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Mining News - Greatland's tough day out, Antipa fix beckons: Fitzy

By Barry Fitzgerald

Takeover of Telfer neighbour makes a lot of sense in light of yesterday's $1B wipe-out.

It is not a good look for a newly arrived gold company on the ASX to be slicing 11% from its FY26 guidance and bumping up expected costs.

But that is what the Forrest family-backed Greatland Resources did yesterday, in its first quarterly report on its Telfer mine in Western Australia to the ASX, after its IPO (A$490 million at $6.60 a share) all of five weeks ago.
Throw in a much bigger forecast capex and exploration spending, and the scene was set for a savaging on the market.

By the end of the day Greatland had lost $1.1 billion of its market cap after a $1.65 a share or 24% price fall to $5.24. It is now a somewhat slimmer $3.54 billion company.

The new guidance range for FY26 is for 260,000-310,000oz at an all-in sustaining cost range of $2400-2800/oz. As recently as April, in the lead up to the IPO, Greatland's guidance was for 300,000-340,000oz at $2400-2600oz.

And in the prospectus for the IPO itself there was guidance that a two year "production target" had been set for Telfer to average annual production of 280,000-320,000oz in FY26 and FY27.

Viewed against the two-year prospectus guidance, the new guidance for FY26 is not the shock horror Tuesday's market treatment suggested it was.

The market hate surprises

As a result, the sell-off was likely was overdone. But a surprise is a surprise and the market doesn't like them.
Something clearly happed between April and this week's new guidance.

Remembering that Greatland only got the keys to Telfer from Newmont in December, a fall in expected grades during the June quarter, mainly from inherited run of mine stockpiles, emerged as a concern.

Managing director Shaun Day opened his address on Tuesday's investor call on the quarterly with a roundabout explanation on the issue.

"Let me say that our guidance is different and lower than the outlook previously provided. The reason for that is that as part of the FY26 budget process we undertook a risk assessment," the ex-Northern Star chief financial officer said.

And we felt it was appropriate and prudent to apply a risk factor to the expected grade of the ROM stockpiles, and to some open-pit material to be mined.''

"After we saw the full June quarter numbers, and that gave us multiple data points, we decided to take the decision to ensure that we were taking a conservative approach to delivering FY26 guidance," Day said.

Variable grades in the stockpiles, open pit and underground is nothing new at Telfer. It was not a big deal for Newmont and Newcrest before it as Telfer was but one of many mines in their portfolios.

Single asset pitfalls

But for a single mine operator like Greatland, it is a big deal as demonstrated by the market's savage response to the FY26 guidance downgrade.

The market did not like Grreatland's growth capital guidance for Telfer of $230-260 million either. It was more than $50 million higher than expectations.

There was no apology for that from Day.

"I think the capex story is a very positive story, Really what we are seeing here is moving away from a two-year Telfer mine plan to actually feeling we have got a multi-year plan of a longer life Telfer asset," Day said.

Telfer has been around since 1977 and has so far given up 15 million ounces of gold, and a handy amount of copper.

Under Newcrest, and then Newmont, its days were numbered as a mining operation but a small part of its 20Mtpa processing capacity has long been earmarked for Greatland's Havieron mine development 45km to the east.

The combination of Telfer for as long as its lasts as a mining operation, and one of is two 10Mpta processing trains being utilised to process high-grade Havieron ore, was Greatland's value proposition in its IPO.

How long can Telfer keep on trucking?

The big unknown remains how long will Telfer last as a mining operation. 

Day said the best possible outcome for Greatland would be to have Telfer (mining and processing) in parallel with Havieron when it comes on line in FY27.

To give that ambition more certainty Greatland is stepping up project capex to what it believes will be a peak level, as well embarking on an unprecedented 240,000m drilling program in FY26 on resource growth, resource conversion and some regional exploration drilling.

But as the $1.1 billion sell-off in the stock demonstrated, investor confidence in the Telfer mining operation being around for the long haul is fragile. 

Greatland itself only commits to a "multi-year" mining future at the moment.

Telfer's processing capacity is another thing. 

Havieron will start out at a mining rate 2.8Mtpa and possibly grow to 4-4.5Mtpa, which means there will still be a big surplus of capacity even if mining at Telfer does become a multi-year proposition.

In its prospectus the company said as the only treatment site in the Paterson region with surplus capacity, Telfer enables a "potential hub & spoke" strategy to incorporate accretive opportunities".

The Antipa question

It's why the market is betting Greatland will turn its attention before long to acquire its neighbour in the Paterson province, Antipa Resources.

Antipa was a $180 million company in January and is now valued at $350 million. The value increase reflects a couple of things – the impact of gold price on its standalone Minyari Dome project, and speculation that Greatland will strike before long.

Minyari Dome is actually closer to Telfer than Havieron and has been priced up as a $306 million project producing 130,000oz annually at an AISC of $1721/oz for 10 years-plus from a 3Mtpa processing plant treating 1.5g/t gold ore.

It stands to reason Minyari Dome ore should go to Telfer's hungry treatment plant. 

Should Greatland decide to move, it starts out with 6.1% of Antipa inherited from its acquisition of Telfer and the Havieron interest from Newmont.

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