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№ 005 30 filings · 2021-09-16 → 2026-02-23

GREATLAND RESOURCES LIMITED

GGP
Basic Resources Market cap £4,868.5m
Fair value range 27–42p Mid case · £4,400m
Absolute upside -10% vs current market cap
Conviction 4/5 confidence in fair call
Supports the call
  • Recent (Dec 2025) Havieron Feasibility Study provides unambiguous NPV anchor
  • Telfer H1 FY26 delivered A$658m operating cash flow with clean disclosure
  • Sum-of-parts and EV/EBITDA cross-check converge within ~15%
Limits the call
  • ~18% of Havieron FS production target sits in Inferred Resources / Exploration Target categories
  • H1 FY26 reflects record gold price (A$5,756/oz realised); normal-cycle pricing materially widens the range
Methodology

Sum-of-parts NAV (Telfer DCF + Havieron risk-adjusted NPV5 + net cash less commitments)

In one line · bull case

Telfer cash flow at record gold prices fully funds the Havieron development, which an independent FS values at A$2.9bn NPV5 — together giving a fully-funded, debt-free growth story to ~530koz pa from FY27.

In one line · biggest risk

Roughly 18% of the Havieron FS Mine Plan rests on Inferred Resources and Exploration Target in later LOM years, so the back end of the NPV is not yet supported by reserve-grade confidence.

Drivers
AI exposure neutral
Cyclicality high
Moat narrow
Leverage low
Earnings quality high
Management high
Trajectory accelerating

GREATLAND RESOURCES LIMITED (GGP) — Investment Research Note

Executive summary

Greatland is a Western Australian gold-copper producer that owns 100% of the operating Telfer mine and the adjacent Havieron development project in the Paterson Province, acquired from Newmont in December 2024. The trajectory has been transformative: a JV-stage AIM explorer in 2021–2023 became a US$475m-deal consolidator in late 2024, and reported A$343m NPAT on A$977m revenue in its first full half (H1 FY26) with A$948m net cash and zero debt 2026-02 half-year. The single most important valuation point is the December 2025 Havieron Feasibility Study, which underpins a post-tax NPV5 of A$2.9bn (A$5.4bn at A$6,250/oz) for a 266koz/9.6kt-Cu pa, AISC A$1,610/oz operation funded from existing cash plus a A$500m committed bank facility 2026-02 half-year.

Fair value estimate

  • Fair value range: 27p – 42p per share (mid ~35p), implying market cap range £3,500m – £5,500m (mid ~£4,400m).
  • Methodology: sum-of-parts NAV. Telfer DCF at A$4–6bn using H1 FY26 run-rate (annualised EBITDA ~A$1.1bn, free cash flow ~A$775m, at current realised price A$5,756/oz and AISC A$2,176/oz); plus Havieron post-tax NPV5 risk-adjusted to 60–85% of A$2.9bn base case (i.e. A$1.7–2.5bn) to reflect 13% Inferred Resources / 5% Exploration Target in the FS Mine Plan; plus A$948m net cash less A$1,065m pre-production capex commitment and up to US$100m (A$150m) deferred Newmont consideration. Converted at GBP:AUD ≈ 1.95.
  • Current market cap £4,868.5m sits in the upper half of this range. Absolute upside to midpoint: –10% (i.e. modestly overvalued); range spans roughly –28% to +13%.
  • View: fair, with the market broadly capitalising the FS base case and giving partial credit for Havieron upside cases.

Sector context

ICB classification (Basic Materials / Basic Resources) is correct — this is a gold-and-copper miner. Quality profile is above typical small/mid-cap gold peers: tier-one Australian jurisdiction, debt-free balance sheet, 100% ownership of both producing mine and development project, disclosed AISC and put-option downside protection (225koz at A$4,500/oz strike) 2026-02 half-year. Growth profile is well above peers given Havieron adds 266koz pa from FY27. Listed UK gold peers are thin since the LSE delistings: Endeavour Mining (EDV), Pan African Resources (PAF), and Hochschild Mining (HOC) are the most relevant comparators on LSE; Greatland is primarily ASX-traded post-redomicile.

Investment thesis

  • Telfer is generating cash today at multi-decade-high gold prices. H1 FY26 delivered A$658.5m operating cash flow and A$387.4m free cash flow on 154koz sold at A$5,756/oz, with the closing balance materially building cash through the half 2026-02 half-year. This funds Havieron without dilution.
  • Havieron is a high-confidence growth catalyst. The FS confirms a lowest-quartile-cost (A$1,610/oz AISC), 266koz/9.6kt-Cu pa operation with post-tax NPV5 of A$2.9bn base case (~60% of current market cap) and IRR 22.5%, leveraging existing Telfer infrastructure under a "hub-and-spoke" plan; first ore H2 CY26, first gold H2 CY27 2026-02 half-year, 2025-03 H1.
  • Vendor and lender alignment is unusually strong. Newmont took 20.4% stock at acquisition, the FS-stage A$500m debt commitment from ANZ/ING/HSBC/NAB/Westpac is in place, and management retained 30% of Havieron through a 5% option process Newcrest declined to exercise — a value-defending outcome 2024-12 completion, 2022-10 final results, 2026-02 half-year.

Key risks

  • Inferred Resources and Exploration Target in the Havieron FS Mine Plan (13% + 5% of contained gold). These are predominantly in later LOM years and carry an explicit cautionary statement that the Production Target may not be realised 2026-02 half-year. Tail-end NPV is the most sensitive driver.
  • Gold price exposure is very high. H1 FY26 economics reflect A$5,756/oz realised; the company has only modest downside protection (put options at A$4,500/oz strike on ~225koz Jan-26 to Jun-27); a sustained price reset of 20–30% would compress Telfer FCF materially and push Havieron NPV down toward the lower bound of the fair value range 2026-02 half-year.
  • Concentration and execution risk. Single-jurisdiction (Paterson Province, WA), two-asset business with shared processing infrastructure and a US$100m deferred contingent payment to Newmont tied to first five years of Havieron gold production above US$1,850/oz 2025-03 H1.

Value-trap signals

None identified. Revenue is growing rapidly from a transformational acquisition; balance sheet is net cash with new debt facility undrawn; AISC trajectory should improve once Havieron starts; no dividend (capital allocation is to growth); related-party items disclosed are immaterial director participation in the placing at the same price as institutional investors 2024-09 placing. The Newmont consideration includes an arm's-length deferred upside-sharing mechanism, not a sweetheart deal.

Conviction

4 — high.

Anchors: (1) the Havieron FS is recent (Dec 2025), independently underpinned by ~80% Probable Ore Reserves, and gives an unambiguous NPV reference point; (2) Telfer H1 FY26 is real cash, with disclosed reconciliation from EBITDA to free cash flow; (3) sum-of-parts and a check using ~8x annualised EV/EBITDA give converging answers within ±15%.

Limits: (1) ~18% of the Havieron production target rests on lower-confidence resource categories whose NPV contribution is back-loaded; (2) the FY26 result reflects an unusually strong gold price environment and one full half of ownership only — a normal-cycle gold price would meaningfully widen the range.