Great Boulder Resources Limited (GBR) Earnings Call Transcript & Summary

Great Boulder is a mineral exploration company with a portfolio of highly prospective gold assets in Western Australia. The company's flagship is the Side Well Gold project at Meekatharra located in the Murchison Gold Field. To date, exploration has defined a mineral resource estimate of 668,000 ounces of gold at a grade of 2.8 grams per tonne. I'm delighted to be joined once again by Andrew Paterson, Managing Director of Great Boulder. Andrew today will be walking us through the key outcomes of the recently announced scoping study for the development of the Ironbark Gold deposit at Side Well. We will then move on to a Q&A session. [Operator Instructions] With that, I am pleased to hand over to Andrew.

Thanks very much, Nicola. And thank you to everybody who's taken the time out of their day to register and attend this webinar, and we will be making it available later on for people who missed out. So firstly, I'll just talk through the scoping study, the process that we went through to do the study, the assumptions that are within it and the outcomes that we see from it. So this is all done by Entech Mining, a local engineering consultancy firm, and they've done a really good job. They have been quite conservative, I think, in some aspects of the study, and I'll talk about some of those in a moment. But the key outcomes really is what we've called a production target of 1.2 million tonnes at 2 grams per tonne for 79,000 ounces. So the reason we call out a production target, firstly, is just because of the rules around scoping studies. Given the level of uncertainty inherent in a scoping study, you're not actually allowed to call this an ore reserve. So we call it a production target. It's tonnes and grade. It's what we anticipate being minable within that pit and it includes dilution, and I'll talk a bit about that as well. And really, the key things there is taking that tonnes and grade and applying the various costs and pricing assumptions results at spot gold price, which when we did that announcement was AUD 5,064. That gives us a net present value of $137 million and an internal rate of return of 152%. So those are pretty impressive figures. Now that ranges, if you consider a range of AUD 4,500 to AUD 5,500 per ounce, that NPV figure ranges from $100 million to $165 million. So you can see it's quite logically sensitive to the gold price as really any mining scenario is right now. Now in terms of the design assumptions there, that was based on an open pit optimization at AUD 4,000. So what that means is they optimize the pit shell at AUD 4,000, which considers what is mineable within that pit shell. They then refine the pit shell to put in things like ramps, booms every 20 meters and so on, turn it into a pit design basically. And then they run the cost and profit outcomes based on the pit design rather than the optimization. Now assumptions within the pit design are things like wall angles, bench heights, and it's all fairly conventional gold fields open pit type parameters, things like 5-meter benches using a truck and shovel mining operation with, say, 100 tonne dig basically stock standard gold fields open pit mining. That is based around a 2-stage pit design, and you will have seen in the announcement, the Stage 1 pit is sort of the northern half in effect where the ore body is shallower. And that also includes some inferred resources, which we were careful to state in the announcement. And we would anticipate converting that small amount of inferred resources indicated prior to mining so that it can be updated to a feasibility or pre-feasibility study and an ore reserve. It then moves into a stage 2 pit design, which moves further to the south and gets deeper and into higher-grade material. So the stage 2 production target, I think, was about 2.5 grams per tonne to deliver the overall average of 2 grams per tonne. Now key assumptions within there, the most obvious one is that it assumes off-site processing. So that would be, as an example, Westgold at the Bluebird mill, which is about 25 kilometers away, possibly Meeka Metals at Andy Well, which is about 40 kilometers away or Burnakura, which is on care and maintenance, that's the Monument mining mill, and that's just over 50 kilometers away. So all of those plants are fairly close. Obviously, Burnakura would require them to restart that mill, but that scoping study done by Monument, I understand, is well advanced, and we may see some results from that before too long. Now we have had initial conversations with all 3 parties, and that varies from a meeting with one of them. We have an MOU with Monument, so that's obviously somewhat formalized. And the third one was just what do you think about this? So these are really very high-level conversations, and that's why I haven't gone into any detail. And there certainly hasn't been any costing associated with any of those conversations. So that's something that we really need to nail down in the next few months. Firstly, to discuss with our neighbors whether they have availability in the time frame that we're talking about. And secondly, what sort of dollars per tonne that entails. So obviously, that's one of the biggest assumptions within the scoping study is that cost per tonne and the