Greatland unveils A$340m funding solution for Havieron

Greatland, which holds a 30% interest in the Havieron joint venture in Western Australia, has signed a commitment letter, including a term sheet for A$220-million in funding from a syndicate of leading international banks.

The bank debt facility will consist of a A$200-million seven-year amortising term debt facility and a A$20-million five-year revolving credit facility. The term debt facility will have an interest rate of 3.5% a year, reducing to 3.25% a year post project completion, while the revolving credit facility will have a 4.5% a year interest rate.

In addition, Greatland has struck an agreement with Wyloo, under which the Andrew Forrest-led company will subscribe for A$60-million worth of shares in Greatland, amounting to more than 430-million shares.

Greatland will issue Wyloo warrants to subscribe for an additional 352.62-million shares, which if exercised in full, will raise a further A$60-million.

Once completed, the placement to Wyloo will result in the company becoming Greatland’s largest shareholder, holding a 8.6% interest in the company. Upon the exercise of the warrants, Wyloo’s interest in Greatland will increase to 14.6%.

“This is a tremendous announcement for Greatland to have a pathway to being fully funded for its share of the development costs of Havieron. This outcome has been achieved through a combination of equity market support, including today’s execution of strategic investment agreements with Wyloo and with the support from a syndicate of high-quality banks providing a commitment letter in respect of A$220-million of debt funding,” said Greatland MD Shaun Day.

“The significant size of each bank’s commitment together with the strategic support from Wyloo highlights the long-term confidence in the Havieron gold/copper project and the strength of this world-class asset.

“The selection of ANZ, HSBC and ING as our banking partners reflects their quality as financial institutions, commitment to supporting high-quality asset development and their strong relationship commitment throughout the banking process,” he added.

Day said that completing the debt facilities and Wyloo investment will enable Greatland to be fully funded for its share of costs in developing the Havieron project into first production and potential free cash flow which will provide long-term financial stability and create significant value for Greatland and its shareholders.

Wyloo CEO Luca Giacovazzi said the Havieron deposit was one of the most exciting recent mineral discoveries in Western Australia.

“Havieron is a tier one deposit that continues to grow in scale and quality as the understanding of the mineral system evolves,” he said.

“The Paterson range is emerging as Western Australia’s next prolific mining province, and Greatland has an expansive tenement package, which we believe has great potential for further discovery.

“We are excited to be a part of the development of what we expect will be a low cost, modern mining operation with very high environmental and social standards, and proud to be supporting another great Western Australian project.”

Gold major Newcrest Mining in August announced that it would not acquire a 5% additional interest in the Havieron project, at the $60-million price set by an independent valuer, instead keeping its interest at 70%.

The Stage 1 prefeasibility study, which was completed last year, estimated a capital expenditure of A$529-million to develop the asset, which is expected to produce 160 000 oz/y of gold and 6 900 t/y of copper, over an initial mine life of nine years.

An updated feasibility study for the project is on track for completion in the December quarter of this year.