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I noticed that the Greatland Gold (LSE: GGP) share price has remained pretty stagnant for some time now. Let’s dig a bit deeper to help understand what could be next for the company.
Greatland is a precious metals exploration business. Its operations are based in Australia and its flagship mine is the Haverion deposit, which contains both gold and copper.
As I write, Greatland shares are trading for 6p. They’ve remained close to this level for a number of months now. Over a 12-month period, they’ve dropped 25%, which sounds like a lot. However, when shares trade at such low levels, even a small drop on the surface of things can seem a lot. For context, at this time last year the shares were trading for 8p.
What’s next for the share price?
Greatland’s Haverion mine holds around 5.5m ounces of gold and close to 222,000 tonnes of copper but nothing has been mined yet. This could translate into earnings, increased investor sentiment, and the share price heading upwards. This is because both metals could be lucrative. For example, gold tends to perform well during times of economic volatility, like now. Copper is a vital component in electric components, and demand is set to soar due to electric vehicle demand increasing and other green initiatives.
It’s worth mentioning that Greatland only owns 30% of the Haverion mine. This may be a bad thing but 30% of potentially a lot is better than nothing. The good news is that it’s partnered up with Australian mining giant Newcrest. This can help from a cost and operations perspective.
The bad news is that Greatland hasn’t actually posted any revenues yet. I believe this is a big reason that the firm has seen its share price remain quite low. However, it has a couple of larger investors on board that own shares, such as Barclays and another Australian mining giant, Wyloo Mining. This is a sign of confidence in the business, in my opinion.
Greatland said that it should start seeing gold and copper produced from Haverion in Q3. I’m eagerly awaiting some news and will keep an eye on developments. This is one of the key events that could prompt the share price to begin climbing.
My verdict
At this stage, there are a lot of uncertainties and only potential for Greatland shares. However, operating in Australia is a positive. This is because of the jurisdiction which should mean there isn’t much objection from the government, and it can continue its operations largely undisturbed.
Personally, I don’t think the share price will explode any time soon. Positive production news could start a share price ascent. I’m always skeptical with mining businesses, especially smaller outfits. Mining is not an easy or cheap process. Operational issues could hamper Greatland.
I’m not planning on adding any Greatland shares to my holdings but I’m a keen observer and will keep up to date with the business and developments.
