Treasure Chest: Greatland Resources

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This story features GREATLAND RESOURCES LIMITED, and other companies.
For more info SHARE ANALYSIS: GGP
The company is included in ASX100, ASX200, ASX300 and ALL-ORDS

FNArena's Treasure Chest reports on money making ideas from stockbrokers and other experts. Today's idea is Greatland Resources.

By Mark Woodruff

Whose Idea Is It?

RBC Capital

The subject:

This week’s mineral resource update for the Telfer, Havieron and O’Callaghans deposits within Greatland Resources’ ((GGP)) consolidated Telfer hub directly addresses RBC Capital’s concerns around mine-life extension.

It’s also felt management can now lift production beyond 500kozpa at Telfer, with an upcoming reserve update expected to confirm current momentum.

More info:

RBC upgrades its rating for Greatland Resources to Outperform from Sector Perform, citing three key catalysts: resource growth, improved near-term production visibility, and added optionality from O’Callaghans.

Management noted “Telfer and Havierion’s combined resource of 550mt…has the potential to underpin a multi-decade, world class mining hub” while “O’Callaghans is a globally significant tungsten and base metals deposit that presents latent value and optionality within Greatland’s portfolio”.

After setting a higher gold price forecast earlier this week, Macquarie also upgraded its rating to Outperform from Neutral, identifying the stock as its preferred mid-cap gold exposure amid positive catalysts.

Greatland owns a portfolio of key deposits in Western Australia centred around the Telfer region. Its core asset is the Telfer gold-copper mine, a large, established operation incorporating the West Dome open pit and underground, and Main Dome underground.

Better grades at West Dome provide confidence for RBC into the second half of FY26 and support the potential for guidance upgrades.

Macquarie raises its FY26 production forecast to 321koz from 313koz, now above guidance of 260koz-310koz, driven by both stronger-than-expected West Dome grades and outperforming recoveries.

The reintroduction of the sub-level cave and the maiden West Dome underground resource are thought to provide additional optionality.

These underground projects are seen supporting an increase in gold production to more than 500kozpa, alongside Havieron.

Following the December 2025 feasibility update for Havieron, the broker believes execution and capex risks are largely reflected in current valuations and share price performance.

While permitting has yet to be secured, the project remains on track for FY26, with a final investment decision (FID) expected shortly thereafter.

Havieron, located around 45km from Telfer, is a major gold-copper underground development project expected to become a key future feed source for Telfer’s processing infrastructure.

Greatland’s portfolio also includes O’Callaghans, a polymetallic deposit containing tungsten, copper, zinc and lead, which provides longer-term optionality rather than near-term production growth.

It is RBC’s assessment an updated resource for O’Callaghans could unlock value from a largely latent asset not reassessed since Newcrest ownership.

Greatland acquired 100% of Telfer and the remaining 70% interest in Havieron for around – $700m from Newmont Corp ((NEM)) –then owner of Newcrest– in December 2024.

The transaction also included full ownership of the undeveloped O’Callaghans tungsten deposit, located approximately 10km from Telfer.

Prior to this acquisition, Greatland held a 30% interest, with Newmont (previously Newcrest) holding 70%. Newmont announced the takeover of Newcrest Mining in May 2023 and the deal was completed in November of the same year.

The O’Callaghans project is capable of generating around $90m in annual free cash flow (FCF), suggests RBC, although management is expected to sell down to a minority position given the complex product mix, bespoke processing requirements, and its strategic focus on Telfer and Havieron.

Jarden explains recent Chinese export controls have driven tungsten prices up more than fivefold, prompting a reassessment of the value of O’Callaghans.

Just prior to the resource update, this broker derived an initial valuation of around 96 cents per share for O’Callaghans, and incorporated this into its overall valuation, lifting its target price by approximately 14% to $6.40.

Jarden’s analysis assumes a base case ammonium paratungstate (APT) price of US$550/mtu, well below spot levels above US$2,200/mtu, and includes initial assessment of a conceptual 2mtpa underground development producing around 500kmtu per annum.

APT is a refined intermediate product used to price tungsten globally.

Tungsten has been designated a critical mineral by the US since 2018.

China controls around 80% of primary upstream supply from domestic operations and, following a sharp rise in imports of foreign concentrate in recent years, has expanded its dominance to more than 90% of the midstream, explains Jarden.

Valuation sensitivity to higher APT prices is significant, with Jarden’s estimate rising to around $1.5bn at US$700/mtu and approaching $10bn at spot pricing.

Moelis believes O’Callaghans offers useful option value and aligns with the current focus on critical minerals, but considers tungsten less significant than the residual upside potential of Greatland’s gold assets.

Overall, this week’s resource update highlights to this broker the continued scale and optionality of the Telfer deposit.

Higher assumed prices have partly driven the increase, while the inclusion of a maiden West Dome underground resource and extensions at Main Dome underground point to high-grade additions that can complement the base-load, low-grade open pit, explain the analysts.

Moelis expects inventory to continue growing as drilling progresses, particularly across the underground deposits.

While cost and capital risks remain in bringing additional underground mines into production, RBC believes these are manageable given the existing infrastructure.

The new underground sources are also expected to provide a fallback supply of mill feed should Havieron be delayed.

Among daily monitored brokers in the FNArena database that research Greatland Resources, there are two Buy ratings and one Hold. Their average target of $15.77 implies around 39% upside to the $11.35 share price at the time of writing.

That was before Ord Minnett updated its research this morning, which saw this broker re-iterating its Buy rating and lifting its price target to $19 from $18.50.

Ord Minnett’s investment thesis is probably best summarised with the following quote from today’s update:

“Ord Minnett’s investment case for Greatland rests on the company owning arguably the best undeveloped gold and copper resources in Haverion and the nation’s third-largest processing mill at the Telfer project.”

Outside of daily coverage, RBC Capital and Canaccord Genuity have Buy or equivalent ratings, while Jarden and Moelis are Sell-rated and their average target is $11.68.

According to Moelis, Greatland continues to screen as expensive relative to peers despite a material share price decline over the past month.

As this broker’s valuation already incorporates an extended contribution from Telfer, the upgraded resource estimate is unlikely to materially lift valuation at this stage, though it may provide some support for sentiment, the report suggests.

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