the carrying values to reflect a change in accounting policy of exploration and evaluation expenditure.

Previously costs associated with an exploration activity were capitalised if, in management’s opinion, the results from that activity led to a material increase in the market value of the exploration asset.

Under the new policy exploration and evaluation expenditure where the commercial viability of extracting the mineral resource has not yet been established will be expensed when incurred . Once management believe the commercial viability of extracting the mineral resource are demonstrable, which is considered to be following a pre-feasability study or similar, the Group will capitalise any further evaluation costs incurred.

This has resulted in costs associated with the Havieron being capitalised from 1 July 2020, with all prior year exploration and evaluation expenditure expensed when incurred on the basis the commercial viability of extracting the mineral resource was not yet established. The Group transferred £17,091,622 of capitalised exploration costs associated with the Havieron project from intangible assets to mine development during the year following the commencement of the construction of the box cut and the decline during the yea r . Note 1.19 within the financial statements provides further details regarding the change in accounting policy.

Review of key developmen ts by project

Paterson project (Western Australia), one granted mining licence (Havieron) jointly owned by Newcrest Mining who have a 60% stake. Three granted exploration licences; two (Black Hills, Paterson Range East) 75% owned in JV with Newcrest who own the remaining 25%, one (Scallywag) 100% owned, exploration licence applications (Rudall, Canning) 100% owned. Subsequent to year end, ownership in two exploration licences (Black Hills and Paterson Range East) moved to 49% owned in JV with Newcrest. Acquisition of licence areas from Province Resources in September 2021 added two new licences, Pascalle and Taunton and two licence applications in the Paterson South area.

The Paterson project is located in the Paterson region of northern Western Australia. The licences collectively cover more than 567 square kilometres of ground which is considered prospective for intrusion related gold-copper systems and Telfer style gold deposits along with the Havieron gold-copper resource.

During the 12 months to 30 June 2021, the Company together with JV partner Newcrest was granted a mining licence M45/4701 Havieron (9 Oct 2020) under a 21 year term, which covers the 12 blocks of the previous E45/4701 licence.

The company now retains 100% ownership of the remaining blocks of E45/4701 Scallywag. During the 12 months to 30 June 2021 the Company applied for a further four exploration licences E45/5826 Canning, E45/5929 Salvation Well North, E45/5930 Salvation Well, E45/5931 Salvation Well South East in the Canning area of the Paterson region.

Newcrest expanded the drill campaign at Havieron M45/4701 and continued with infill and step-out drilling with very successful results. Newcrest released an Inferred Resource for a portion of the Crescent Sulphide Zone and adjacent breccias, reporting a 4.2m oz Au equivalent resource.

Exploration work over the Scallywag licence E45/4701 consisted of airborne EM surveying, target identification and drilling.

Exploration continued on the Black Hills licence E45/4512 and Paterson Range East E45/4928, with the completion of airborne EM surveys and the identification of a series of targets that warrant drilling in the FY 2022 exploration program.

All exploration costs, other than those related to the Havieron project, were expensed through the statement of comprehensive income during the year on the basis the commercial viability of extracting the mineral resource was not yet established.

Ernest Giles project (Western Australia), 100% owned

The Ernest Giles project is 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.

During the period, Greatland carried out solid geology interpretation and litho-geochemical interpretation of the 2017 and 2019 drilling, with lithogeochemistry used to identify significant alteration and pathfinder patterns at the Meadows target area. The Company was also involved in ongoing Native Title land access agreement negotiations.

A comprehensive review of all data for the Ernest Giles project was carried out later in the year. The Board decided that Greatland should increase its land holdings in the region and applied for two additional exploration licences, E38/3612 Mount Smith and E38/3613 Welstead contiguous to the current live licences of Peterswald and Calanchini.

Panorama project (Western Australia), 100% owned

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

During the period Greatland continued field exploration at Panorama with a 362 line km heliborne electromagnetic and magnetic survey over part of the tenements. Processing and interpretation of data is currently underway.

Bromus project (Western Australia), 100% owned

The Bromus project is located 25 kilometres south-west of Norseman in the southern Yilgarn region of Western Australia. The Bromus project 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.

During the period, Greatland undertook a desktop prospectivity review aimed at collating work done which resulted in resampling historic RC chip, soil sampling, and Minalyze analysis of historic diamond drill core.

Firetower project (Tasmania), 100% owned

The Firetower project is located in central north Tasmania, Australia and covers an area of 62 square kilometers. During the year the Company completed a review of the Firetower Project exploration data, identifying structures potentially controlling the gold mineralisation, and potential down plunge positions that warrant follow up drilling.

Warrentinna project (Tasmania), 100% owned

The Warrentinna project is 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. During the period Greatland undertook a review of the Warrentinna Project exploration data and rehabilitation of old drill pads.

Further details regarding developments by project can be found on the Company’s website at: www.greatlandgold.com

Main trends and factors likely to impact future business performance

The Board considers the following to be the key trends and factors that are likely to impact future business performance:

· General commodity cycle – Commodity prices, base and precious metals and gold specifically, have seen a marked improvement over the last year. The Board maintains a positive outlook for commodity prices, and the gold price in particular.

· Project development – the Company’s partnership with a major mining company (Newcrest Mining) on its flagship Havieron project has seen a rapid advancement of the project. The pace of the development will be laid out by Newcrest Mining as lead partners with Greatland closely involved in discussions. Specific business principles designed to maximise the Company’s chances of long-term rewards from this project are highlighted in the following section (“Principal risks and uncertainties”).

