Greatland Resources Limited (GGP) Earnings Call Transcript & Summary

Good day, and welcome to the Greatland Resources June Quarter 2026 Investor Call. [Operator Instructions] And finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Shaun Day, Managing Director to begin the conference. Shaun, over to you.

Thanks, Kevin. Welcome, everyone, and thanks for taking the time to dial in on a busy reporting day. I'm pleased to present Greatland's June 2026 quarterly results. Joining me here in the room is Otto Richter, our Chief Operating Officer; Monique Connolly, our Chief Financial Officer; Rowan Krasnoff, our Chief Development Officer; plus Andrew Bowler, our Head of Investor Relations. Just turning to Slide 5. Firstly, I'd like to start by pointing out that Greatland's strong operating performance for the full year FY '26, having achieved 329,000 ounces. We meaningfully beat guidance and did better than $200 below the range for all-in sustaining cost guidance. And in parallel, we delivered our key growth and drilling programs in line with guidance. The production and all-in sustaining cost outperformance over the year was primarily driven by the confluence of improved productivities across the open pit and the underground mines, greatly improved gold and copper recoveries along with better-than-budgeted realized copper prices across the year. Now to the June quarter on Slide 6. We delivered another strong quarter, producing more than 79,000 ounces of gold and 3,600 tonnes of copper. All-in sustaining costs came in at just over AUD 2,300 per ounce, which was again below the lower end of our full year guidance. In the quarter, we sold a little less ounces than produced with 75,000 ounces of gold and 3,000 tonnes of copper sold. This delivered operating cash flow of $302 million and a cash build of a further $81 million for the quarter. We closed the year with around $1.3 billion cash in the bank, and Greatland remains debt-free, which puts the company in a very robust position. I'll leave Monique to talk in depth to -- but we finalized the execution of the $500 million corporate debt facility during the quarter as well. This provides around $1.8 billion of liquidity, which importantly substantially derisks and provides confidence we can deliver a considerable growth pathway. And we announced an exceptional Telfer reserve upgrade at the end of June, which include group reserves now increased to 5 million ounces. This includes a 1.1 million uplift to bring Telfer's reserves to 1.8 million ounces. The Telfer reserve uplift defined a multiyear Main Dome underground reserve and secured a multiyear baseload open pit feed with further growth to come from undertaking studies at West Dome underground and a potential sublevel cave to open up the Vertical Stockwork Corridor. Our record surge in Telfer drilling continues, and we are increasingly confident of continued growth in reserves and resources. With that, I'll now hand across to Otto to speak to the operations.

Thank you, Shaun. Turning to Slide 8. We will now look at the key drivers for this quarter's strong performance. Looking at West Dome open, pit first, the open pit total material mined again saw an increase quarter-on-quarter to 7 million tonnes. This is our sixth consecutive quarter-on-quarter increase in total material mines since Greatland took ownership and represents a 59% uplift in productivity since the March quarter last year. The continued growth is a result of improved productivity, while also a focus on bench turnover as they open up larger, more productive working fronts. Thus, we are now just starting to see the benefit from our investment in the open pit fleet with the new Cat 6060 digger and our refreshed truck fleet improvement equipment availability. The open open pit mill feed grade notched down slightly from 0.49 grams to 0.44 as we saw a higher proportion of our partially costed material or lower-grade material being fed directly to the processing plant rather than being stockpiled, which is in line with our mine plan. While the result is slightly lower average grades processed, it avoids rehandling costs and has the added advantage of preserving more of our higher-grade ROM stockpiles. Stage 7 growth stripping continues with 2.7 million tonnes waste mined for the quarter at a strip ratio of approximately 2.3, down again from the 2.7 last quarter. This downward trend is pleasing and is expected to continue as more ore is exposed and ore contribution increases. The overall strip ratio design strip ratio is approximately 1.1, as we've previously announced. The open pit grades reconciled as expected in the quarter, which is a very positive sign that our enhanced grade control system continues to deliver improved reconciliation outcomes. Then turning to the Main Dome Underground. Our underground ore mined again exceeded 300,000 tonnes, in line with our previous quarter's performance. The underground development saw a 6 quarter of record development with 1,945 meters, including almost 400 meters of growth capital development. The second development drive to West Dome underground progressed by 240 meters and was 92% completed at quarter end. We then turn to Slide 9, where we can see the processing outcomes for the quarter. We milled 5.2 million tonnes at 0.53 gram per tonne gold head grade with milled tonnes up and grade down quarter-on-quarter. The result was a slight decrease in ounces produced compared to the prior quarter, but highlighting our recoveries were tremendous again. In the September quarter, we achieved the highest quarterly gold recovery at Telfer since 2010 with 88.6% recovery. Pleasingly, we have maintained the strong recovery rate for the fourth straight quarter with 86.8% recoveries for gold in the June quarter, and our copper recoveries were also strong at 81.5%. Moving on to the stockpiles. This quarter, we processed about 0.5 million tonne of ROM stockpiles with an estimated 1.4 million tonne at 0.68 grams per tonne remaining at quarter end. Our total stockpile drawdown of 1.3 million tonnes for the quarter was broadly consistent to the prior quarter and included the trialing of portions of the historic low-grade stockpiles. The results of these low-grade stockpile trials were broadly as expected and have been incorporated into the FY '27 processing schedule. We also note that our higher-grade stockpiles will be utilized for mill feed blending throughout the remainder of FY '27. On projects, the TSF 8 Stage 4 construction is ongoing and scheduled to complete in the third quarter of FY '27 and and will provide capacity out to the second half of FY '28. I'll now hand over to Monique to speak to the costs.