availability inherent within that. Now the other assumptions, I think, are where it gets quite conservative. So it's assuming a fairly standard contract workforce. So working a variety of shift arrangements from 8 and 6 to 2 and 1, company providing technical staff, so geologists, engineers, surveyors and management, the contractor providing everything else for 3 or 4 trucks, 1 excavator, dozer, grader, water cuts, all that sort of stuff, fill and blast. The other thing is the minimum mining width. Now this is kind of a key technical term for mining is the minimum width at which you can mine these ore blocks. And this study is based on the assumption that the minimum mining width is 5 meters. So the resource model was reblocked, which is to say that each block within the resource model of gold metal estimated within the resource is reblocked to a minimum width of 5 meters. And then if, for example, the ore body within that block is 2.5 meters, it will automatically apply 2.5 meters of waste to that block to get an overall grade assumption. And what that resulted in was an effective dilution of 44%, which is quite high. Now this is a fairly regular tabular steep dipping ore body. And I actually think 44% dilution is perhaps unnecessarily harsh. And I would hope that we could mine it cleaner, and we may be looking at a minimum mining width of somewhere around 3 or 4 meters, which would hopefully make a difference, reducing the dilution and increasing the run-of-mine grade, so get it above 2, hopefully, somewhere higher towards around 2.5 grams per tonne, which we'll be looking at in subsequent rounds of study. And what that also resulted in was the effective mining recovery rate was about 78%. So it means it's leaving 22% of ore in unrecoverable blocks or perhaps sent to a low-grade pad for future processing, assuming the gold price goes up further. Then the last thing really there is sensitivity. So because the scoping study was done at a 30% level of margin of error, we did all the sensitivities at plus or minus 30%. Now initially, I did those for gold recovery, mining costs, processing costs and haulage costs. And then the ASX came back to us and said, you have to do the same for gold price. So if you were wondering why we forecast the gold price outcomes between AUD 3,500 and AUD 6,500, that's simply that it's plus or minus 30% around AUD 5,000. So I wasn't initially going to do that because I think looking at a AUD 6,500 gold price is a bit kind of mad at the moment. When it's just over AUD 5,000, AUD 6,500 is kind of dream time right now, but that's not to say that it might not happen. The ASX were very good with this announcement. They reviewed it intensively for several days. And in fact, it took us 6 days after completing the announcement to get all the compliance stuff done. And that's why this -- it was part of the reason why there are several pages in there of disclaimers and cautionary statements. All of those things are actually mandatory. And people have asked me why there are so many cautionary statements in there. Actually, it's just part of the protocol for a scoping study, so not much we could do about that. And the last thing is timing. So we put in some information there. Now the two big things that are prerequisite for mining. Firstly, the mining agreement -- or 3 things, I should say, not 2. Firstly, the mining agreement. So the nearest or soonest we can get that ratified by the traditional owner group is November when they have the AGM. Now we're hoping to get this mining agreement agreed within the next 1 to 2 months, but it won't actually be ratified until they hold their AGM, which is scheduled for November. As soon as that's ratified by the broader community, then the mining lease can be granted by the mines department. And hopefully, by then, we should have all our technical studies done, so hydrogeology, waste rock characterization, all the things that are now underway. And that will allow us to watch the mining approvals. The WA government mining approvals process typically best case takes around 6 to 9 months, assuming that there's no kind of follow-up questions around the approvals, and we do have a very experienced approvals manager now looking after that process. So assuming, so we start that clock ticking in January, that would put us around the third to early fourth quarter 2026, where we can make a decision to mine. Now while all that's going on, we will be doing things like the infill drilling to upgrade the inferred resource to indicate it. We'll be doing a bunch of detailed metallurgy of gravity recovery, leach characteristics and physical characteristics, so we understand how much energy it takes to mill this stuff and how much gold we'll get out of it. That will be guided to some extent by who we choose for our processing partner because they will potentially have their own requirements for met testing. So all of these things are kind of going along hand-in-hand and in parallel. And so hence, that's the timing that we're looking at. That's definitely the path that the company is pushing towards as fast as we can. So we're trying to, I guess, anticipate any potential hurdles that might lie between us and that decision to mine and take care of them before they eventuate. So with that, I'll hand back to Nicolas. So thanks very much.

