Greatland Gold PLC (GGP.L) Two JV Agreements and Funding for Havieron

Newcrest and Greatland sign new landmark agreements to facilitate the acceleration of early works and expanded exploration activities at Havieron

In addition, Newcrest and Greatland sign a second farm-in and joint venture agreement (the “Juri Joint Venture”) for Greatland’s Black Hills and Paterson Range East licences

Greatland Gold plc (AIM:GGP), the precious and base metals exploration and development company, is pleased to announce that the Company, and its wholly-owned subsidiary Greatland Pty Ltd, have signed a series of new agreements, including a fully formed Joint Venture Agreement for the Havieron project (the Havieron Joint Venture Agreement), a new Joint Venture Agreement for the Black Hills and Paterson Range East licences (the Juri Joint Venture and Farm-in Agreement) and a Loan Agreement for Havieron (the Havieron Loan Agreement), with Newcrest Operations Limited (“Newcrest”), a wholly owned subsidiary of Newcrest Mining Limited (ASX:NCM).

Background

· In March 2019, Greatland signed a four-stage Farm-in Agreement with Newcrest, to explore and develop Greatland’s Havieron gold-copper deposit in the Paterson region of Western Australia.

· Excellent drilling results to date from Newcrest’s ongoing exploration campaign have highlighted the world-class potential of the Havieron gold-copper deposit, and the parties see real potential to further expand the deposit, with the extent of the Havieron system still to be defined.

· In addition, the Havieron project is progressing faster than was anticipated at the time the Farm-in Agreement was entered into, with early works expected to commence in late 2020 or early 2021, subject to receipt of required approvals.

Summary of Agreements

· Building on recent success at Havieron: Newcrest and Greatland have entered into a series of new agreements in relation to Havieron, most notably, the Havieron Joint Venture Agreement and the Havieron Loan Agreement. These new agreements are expected to deliver the following primary benefits to Greatland :

o The agreements provide a formal framework for the arrangements between the two parties beyond the existing Farm-in Agreement, and facilitate the expansion of exploration activities at Havieron and the acceleration of early works, including the construction of a box-cut and decline.

o The Havieron Loan Agreement secures funding for Greatland (approximately US$50m), which, together with Newcrest’s existing sole funding commitments under the Farm-in Agreement, is expected to fund Greatland’s share of joint venture costs (based on current forecasts) up to the completion of Feasibility Study.

· Havieron Joint Venture Agreement (“Havieron Joint Venture” or “Havieron JV”): A fully-termed Joint Venture Agreement between Newcrest and Greatland to govern the joint venture ownership and operations of the Havieron project .

o In order to support the planned acceleration of the construction of a box-cut and decline and a faster rate and scope of planned spending on exploration activities, the parties have agreed to fund these activities in proportion to their post-Farm-in period interests (70% Newcrest; 30% Greatland).

o In order to incorporate ongoing growth drilling activities, the parties have agreed a structure that allows Newcrest to deliver the Pre-Feasibility Study in Stage 4.

o Consequently, Newcrest has now met the Stage 3 expenditure requirements and is entitled to earn an additional 20% interest in the Havieron Joint Venture for an overall 60% interest (40% Greatland).

o Newcrest’s total farm-in commitment remains to incur expenditure of US$65m and deliver a Pre-Feasibility Study to earn 70%.

· Havieron Loan Agreement: Provides for a loan facility of US$50m from Newcrest to Greatland, at an interest rate of LIBOR + 8%, which is expected (based on current forecasts) to fund Greatland’s share of joint venture costs, including Early Works and Growth Drilling, up to the completion of the Feasibility Study.

· New exploration joint venture (“Juri Joint Venture” or “Juri JV”): In addition to the Havieron-related agreements, Newcrest and Greatland have entered into a farm-in and joint venture agreement to accelerate exploration at Greatland’s Black Hills and Paterson Range East licences:

o Newcrest immediately receives a 25% interest in both licences and has the right to earn up to a 75% interest in the licences by spending up to A$20m as part of a two-stage Farm-in over five years, including an A$3m minimum commitment for Stage 1.

o Greatland has previously identified a number of high-priority targets across the two licences, many of which display similar geophysical characteristics to the Havieron gold-copper deposit.

o Greatland retains 100% ownership of both the Scallywag and Rudall licences which do not form part of the Juri Joint Venture.

Key Upcoming Milestones

· Initial Mineral Resource on Track: Initial Inferred Mineral Resource Estimate for Havieron expected to be delivered in December 2020.