Thanks, Otto. As Shaun outlined earlier, we achieved an all-in sustaining cost of $2,312 per ounce for the quarter and $2,179 for the year, delivering a healthy beat to the $2,400 to $2,800 ounce guidance range. This is a great outcome driven by strong ounce production, good cost control and stronger than budgeted copper byproduct credits from current copper prices. Our all-in sustaining margin for the quarter was 4,156 ounces, resulting in an all-in sustaining margin of 64%. Looking at the key operating cost items, mining costs of $91 million increased as planned due to higher total material moved. Processing costs of $71 million were lower than the prior quarter as there was no maintenance shutdown scheduled in the June quarter and due to processing of less Stage 2 material, which requires more reagents and consumables. Sustaining CapEx of $32 million was higher than the previous quarter as planned due to a gas turbine overhaul in the power plant and increased underground development. And site service costs of $26 million was in plan with -- was in line with plan and the previous quarters. Turning to cash flow and finances. We generated revenue of $545 million from sales of 75,000 ounces of gold and 3,500 tonnes of copper, noting that sales of $20 million were completed in late June with cash not received until after the quarter ended. Gold sales were achieved at an average realized price of $6,468 per ounce. This resulted in Telfer's operating cash flow of $302 million and $81 million cash build, which was after a tax payment of $87 million for the March tax installments. We closed the quarter with $1.3 billion of cash and no debt, having executed the $500 million corporate debt facilities during the quarter. Greatland remains fully exposed to any upside in the gold price with downside protection via gold put options out to June 2027 at an average strike price of $4,650 per ounce. From a tax perspective, I've talked to the $87 million paid in the June quarter for the March tax installments. The June quarter installments of $64 million were paid this month and will now commence monthly installments for FY '27 with a final catch-up tax payment forecasted for the December quarter of this year, the value of which is being estimated and will be included in our FY '26 annual financial report, which will be released next month. Turning to growth capital. As you know, FY '26 is a significant year of investment at Telfer with a view of multiyear life extension. Our growth capital program at Telfer has progressed well over the year, having been in line with our growth capital and resource and exploration guidance spend. At Telfer, we invested $59 million during the June quarter across TSF 8 Stage 4 lift construction, which is scheduled for completion in the second half of FY '27. West Dome open pit Stage 7 growth stripping underground development across A-Reefs, ESC and West Dome Underground and the Open Pit Mining Fleet Renewal Program. I'll now hand over to Shaun to speak to our recent reserve upgrade.