· Exploration results – Management’s ability to successfully execute Greatland’s exploration strategy is a key factor in the future business performance of the Company. Specific business principles designed to maximize the Company’s chances of long term success in this regard are highlighted in the following section (“Principal risks and uncertainties”).

Principal risks and uncertainties

Management of the business and the execution of the Board’s strategy are subject to a number of key risks and uncertainties:

· Mineral exploration – Inherent with mineral exploration is that there is no guarantee that the Company can identify a mineral resource that can be extracted economically. In order to minimise this risk and to maximise the Company’s chance of long-term success, we are committed to the following strategic business principles:

· The board regularly reviews our exploration and development programmes and allocates capital in a manner that it believes will maximise risk-adjusted return on capital.

· We apply advanced exploration techniques to areas and regions that we believe are relatively under-explored historically.

· Exploration work in conducted on a systematic basis. More specifically, exploration work is carried out in a phased, results-based fashion and leverages a wide range of exploration methods including modern geochemical and geophysical techniques and various drilling methods.

· We focus our activities on jurisdictions that we believe represent low political and operational risk. Moreover, we strongly prefer to operate in jurisdictions where our team has considerable on the ground experience. At the present time, all of the Company’s projects are in Australia, a country with established mining codes, stable government, skilled labour force, excellent infrastructure and a well established mining industry.

· Commodity price risk – The principal commodities that are the focus on our exploration and development efforts (precious metals and base metals specifically gold and copper) are subject to highly cyclical patterns in global demand and supply, and consequently, the price of those commodities can be highly volatile.

· Recruiting and retaining highly skilled directors and employees – the Company’s ability to execute its strategy is highly dependent on the skills and abilities of its people. We undertake ongoing initiatives to foster good staff engagement and ensure that remuneration packages are competitive in the market.

· Occupational health and safety – every Director and employee of the Company is committed to promoting and maintaining a safe workplace environment, including adopting COVID safe work practices. The Company regularly reviews occupational health and safety policies and compliance with those policies. The Company also engages with external occupational health and safety expert consultants to ensure that policies and procedures are appropriate as the Company expands its activity levels.

· COVID-19 – The COVID-19 Coronavirus pandemic has caused a severe adverse effect on the business environment on a global scale. The Group may be affected by disruptions to its operations, particularly for the foreseeable future in light of government responses to the spread of COVID-19 or other potential pandemics. The Board is aware of the various risks that the pandemic presents that include but are not limited to financial, operational, staff and community health and safety, logistical challenges and government regulation. At present the Group believes that there should be no significant material disruption to its operations in the near term, but the Board continues to monitor these risks and the Group’s business continuity plans.

· Havieron Joint Venture – The potential future development of a mine at the Havieron Joint Venture depends upon a number of factors, including but not limited to, results from geotechnical, metallurgical and environmental studies, the grant of necessary permits and other regulatory approvals and the ability to secure finance.

Directors’ statement under section 172 (1) of the Companies Act 2006

Section 172 (1) of the Companies Act obliges the Directors to promote the success of the Company for the benefit of the Company’s members as a whole. This section specifies that the Directors must act in good faith when promoting the success of the Company and in doing so have regard (amongst other things) to:

1. the likely consequences of any decision in the long term,

2. the interests of the Company’s employees,

3. the need to foster the Company’s business relationship with suppliers, customers and others,

4. the impact of the Company’s operations on the community and environment,

5. the desirability of the Company maintaining a reputation for high standards of business conduct, and

6. the need to act fairly as between members of the Company.

The application of the Section 172 (1) requirements can be demonstrated in relation to some of the key decisions made during the financial year, including :

· entering into new debt funding to ensure the Group has adequate resources to finance Greatland’s share of the Havieron joint venture during mine development up until the Feasibility study,

· executing a series of agreements to provide a formal framework for the joint venture arrangement and to facilitate the acceleration of early works and further future development and exploration activities at Havieron,

· entered into a farm-in and joint venture agreement to accelerate exploration at Greatland’s Black Hills and Paterson Range East licences without the need for the Company to self fund this activity,

· committed to ongoing exploration campaigns and approved associated budgets that enabled the Company to conduct exploration across its projects,

· worked with joint venture partner to make decisions around the development of Havieron including applying for the necessary regulatory approvals to commence early works activities for a box cut and exploration decline and subsequent to year end the delivery of a pre-feasibility study,

· appointment of an additional corporate broker to expand the reach of potential investors in as part of equity investment activities, and;

· expanding the organisational capability through hiring experienced personnel and establishing a technical advisory committee to enhance the skills and experience required for the Company as it progresses from an explorer, through development and into production

The Directors believe they have acted in the way they consider most likely to promote the success of the Company for the benefit of its members as a whole, as required by Section 172 (1) of the Companies Act 2006.

Greatland has chosen to adhere to the Quoted Company Alliance’s (“QCA”) Corporate Governance Code for Small and Mid-Size Quoted Companies (revised in April 2018 to meet the new requirements of AIM Rule 26). At this time, the Board believes that it is compliant with all ten Principles of the QCA Code.

Read More

Shaun Day

Chief Executive Officer

Enquiries:

Greatland Gold PLC

Shaun Day

+44 (0)20 3709 4900

info@greatlandgold.com

www.greatlandgold.com


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