Thanks, Andrew, for that very comprehensive update. We'll dive into our questions that we've received. First question, will Great Boulder be capable of substantially self-funding future exploration and development activities from Ironbark cash flows based on the findings of this scoping study?

That's a good question. So actually, one thing that I forgot to mention earlier was CapEx. So pre-start CapEx for Stage 1 is modeled at around $3.1 million. And in fact, for Stage 2 is another $600,000, so total CapEx of $3.7 million, which is very low. There is obviously operating expenditure once we commence mining. So there is a drawdown period before we start to build the gold inflow back up and get into profit and hence that internal rate of return of 150%. So once we get that mine to a point where it's actually paid for itself and is generating profits, at that point, we would anticipate being cash flow positive enough to fund our ongoing exploration. So to put that into context, we are aiming by the end of this year to get to this 1 million ounce resource base that I've been talking about for a long time. And I'm sure some shareholders are sick of me mentioning it, but it will be a big milestone to achieve. And then going into next year, we'll still be exploring -- we'll be doing discovery work and definition drilling, pushing towards the aspirational target of 1.5 million ounces. Now at the moment, we have an exploration target refined or defined under the JORC code of 940 million ounces to 1.1 million ounces, so those are targets that we already know. We've already done at least some drilling, and we have a good basis for assuming success on those targets. There are other targets that we've not drilled at all yet, and we will be getting into those in 2026, and they'll be contributing a lot of that growth. So the long story short is that we think we should be getting pretty close to 1.5 million ounces within the next couple of years, assuming success on those other targets. We'll always be considering other options for growth. And in terms of inorganic growth, we're always looking for opportunities in our region. We've not found any that makes sense right now, but we're always keeping an eye open for that as well. So I think once we're into production with Ironbark, that really gives us this kind of perfect opportunity like the holy grail for an explorer to become self-sufficient and avoid further dilution, which would be a fantastic outcome for everybody.

Thanks, Andrew. Second and looks like our last question for today. Do you consider Great Boulder to have graduated from an exploration company to a gold development company?

Yes. Yes, I really do. And this is pretty exciting for any explorer to get to this stage. When you pick up a project and you think this looks pretty good and we started drilling it for real, I guess, in 2021, which is when we first started to get to grips with what we had. And it didn't take us long before we figured we had a transformational opportunity. And here we are in 2025, that transformation is now starting to take effect. So I'm really cognizant of the fact that some of our shareholders have been very patient over this period and been in the stock since even before then, some of them came on board with the Whiteheads acquisition when I first started in 2019. So it's been a great story. It's been slow progress over those years. We've had some quiet times. We've had some good times. We're just about on the cusp of being a developer, and that's what we're really pushing towards now. So it's very much what I'm focused on. And there's a whole lot that goes into that. At the moment, we've got about 10 employees. To start a mine, we would probably need to have, I don't know, 20, 30, 40 employees. It's a real transition for a small technical-based team to expand and bring on all these other skills. We'll be looking at what we need to do to achieve that over the next 12 to 18 months and make sure we're ready to go.

Thanks, Andrew. We have received one more question, and I'll put this to you now. Which areas of the Side Well project do you expect will contribute the most resource growth? And are there specific areas that you're going to be focused on?