Thanks, Monique, and I'll take us across to Slide 14. Towards the end of the June quarter, we delivered an updated reserve estimate for Telfer noting that our reserve estimate at Havieron was unchanged. Telfer reserves grew by 1.1 million ounces to achieve 1.8 million ounces. This is an outstanding outcome given we acquired 0 reserves at acquisition in December 2024. The Telfer reserve update is based on only the first half of the FY '26 240,000-meter drilling program, providing the potential for Greatland to continue to deliver inventory growth from the full results of our FY '26 program and together with our new FY '27 drill program. The Telfer reserve upgrade saw group reserves grow to 5 million ounces representing a doubling of combined Telfer Havieron reserves in just under 18 months since acquisition. On Slide 15, you can see visualization of where the reserve upgrades sit at Telfer. The reserves outlined a multiyear Main Dome underground reserves and secures a multiyear baseload open pit feed. Our intention is to continue to grow reserves by infill drilling, noting some 6.1 million ounces of resources sit outside that present reserve, with 3.5 million ounces within that West Dome Open Pit and plus another 2.6 million ounces sitting in the underground across Main Dome, West Dome Underground and that Vertical Stockwork Corridor. In terms of the underground, we're undertaking studies to deliver growth and convert indicated material into reserves is also underway at West Dome Underground and for that Vertical Stockwork Corridor. Also of note, and you can see this in the top right, is the potential to convert 42% more gold from inferred resources that's just treated as waste within that West Dome Open Pit reserve shell, which has the potential to materially reduce strip ratios. If we turn across to Slide 16, we can see the new Pinnacles discovery. This was an exciting development during the quarter that materially enhances the potential of our West Dome Underground project. The pinnacles program originated from our exploration team who wanted to test their geological model for the extent of that West Dome Underground structure. The whole, not just intercepted structure, but for the West Dome underground. But it returned an intersection of close to 60 meters true width at 6.5 grams gold and plus 0.1% copper. Importantly, the intersection lies 1.2 kilometers, a long trend of that West Dome Underground resource and shows good potential for the continuation of mineralization structures between that Pinnacle hole and across to the existing West Dome Underground. The Pinnacles target remains open to the south with follow-up also required to the north of the West Dome underground. Further drilling has been planned to confirm the tenor and extent of the mineralization between the West Dome underground and the Pinnacles intersection as well as up to the south. Overall, it's a great indicator of West Dome Underground's potential to genuinely transform the Telfer underground. Now to our guidance, which is captured on Slide 18. It's worth pointing out that FY '27 will be a year in which we began the execution of our organic growth strategy, underpinned by the full-scale development of Havieron, and the early works being undertaken on the West Dome Underground. We will commence investing in both these exciting projects in FY '27. But of course, we won't receive the benefits of our investment until subsequent years. with the first ore from West Dome underground presently expected in FY '28 and the first ore from Havieron through the mill in FY '29. Production and operating cash flows from Telfer, along with our really healthy balance sheet will be important enablers for Greatland delivering growth projects at both Telfer and Havieron concurrently. To this end, we expect to produce 260,000 to 300,000 ounces at Telfer for the FY '27 year at an all-in sustaining cost of between AUD 2,900 and AUD 3,330 per ounce. Production is anticipated to be modestly weighted to the second half due to open pit scheduling, whilst also noting that we have our major process plant shutdown at Telfer during this first quarter. Production from the open pit and underground mine areas are expected to improve on the level seen in FY '26 with the key driver of the reduced production coming from use of lower-grade stockpiles, which are replacing the high-grade stockpiles that were present in the FY '26 process fee. The change in year-on-year all-in sustaining cost in FY '27 are largely a function of the denominator from the lower gold production, increased open pit total material movements, albeit at more efficient unit rates and lower copper production along the broader inflationary pressures, which you see across the sector. Growth capital at Havieron is guided at $365 million to $435 million with substantive investment to commence following receipt of the secondary approvals, which we expect to receive in the coming weeks. We continue to anticipate first gold from Havieron in FY '29 following project commencement. In terms of Telfer growth capital guidance, it's $315 million to $335 million, which will be split across substantially completing the open fleet pit renewal. As Otto mentioned, we'll bring in another new 6060 Caterpillar digger. Underground development, the majority of which is this early works for West Dome Underground. Pace plant infrastructure. This is specifically for the West Dome underground, although I know it will be beneficial for Havieron in the future and power plant upgrades. We're also, of course, doing those studies on the West Dome Underground and the Vertical Stockwork, and we continue to increase tails capacity into FY '29 and ultimately with a view of being able to join up the TSF 7 and TSF 8 into a single, more efficient structure. Our exploration and resource development spend guidance of $70 million to $80 million, builds on this the record drill surge delivered across FY '26, with more priority being put on infill and resource conversion drilling during '27, intended to grow reserves while a healthy amount of drilling remains budgeted for resource growth and extension drilling. Moving to Slide 19. As mentioned earlier, FY '27 represents a saddle year in Greatland's journey with key investment not yielding the ounce production benefit until subsequent years. Slide 19 outlines Telfer's key investment projects across the year. And when the future material benefit of that growth will be delivered. Our spend on open pit fleet is in addition to the investment we weighed in across this past FY '26 year which is already achieving benefits in terms of the productivity you're observing with 6 consecutive quarters of increased productivity. A majority of underground growth development investment is on West Dome Underground early works including the commencement of the third drive, which will provide haulage directly into Telfer's existing underground crusher and surface hoist, bringing that West Dome underground ore potentially through that very efficient existing infrastructure. These early works are intended to accelerate project delivery following the completion of our West Dome Underground study in FY '27, subject to the outcome of that study. First, development ore from West Dome Underground would be targeted next year. The pace infrastructure will be used both for the West Dome Underground, and the belt feeder where it ties into that Telfer processing plant will benefit the ultimate pace requirements for Havieron. And the TSF lift, we're planning will extend tail dam capacity out to FY '29. Now just to conclude on Slide 21 before we move to the Q&A format. The June quarter rounds out an excellent year for Greatland, one in which the team exceeded guidance and added $714 million in cash to the bank to close with $1.3 billion of cash and no debt. The cash balance and ongoing production from Telfer is a robust platform to deliver a considerable organic growth pipeline of projects. Greatland delivered substantial reserve growth, successfully changing the perception of Telfer to one that now supports an extended mine life. In FY '27 at Telfer, it will be the saddle year for the company in terms of production, but our investments unlock our flagship Havieron project and advance that West Dome Underground, which is expected to deliver significant benefits and growth in subsequent years. And finally, our record drill spend across FY '26 to deliver outstanding resource and reserve growth, and we look forward to continuing that program into this year. as we work to deliver multi-decade integrated Telfer-Havieron gold mining complex. So with that, I'll invite Kevin to open up the call for Q&A.

