Why the price of Greatland Gold (GGP) shares has increased 10% today?

He Great of Greatland (LSE: GGP) The price of the shares was the star artist on Monday (February 10). Having constantly increased throughout the day, early in the afternoon, the company's shares were 10% higher.

And it seems that President Trump can claim part of the credit.

That is because gold prices reached a record to the maximum during the morning. The precious metal was pushed higher in the news that the commander in chief of the United States wants to impose a 25% rate on the imports of steel and aluminum to the United States.

However, at this stage, it is not clear if Trump intends to tax Australian gold exports to the United States. That would be a great blow to the company, although it might not last long. We have seen how Canada and Mexico have managed to negotiate temporary reimbursements of threatened tariffs.

But some experts believe that gold could rise to $ 3,000 per ounce. In times of crisis, some investors consider it a “safe shelter.” Since the beginning of the year, 10%has increased.

A new era

But Greatland Gold only began production on December 4, 2024.

That was the day he obtained 100% owned by Telfer's mining projects and had in Australia. The latter is still in its development stage. However, Telfer was acquired as a company underway.

Since he assumed the total control of these mines, the price of the company's shares has increased 24%, from 7.5PA 9.34p. But this masks a particularly volatile period for stock. On December 20, 2024, their actions were changing hands by 5.75p.

This level of volatility is not unusual for this type of actions. I think mining is the most difficult industry to operate. There are numerous financial, operational, technical and environmental risks to which companies in the sector are exposed. And this is often reflected in the revolt nature of the prices of their actions.

A history lesson

Long data shareholders in Greatland Gold will be delighted that the company is now beginning to produce.

Next year you will see its tenth anniversary as a quoted company. And his trip is a good illustration of the main problem that faces the mining stocks at an early stage. Namely, the need to continue raising money.

It floated, in July 2006, with 100,550,000 issues in broadcast. Today, after numerous fund collection rounds, it has 13,079,294,602 actions in circulation. A 5% participation in the OPI would now be equivalent to 0.038%, assuming that it would not be invested more effective.

However, with access to a debt installation of $ 470 million, the company should now be able to finance the commercialization of Haan, its so-called Gold-Copper Badge Project, without having to ask shareholders for more money. And Telfer cash flows should also help.

Great potential?

It is estimated that they have contains 8.4moz (millions of ounces) of equivalent gold. At a current price of $ 2,981 (£ 2,404), this has a retail value of more than 20 billion. Of course, this does not take into account the cost of bringing metals to the surface.

Effort mining CorporationThe African gold producer has a maintenance cost of $ 1,140 (£ 919) per ounce. This is not a similar comparison, but gives an idea of ​​the possible costs involved.

Assuming that everything goes as planned, the pain of the various rights problems should be a thing of the past. Now, with a market capitalization of £ 1.2 billion, Greatland Gold could be an excellent growth action for investors to consider.