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I noticed that the Gold of the Great Lands (LSE: GGP) share price has remained fairly stagnant for some time now. Let’s dig a little deeper to help understand what the next step could be for the company.
Greatland is a precious metals exploration company. Its operations are based in Australia and its flagship mine is the Haverion deposit, which contains gold and copper.
As I write, Greatland shares are trading at 6p. They have remained near this level for several months. In a 12-month period, they are down 25%, which seems like a lot. However, when stocks are trading at such low levels, even a small superficial drop can seem like a lot. For context, this time last year the shares were trading at 8p.
What’s next for the share price?
Greatland’s Haverion mine contains around 5.5 million ounces of gold and around 222,000 tonnes of copper, but nothing has been mined yet. This could translate into profits, higher investor sentiment, and an increase in the stock price. This is because both metals could prove lucrative. For example, gold tends to perform well in times of economic volatility, such as now. Copper is a vital component in electrical components and demand will increase due to increased demand for electric vehicles and other green initiatives.
It is worth mentioning that Greatland only owns 30% of the Haverion mine. This may be bad, but 30% of potentially a lot is better than nothing. The good news is that it has partnered with the Australian mining giant. Newcrest. This can help from a cost and operations perspective.
The bad news is that Greatland has yet to record any revenue. I think this is one of the main reasons why the company’s share price has remained quite low. However, it has a couple of larger investors on board who own shares, such as Barclays and another Australian mining giant, Wyloo Mining. In my opinion, this is a sign of confidence in the business.
Greatland said it should begin producing gold and copper at Haverion in the third quarter. I am eagerly awaiting any news and will keep an eye on developments. This is one of the key events that could prompt the stock price to start rising.
my verdict
At this stage, there are many uncertainties and only potential for Greatland shares. However, operating in Australia is positive. This is due to jurisdiction, which should mean that there are not many objections from the government and that it can continue operations largely uninterrupted.
Personally, I don’t think the share price will skyrocket anytime soon. Positive production news could start a stock price rally. I am always skeptical of mining companies, especially the smaller ones. Mining is not an easy or cheap process. Operational problems could hamper Greatland.
I don’t plan to add Greatland shares to my holdings, but I am a close observer and will stay informed on the business and developments.
