Greatland Gold PLC on Tuesday announced a ‘transformational acquisition’ of a number of assets from Newmont Corp, the Colorado, US-based gold miner.
Greatland Gold, the Western Australia-focused metals exploration and development company, will buy Newmont’s 70% joint venture interest in the Havieron gold-copper project and its 100% owned Telfer gold-copper mine plus some other assets for up to $475 million.
Under the deal, Greatland Gold will pay $207.5 million cash, issue $167.5 million in stock to Newmont and pay deferred consideration of up to $100 million.
‘The acquisition of Havieron and Telfer is a highly accretive and strategically compelling transaction that has the potential to deliver material value to Greatland’s shareholders,’ the firm said in a statement.
Consolidation of 100% 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 Australian gold-copper mining complex, the firm added.
Newmont is expected to hold up to 20.4% of the enlarged group, with an initial 12 month voluntary lock-in, a further 12 month orderly market arrangement and a relationship agreement in place to affirm alignment. Up to $100 million of the acquisition consideration is deferred until Havieron commences commercial production and is also subject to a gold price hurdle.
Greatland considers that there are significant upside opportunities as a result of the acquisition, including potential extension of the current Telfer mine plan, optimisation of Havieron throughput potential and Telfer processing capacity, supplementation of Havieron ore with Telfer ore, and a potential regional ’hub & spoke’ strategy enabled by Telfer infrastructure.
In connection with the deal, Greatland Gold intends to raise £248.6 million via a placing at 4.8 pence per share.
The placing will be offered by way of an accelerated bookbuild available to qualifying investors, which will be launched immediately.
In addition, the firm aims to raise £6.8 million via a retail offer at the same price.
Greatland’s Chair Mark Barnaba, said: ‘The consolidation of 100% ownership of Havieron and acquisition of Telfer is the opportunity which Greatland has been coveting for the past three years, so we are delighted to be announcing the transaction today.’
Shares in Greatland Gold are suspended at 7.10 pence.
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