The Greatland Resources Valuation Debate

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This story features GREATLAND RESOURCES LIMITED, and other companies.
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The company is included in ASX100, ASX200, ASX300 and ALL-ORDS

Gold miner Greatland Resources March quarter 'beat' on production and costs. With significant projects under development, analysts disagree on valuation.

• The Greatland Resources good news show continued with another quarterly 'beat'
• Havieron project de-risking
• O’Callaghan’s tungsten project offers valuation upside
• Analysts' views are polarised around valuation

By Greg Peel

Greatland Resources ((GGP)) currently mines gold and copper at Telfer in Western Australia’s East Pilbara region.

Greatland is also developing the brownfield Havieron deposit, 45km east of Telfer, which the miner now 100% owns having bought out former joint venture partner Newmont Corp ((NEM)) in 2024.

Havieron is intended to leverage Telfer’s existing processing plant and related infrastructure to process the ore mined.

Greatland also 100% owns the O’Callaghan’s tungsten, copper, lead, and zinc sulphide deposit located 10km south of Telfer.

Telfer

In the March quarter, Greatland produced 82.7koz of gold and 4.1kt of copper and had already pre-reported these numbers on April 8. Gold production was down -4% quarter on quarter and copper was up 17% — both results exceeding consensus forecasts at the time.

New disclosure was costs of $2056/oz, -7% below consensus, with the beat driven primarily by strong by-product credits of $66m, versus $52m in the prior quarter.

Greatland made no change to FY26 quantitative guidance albeit management commented “expect full-year production to be around, or slightly above, the upper end of the guidance range” of 260-310koz.

Macquarie is slightly annoyed, noting consensus is already above the upper end of the guidance range at 316-318koz.

Assuming Greatland produces a further 80koz of gold in the June quarter, Citi notes FY26 production would reach 329koz — 6% above the top end of guidance.

Management also declared “full-year AISC [costs] to trend towards the lower end of guidance range” of $2,400-2,800/oz, when consensus is already below the lower end of guidance at $2,365-$2,377/oz.

Macquarie suggests some cost escalation in the form of diesel (direct and indirect), as well as a bit of an increase in sustaining capex in the June quarter, means management could prefer to be conservative on guidance for the rest of the year.

Greatland is expected to update Ore Reserves in the June quarter. Jarden recently increased its forecast mine life at Telfer to circa 14 years, following the significant increase in Mineral Resources (not the company of that name).

Jarden incorporates an open pit mining inventory of circa 180mt, versus Greatland’s reported Indicated Resources of 102mt, and Inferred Resources of 235mt, for total Mineral Resources of 338mt. 

During the March quarter, the updated Resource for Telfer outlined the potential upside of what Moelis sees as a mature asset about to undergo re-invention. Aided not only by high prices, new discoveries (West Dome Underground) have potential to extend the asset well into the next decade, Moelis suggests.

Prolific free cash flow generation continues, Jarden notes, with Greatland adding a record $260m to the balance sheet in the quarter, taking the net cash balance to $1.2bn, with no debt.

Havieron

The Havieron project has received Federal environmental approval. Jarden views receipt of these approvals as a significant positive de-risking event for the Havieron development, with the Federal permitting pathway widely regarded as more challenging than State.

Greatland continues to progress State approvals in parallel, and remains hopeful of receiving all approvals during FY26. Jarden previously expected full approvals and a final investment decision (FID) in late 2026, followed by around two years of construction for first gold in early 2029.

Whilst Jarden currently maintains this schedule, the broker now sees potential for an earlier Havieron FID, essentially allowing more schedule contingency towards estimated first gold. 

O’Callaghan’s

During the quarter, Greatland released a Resource for O’Callaghans and indicated all options remain on the table for the 100%-owned project.

Management indicated options include divestment or spin-off, but Macquarie notes the least likely option is Greatland developing it due to its focus on Telfer and Havieron.

Jarden continues to view the O’Callaghan’s project as hidden value, currently valuing this globally significant resource at circa $700m, using an ammonium paratungstate (APT) price of US$550/mtu.

Tungsten is a metal that powers defence, aerospace, and semiconductors. China’s export controls have sent tungsten prices surging over 550% in the 14 months to April.

The Valuation Debate

Greatland’s share price is up 34% year to date, outperforming peers.

Despite its recent share price run, Citi sees further upside risk from future drilling results, increased cash generation and further market recognition of O’Callaghans, leading to a Buy rating and $16.00 target.

Macquarie equally views Greatland as trading at fair value at an enterprise value to earnings multiple of 9.1x in FY27 on its estimates. Macquarie retains a Neutral rating and $15.00 target.

Following Greatland’s April 8 pre-reporting of March quarter production, Ord Minnett retained a Buy rating and $19.00 target. This broker has not yet updated on the full March report.

Thereafter, the story changes.

Despite the solid March quarter performance, Moelis retains a Sell rating on the basis of two main factors: Firstly, fundamental valuation remains stretched when taking into account consensus commodity prices.

Where Moelis typically sees 15-50% upside for the other gold stocks it covers, Greatland is trading at 16% premium to what Moelis considers fair value (Moelis’ price target) using a consistent approach to valuation.

Moelis’ target has risen 3% to $11.90.

Secondly, while Moelis expects another healthy quarter to round out FY26, this broker’s estimates suggest we may have seen the best of “legacy” Telfer, with potential for lower production, higher costs and capex (and consequently lower free cash flow) over the next few years, until the project has been refreshed and Havieron has been commissioned.

Moelis expects the period from FY27 to FY29-30, which involves ongoing exploration and redevelopment of Telfer, will set up the business for the next decade and beyond.

If Moelis’ target price of $11.90 stands out against Ord Minnett’s $19.00, Jarden’s target price on its assumed long term gold price of US$3000/oz is $8.50.

Using a long term price of US$3,500/oz would lift Jarden’s valuation to $10.60, US$4,000/oz to $12.70, and US$4,500/oz to $14.70. Jarden estimates the current share price embeds a long term real gold price of circa US$4,350/oz.

Jarden remains cautious of the impact of elevated oil and diesel prices, and second-order impacts (explosives, reagents, spares, logistics, maintenance, etc). While operating and financial momentum remains strong, Greatland screens as one of the more expensive gold producers under the broker’s coverage.

Hence, Jarden maintains an Underweight rating accordingly and a preference for Capricorn Metals ((CMM)).

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