[Operator Instructions] And your first question comes from the line of Hugo Nicolaci from Goldman Sachs.

Firstly, just picking up your comments on processing costs and the material step down this quarter, but you noted the lower consumables from the lower Stage 2 material. But can you just sort of step us through bit more of the detail there. How much of that's also the lower heap leaching tonnes and sort of what you expect or what you factored into the '27 guidance in terms of processing costs going forward?

Sorry, Hugo, yes, thanks for the question. Look, in terms of the processing costs for kind of the year ahead, we've tried to get that balance right. But because we're putting through some more oxide material, there's a little bit more consumable through that mill, some more reagent use. In terms of -- and also kind of reflects the general inflationary environment. That said, in terms of the dump leach, it's kind of an automatic stabilizer for our business at really high gold prices we can actually take a bit more ore and put it through the mill. That achieves higher recoveries. At a lower gold price, we can put more of that material onto the dump leach, still get the recoveries, albeit over the longer time. So it's all just part of that constant refinement and opportunity we have to optimize the throughput that we have through that processing.

Got it. And then just on Havieron, you've got a development spend next year, sort of a $365 million to $435 million, which I think looks broadly in line with the study late last year. But Obviously, we continue to see significant cost inflation, particularly at underground since the study would have been put together. How are you seeing the overall budget for the project on preproduction spend? And is that a bit over $1 billion still the right number from here?

Yes. Look, what I can say is you guys have done so far so good. We've been pretty open that June 2025 cost estimate clearly, we work in an environment where we're going to be delivering this over 3 years. There will be some inflationary impact of that of course. But we've been using this time well in terms of starting to -- or progressing a number of the contracting. And so far, there haven't been any surprises. So we're pretty pleased in how it's going. But yes, we'll continue to monitor that really closely. And there's just a huge amount of time, energy an effort being done to try to achieve Havieron well. There's no relax about it. We know it's a significant undertaking, but the team is motivated and engaged.

Great. And then maybe just one for one, Monique. It looks like some working capital, favorable impacts in the quarter there. Just confirming you'd continue to expect your payables to build and that sort of thing as your growth CapEx continues to ramp up from here? And then maybe we see that start to unwind on completion of some of these projects?

Yes, correct. That's exactly right. So I think as we start to ramp up CapEx, you'll see that working capital adjustment move and the other one to look out for is our revenue and what's happening with receivables over the quarter ends as well.

Got it. And last one, if I can. Just any comments on your corporate costs. It looks like roughly $35 million in the second half of '26. Is that the right run rate to sort of $70 million a year going forward?

That does sound a little high. So we did have the stamp duty costs coming through off the back of the acquisition of Telfer and Havieron. I think from a corporate, true corporate cost perspective, it's probably more around the $45 million to $50 million mark. And then you've obviously got your exploration costs and some finance costs coming through as well off the back of the debt facility being put in place.

Your next question comes from the line of David Radclyffe from Global Mining Research.

My first question is on guidance. You said it's obviously slightly second half weighted, I was wondering if you could maybe describe some of the potential levers here, such as the underground contributions are relatively flat. So is there any potential here maybe to pull forward some of the West Dome Underground development? And any other factors we should think about that could potentially flex up, I guess, up or down?