· Early Works Commencement: New camp at Havieron, with accommodation for up to 230 people, is nearly completed, and construction of box cut and decline is expected to commence late 2020 or early 2021, subject to receipt of required approvals.

· Pre-Feasibility Study: A Pre-Feasibility Study for Havieron, including an Indicated Mineral Resource Estimate, is expected to be delivered by late 2021.

· Juri JV Exploration Activities: Drilling of high-priority targets, including Parlay and Goliath, is expected to commence in early 2021.

Gervaise Heddle, Chief Executive Officer of Greatland Gold, commented : “These new agreements with Newcrest represent a landmark moment for Greatland Gold, both in structuring the next stage in Havieron’s development and progressing our exploration efforts across the Paterson region.

“The Havieron Joint Venture Agreement formalises our relationship with Newcrest beyond the existing farm-in, and with this agreement in place, we expect to progress rapidly towards the potential establishment of mining operations over the next two to three years. Importantly, the new Havieron Loan Agreement with Newcrest secures for us our share of the necessary monies to accelerate activities at the Havieron project. Indeed, based on current forecasts, we now expect to be funded for our share of expenditure, including the costs associated with the construction of the decline and an expanded exploration programme at Havieron, up to the completion of the Feasibility Study. With all this in place, Newcrest and Greatland can now accelerate our efforts and work together towards realising the world-class potential of this exciting project.

“The Juri Joint Venture with Newcrest for the Paterson Range East and Black Hills licences represents an affirmation of our belief in the potential of these areas and one that we expect will maximise the long-term strategic value of these licences. By early 2021, we expect to be moving forward with multiple exploration campaigns in the Paterson as we advance exploration at the Havieron Joint Venture, the Juri Joint Venture and across Greatland’s 100%-owned licences.

“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 building shareholder value and, with these key agreements now in place, we look forward to continuing this exciting journey.”

Havieron Joint Venture, Loan Agreement and Deed of Cross Security

Background

In March 2019, Greatland signed a Farm-in Agreement with Newcrest, to explore and develop Greatland’s Havieron gold-copper deposit in the Paterson region of Western Australia. Newcrest has the right to earn up to a 70% interest in the joint venture which includes Mining Lease 45/1287, a 12 block area that covers the Havieron deposit, by completing a series of exploration and development milestones in a four-stage Farm-in. Newcrest may acquire an additional 5% interest at the end of the Farm-in Period at fair market value.

As previously announced on 1 April 2020, Newcrest has satisfied the Stage 1 Commitment and Stage 2 Commitment and has earned a 40% interest in the Havieron Joint Venture (40% Newcrest, 60% Greatland). Subsequently, in accordance with the terms of the Havieron Joint Venture announced today, Newcrest has now met the Stage 3 expenditure requirements and is entitled to earn an additional 20% interest in the Havieron Joint Venture (60% Newcrest, 40% Greatland).

Havieron Joint Venture Agreement

· The Havieron Joint Venture Agreement will govern the joint venture ownership and operations of the Havieron project in the area covered by Mining Lease 45/1287 which includes the Havieron gold-copper deposit (the “JV Area”) . The current intention of both parties is, that, subject to a successful exploration programme, a positive Feasibility Study outcome and Decision to Mine, the ore from the proposed Havieron Joint Venture will be toll processed at Newcrest’s Telfer Gold Mine (“Telfer”), which sits approximately 45km to the west of Havieron.

· In order to support the planned acceleration of the construction of a box-cut and decline and a faster rate and scope of planned spending on exploration activities, Greatland has agreed to fund 30% of Early Works and Growth Drilling Expenditure prior to completion of the farm-in :

o “Early Works Expenditure”: all capital and operating expenditure incurred during the Farm-in Period for activities such as the construction of a box-cut and decline and associated early works including camp, access roads, bore fields, offices and related surface infrastructure, but does not include any expenditure incurred for modifications to the Telfer Gold Mine processing facility or for the construction of any haul road (which are subject to a Decision to Mine). The commencement of the construction of the box-cut and decline is subject to receipt of required approvals.

o “Growth Drilling Expenditure”: all exploration expenditure in connection with growth drilling on that part of the JV Area being outside of the area of the Initial Inferred Mineral Resource which is expected to be delivered in December 2020.

o Greatland’s obligation to contribute to Early Works Expenditure and Growth Drilling Expenditure, in aggregate and prior to the completion of the Pre-Feasibility Study, will be capped at the amount of the Facility A Commitment (US$20m) or such greater amount as provided by Newcrest.

