Greatland partner Newcrest launches process to acquire more of Havieron

Greatland Gold updated the market on its Havieron joint venture on Tuesday, after its partner in the venture, Newcrest Mining, had chosen to start the process on its option to acquire an additional 5% interest in the venture from Greatland at “fair market value”.

The AIM-traded firm said Newcrest had issued a notice to Greatland that it wanted to begin the process under the joint venture agreement to seek to agree the option exercise price in the period to mid-February.

Under the agreement, if the option exercise price could be agreed by that date, each party would be required to notify the other of its assessment of fair market value.

If both parties' assessments were within 10% of each other, the option exercise price would be the average of those assessments.

However, if both parties' assessments were not within 10% of each other, the parties would proceed to “independent expert determination”, with the expert being required to determine which of the values nominated by the parties would be the fair market value.

“Following agreement or determination of the fair market value option exercise price, Newcrest has 30 business days to exercise its option to acquire the additional 5% interest,” Greatland Gold said in its statement.

“Proceeds from the exercise will first be used to repay the outstanding balance under the existing Newcrest loan facility.”

As it outlined in previous announcements, Greatland said that following delivery of a pre-feasibility study and meeting the relevant expenditure commitment, Newcrest would be entitled to an additional 10% joint venture interest, resulting in a joint venture interest of 70% to Newcrest and 30% to Greatland.

“If the option referred to above is exercised, Newcrest will be entitled to an overall joint venture interest of 75%,” the Greatland board added.

At 1556 GMT, shares in Greatland Gold were up 15.75% at 14.7p.