Yes. Thanks, David. So as we said, we're a little bit back weighted. That's multifactorial, but the 2 main factors are just the mining sequence, particularly on that open pit and then the major shutdown, which is actually presently underway, and I'm pleased to say more than halfway complete and progressing in fact, a fraction ahead of schedule. So that's really pleasing because it's good to get these things squared away. In terms of -- you talked about kind of the underground, I think you're exactly right. When we think about opportunities in FY '27, we really think about what we can do around that underground to bring things forward. I don't think that's going to be dramatic, but naturally, we'll be seeking to see what we can do to accelerate that. And I think that West Dome Underground is where there's some slight opportunity to try to break in there and get some development ore and bring that up through the mill this year. I don't want to overstate that. I think it's a reasonably modest volume, but that's the opportunity ahead of us if we can continue to improve the underground productivity rates, which you've seen us do again for 6 quarters in the year since acquisition, but that's the challenge we're setting the team. Can you accelerate that? And of course, that ore from that West Dome Underground is 4-plus grams higher copper. It would be a really nice sweetener. But again, if that came in, it probably wouldn't be until the June quarter, if at all. I don't want to overemphasize that, David, but naturally, those are the kind of things that we'd love to achieve if we can outperform.

Okay. That's clear. So maybe just to push on that a little bit, then when we think about the Vertical Stockwork Corridor on restarting the sublevel cave, obviously, the studies sort of weren't complete, and that didn't make it to the recent resource reserve upgrade. But is there any color you can provide on how those studies are progressing? And when you think about releasing that, hopefully, we don't have to wait for the next annual update. And then given the surplus hoisting capacity, it's still a pretty good gold price, I think most people would think why not start the sublevel cave sooner rather than later.

I'll take that one. For the VSC, so we currently -- because that has to tie into the bottom of the current sub-level cave, we're currently progressing with geotechnical work on that. The resource component of it is mostly done. So it's just finalizing the geotechnical work of tying into the existing sublevel cave and making sure that we get that continuous flow of material. Following that, we will then do the mine planning and financial study, and we're looking at finishing that study in the FY '27 year. It sits very close to existing infrastructure, as you would see on the underground slide. And the benefit there is as soon as we get into it, we don't have to install, for example, major capital like our primary ventilation and hoisting capacity because that is already in place. And as you rightly pointed out, we would definitely make use of that existing infrastructure. I do have to point out that the Vertical Stockwork Corridor is narrower than what the original sublevel cave was. So we're expecting it to come in at a lower production rate than what the previous sublevel cave did. But combined with the West Dome underground, it will give us that full capacity or full utilization potential to tie into our existing infrastructure.

If I can just augment on that, Dave. I just want to kind of point out, look, Otto had significant caving experience out of Newcrest. Obviously, the site itself, Otto ran a very meaningful sublevel cave. And Nick, who's joining us on the 5th of October also comes with the caving background. So as far as what I might describe as the mid-cap goes, I think we have some exceptional and unique caving capabilities, which gives us a lot of confidence around this. There's a 6 million tonne per annum ployed sitting there. We're currently using it for about 1 million to 1.5 million tonnes per year. That is a great opportunity for us to better leverage that infrastructure, the West Dome Underground, the Vertical Stockwork sublevel cave. But equally, and I think Otto kind of referred to this. This is we're very measured about how we view the geo tech. So this is going to be a 1 million, maybe 1.5million, possibly 2 million tonnes, probably 1.5 million tonne sublevel cave. So it's certainly not going to be a return to a 5 million tonne kind of sublevel cave.

Okay. No, that's clear. And then if I can sneak one more in. There's still obviously a lot of news flow around about strategic metals. I haven't managed to go through the entire quarterly yet. So I was wondering, is there any update on O'Callaghans and where you're at and what you're currently thinking?

Yes, I'll take this. This is Rowan Krasnoff. Possibly just by way of reminder for those who aren't familiar with O'Callaghans, this is our Tungsten deposit that we announced our first Greatland resource estimate for in March. That resource demonstrated the project scale and quality. It's one of the world's largest high-grade Tungsten deposits and it's 10 kilometers just to the south of Telfer. As you say, look, Tungsten is a critical mineral and the market for it continues to be really strong. Obviously, our business is gold, copper focused, and we have a very substantial development that we're about to commence at Havieron. So I don't think you'll see us develop it ourselves, but we are focused on how we can create or realize value from it for our shareholders. A number of options remain on the table and that ranges from divestments to joint ventures or a spin-out. We have received interest in the asset, but we want to ensure anything to do with it optimizes and maximizes value for our shareholders. And fortunately, the strength of our balance sheet allows us to be a bit patient and selective in that regard. So I can't be definitive at this stage, but we're working hard on at the moment and expect things to come together this year.