· In order to incorporate ongoing growth drilling activities, the parties have agreed a structure that allows Newcrest to deliver the Pre-Feasibility Study in Stage 4 (Pre-Feasibility Study originally to be delivered in Stage 3):

o If Newcrest incurs an additional US$25 million by way of Farm-in Expenditure (other than Early Work and Growth Drilling Expenditure) in relation to the Havieron Joint Venture within a period of 24 months from the date following satisfaction of the Stage 2 Commitment, Newcrest will be entitled to earn an additional 20% interest (cumulative interests 60% Newcrest; 40% Greatland). Newcrest has met this expenditure requirement for the Stage 3 interest.

o If Newcrest then incurs an additional US$20 million by way of Farm-in Expenditure (other than Early Work and Growth Drilling Expenditure) in relation to the Havieron Joint Venture and also delivers a Pre-Feasibility Study within a period of 24 months, Newcrest will have the right to earn an additional 10% interest ( cumulative interests 70% Newcrest; 30% Greatland). The Pre-Feasibility Study must be supported by an Indicated Mineral Resource.

o Newcrest retains its option to acquire an additional 5% interest at fair market value ( cumulative interests 75% Newcrest; 25% Greatland). Fair market value will be determined by negotiation between the parties, or, if the parties are unable to agree, then by an independent valuer .

· Newcrest has now met the Stage 3 expenditure requirements and is entitled to earn an additional 20% interest in the Havieron Joint Venture for an overall 60% interest (40% Greatland).

· The Joint Venture Management Committee will be comprised of a maximum of five representatives . As at Establishment Date, N ewcrest shall be entitled to appoint three representatives and Greatland shall be entitled to appoint two representatives to the Management Committee.

· Following the delivery of a Feasibility Study, the Management Committee will meet to consider a Decision to Mine. A unanimous vote by the Management Committee is required to approve a Decision to Mine. If a Decision to Mine is not approved by a unanimous vote, then the party who voted in favour shall have an option to purchase the non-approving party’s interest at fair market value.

· As part of the joint venture, Newcrest and Greatland have entered into standard cross security arrangements which in the case of Greatland will also secure repayment of the Havieron Loan.

Havieron Loan Agreement

· In order to support the expanded scope and pace of activities at Havieron, Newcrest has agreed to provide funding of up to US$50m to Greatland via two US Dollar loan facilities, Facility A and Facility B, at an interest rate of LIBOR+8%. The Loan Agreement is expected (based on current forecasts) to fund Greatland’s share of joint venture costs, including Early Works and Growth Drilling, up to the completion of the Feasibility Study.

o “Facility A”: a loan of up to US$20m, or a greater amount if provided by Newcrest, for Greatland’s 30% share of Early Works and Growth Drilling prior to the completion of the Pre-Feasibility Study. Greatland’s obligation to contribute to Early Works Expenditure and Growth Drilling Expenditure, in aggregate, will be capped at the amount of the Facility A Commitment.

o “Facility B”: a loan of up to US$30m for Greatland’s share of joint venture expenditure, post the completion of the Pre-Feasibility Study, but prior to the completion of the Feasibility Study.

o Scheduled quarterly repayments of the loan(s) will occur once production commences at Havieron with repayments comprising 80% of quarterly “Net Proceeds” (revenue from sale of Greatland’s share of JV product less statutory royalties, royalties payable under the JV ILUA, all charges paid by Greatland under the Tolling Agreement with Newcrest, and Greatland’s share of Joint Venture operating expenditure for that quarter).

o Greatland may prepay all or part of the total outstanding loan balance(s) without premium or penalty at any time.

o If Newcrest exercises its option to acquire the Additional Farm-In Interest , then the purchase price payable by Newcrest to acquire the Additional Farm-in Interest will be set-off against (by way of prepayment of) the total outstanding loan balance(s) at that time.

Juri Joint Venture

Background & Overview

Greatland’s Paterson project , excluding the Havieron Joint Venture (M45/1287), comprises three granted exploration licences and one licence application: Scallywag (E45/4701, granted, formerly “Havieron”), Paterson Range East (E45/4928, granted), Black Hills (E45/4512, granted) and Rudall (E45/5533, application). All four licences are located in the Paterson region of north Western Australia. Over the past few years, Greatland has identified a number of high-priority targets across these licences, many of which display similar geophysical characteristics to the Havieron gold-copper deposit.

