- Greatland Gold currently operates six projects within Western Australia and Tasmania.
- Newcrest Mining and Greatland Gold entered into a joint agreement for the Havieron project.
- The exponential GGP share price growth during 2020 was nowhere to be seen in 2021
What is Greatland Gold?
Greatland Gold (LSE:GGP) is a mining and exploration company that currently operates six projects within Western Australia and Tasmania. The group has had a very progressive journey from a junior explorer to a mining and development firm. In order to continue its journey towards growth, it has several seemingly excellent prospects under its umbrella.
The company has planned an admirable footprint in the Paterson region. Undoubtedly, this can be amongst the attractive frontiers within tier-one, gold-copper deposits. As an investor, I am waiting for this to come into action and see how the GGP share price responds.
Let’s take a closer look at operations and the financials.
The Havieron mine
The company’s flagship asset, the Havieron mine, is a long-life high-grade gold-copper deposit. The development and exploration of this mine have immensely increased the appeal of the company’s stock.
Moreover, the joint venture agreement with Australia’s largest gold producer Newcrest Mining Limited has accelerated the development program at the Havieron mine. Under this agreement, a £50 million loan has also been approved. It’s worth mentioning that this has been an excellent growth-oriented agreement for Greatland. Without a doubt, Havieron Mine is en route to achieving all its milestones set for the year 2022.
The GGP share price journey
For most of 2020, the GGP share price was on a bullish run. The stock peaked at 37.35p right before the year came to an end. In 2021, the bullish run came to an end, and the share price dropped. Currently, it’s trading at £13.5. This slump in GGP share price is not unique to the company alone. The entire sector suffered during the year.
Greatland focuses on safe, low-risk jurisdictions. Moreover, it is strategically positioned in highly prospective regions. And with plans on expanding into a large scale multi-commodity mining business, the group looks like it has plenty of long-term growth capabilities.
Financial Position
The mining company has recorded no revenues for the year ended 30 June 2021. That’s because it has yet to start commercial production at its mining sites. Needless to say, this adds a substantial amount of risk. Even more so, given the group is unprofitable, reporting a £5.5m loss in 2021.
The funding from Newcrest Mining should be sufficient to see the Havieron project reach its production stage. But it’s worth remembering that even when the money starts flowing in, the GGP share price will remain susceptible to fluctuating commodity prices. Currently, raw material prices are on the rise, but if demand starts to waiver, the group’s eventual profits may do the same, sending the stock price down in the process.
What’s next for the GGP share price?
Greatland was the investor’s hot pick during 2020 with its exponential growth. And even today, with the joint venture and increased financing, the future of GGP share price seems very promising to me as an investor.
But before jumping on the bandwagon, the high dependency on external funding financing raises my concerns. And with the flagship Havieron project still under development coupled with the company’s zero revenues, I’m keeping this stock on my watchlist for now.
Learn more about Greatland Gold…
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Saima Naveed does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned. Views expressed on the companies and assets mentioned in this article are those of the writer and therefore may differ from the opinions of analysts in The Money Cog Premium services.