As of today’s announcement, the Paterson Range East licences and Black Hills are part of the Juri Joint Venture. The Black Hills licence was acquired by Greatland in November 2017 for approximately A$225,000 in cash and shares. The Paterson Range East licence application was granted to Greatland in September 2018 for minimal upfront cost. Greatland retains 100% ownership of both the Scallywag and Rudall licences which do not form part of the Juri Joint Venture. Newcrest retains a right of first refusal over the Scallywag licence under the Havieron Joint Venture Agreement.

Juri Farm-in & Joint Venture Agreement

· Newcrest has the right, but not the obligation, to earn up to a 75% interest in the Paterson Range East (E45/4928) and Black Hills (E45/4512) licences (the “Juri Joint Venture”), an area of approximately 249 square kilometres, by spending up to A$20m as part of a two-stage Farm-in over five years.

o Initial Participating Interest: Newcrest immediately receives a 25% interest in the Paterson Joint Venture in consideration for entering into the Stage 1 Commitment.

o Stage 1 Commitment (the “Minimum Commitment”): Newcrest must satisfy the Stage 1 Commitment by incurring and/or funding A$3m in expenditure within 24 months to earn an additional 26% interest (cumulative 51% interest) in the Paterson Joint Venture (if A$3m in expenditure has not been incurred, the balance must be paid to Greatland).

o Stage 2 Commitment: if Newcrest incurs and/or funds an additional A$17 million in expenditure in relation to the Paterson Joint Venture within a period of 36 months from the date following satisfaction of the Stage 1 Commitment, Newcrest will have the right, but not the obligation, to acquire an additional 24% interest in the Paterson Joint Venture (cumulative 75% interest).

· Greatland will be the Manager of the Juri Joint Venture until the end of calendar 2021 (the “Initial Period”). Newcrest will have the right, but not the obligation, to be appointed as Manager at the end of that Initial Period. Following technical review by both parties, Greatland and Newcrest have agreed an exploration programme for the Juri Joint Venture during the Initial Period.

· The 2021 exploration programme for the Juri JV is expected to include the following activities:

o Drill testing of the Parlay target, a discrete magnetic anomaly with coincident gravity response in the south-west of the Black Hills licence.

o Drill testing of several high-priority targets across the Paterson Range East licence, including Goliath, Outamind and Los Diablos.

o Further geophysical work to identify and prioritise other targets including Black Hills and Prefect.

· As part of the joint venture, Newcrest and Greatland have entered into standard cross security arrangements .

Overview of Greatland’s Paterson Project and the Havieron Joint Venture

Greatland’s Paterson project is comprised of the Havieron Joint Venture (Mining Lease 45/1287) , three granted exploration licences (Scallywag, Paterson Range East and Black Hills) and one licence application (Rudall), collectively covering more than 450 square kilometres in the Paterson region of northern Western Australia. The Paterson region is considered to be prospective for Telfer and Havieron style gold-copper deposits.

The Paterson region is currently one of the most active exploration areas in Australia. Recent discoveries by Greatland (Havieron) and Rio Tinto (Winu) demonstrate the potential of the region and highlight the lack of historical exploration, particularly over the extensive areas under cover. As well as hosting several large gold and copper deposits such as Telfer and Nifty, more recent exploration has outlined several other deposits including Magnum (Au), Calibre (Au), O’Callaghans (W, Cu) and Maroochydore (Cu). The region is remote, however, infrastructure is good with several operating mines, roads, formed tracks and rail networks nearby which branch out from the regional industrial hub of Port Hedland 500km to the west.

In March 2019, Greatland signed a Farm-in Agreement with Newcrest Operations Limited, a wholly-owned subsidiary of Newcrest Mining Limited (ASX:NCM), to explore and develop Greatland’s Havieron gold-copper deposit in the Paterson region of Western Australia. Newcrest has the right to earn up to a 70% interest in Mining Lease 45/1287 by spending US$65 million and completing a Pre-Feasibility Study. Newcrest may acquire an additional 5% interest at the end of the Farm-in period at fair market value. The Farm-in Agreement includes tolling principles reflecting the intention of the parties that, subject to a successful exploration programme and Feasibility Study, the resulting joint venture ore will be processed at Telfer, located 45km west of Havieron.

As of today’s announcement, the Paterson Range East licences and Black Hills are part of the Juri Joint Venture. Greatland retains 100% ownership of both the Scallywag and Rudall licences which do not form part of the Juri Joint Venture. Newcrest retains a right of first refusal over the Scallywag licence under the Havieron Joint Venture Agreement.

A map of the Havieron Joint Venture and Greatland’s Paterson licences can be found on the Greatland Gold website at: https://greatlandgold.com/paterson/


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