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Greatland Gold Shares Need News To Move – But Which Way?

Tim Worstall
Tim Worstall trader
Updated 21 Jan 2022

Key points:

  • Greatland Gold’s share price now seems reasonably static
  • We require new information from the company to produce significant movement in Greatland’s share price
  • But which way will this move be on what news?
  • Greatland Gold Stock Forecast

Greatland Gold PLC (LON: GGP) shares have been trading around the 15 pence mark for a couple of months now. Greatland is down some 5 % this morning to 14.35 and looks to be recovering a bit. Given the 0.9 pence spread on the Greatland share price (about 6%) movements of this sort of size aren’t really things that can be traded in and out of profitably.

For a position aimed, either way, we desire larger share price movements than this at Greatland that is. That probably requires new news about the prospects for the company.

Greatland is far enough away from any sort of production that no change in external factors like the gold price is going to make any difference. Well, not unless we see really significant price movements like those of the 1970s and 80s. Equally, Greatland is exploring in stable political climates so we’ve not any excessive amount of political risk to worry about.

Also Read: The Best Gold Stocks To Buy

So, the sort of news that is likely to move the Greatland share price is going to have to come from inside the company itself. Updates on prospecting results are the most likely for that’s the stage the company is at, checking mineralisations and beginning to work out whether there’s enough material of the right concentrations to be actually worth mining.

Perhaps the reason that we’re not seeing significant price movements at Greatland is that we’ve recently had just that news. Greatland Gold moved up 23% on the back of the news from the Juri JV with Newmont. On the other hand, Greatland didn’t move all that much off the back of the news about the Havieron drilling results. Perhaps because those results were indeterminate themselves – neither proving that it’s a goer nor writing it off.

Which leaves us just with that old truism. That markets are efficient at processing information about what prices should be in a market. The implication of this is that what is already known – the results from Greatland at Juri and Havieron – is already baked into that share price. It’s possible, as above, for external news to alter the valuation but it would have to be a massive global gold price change to make much difference. Or of course, market opinion could change about that news that we already know. But opinions of junior miners going for gold tend to be reasonably static – the market’s been evaluating gold miners for well over a century and knows how to do it pretty well.

So, it’s more information from within Greatland which is likely required before we see a breakout in the share price either way. There’s no particular news scheduled, no certain set of results we’re awaiting. We’re going to have to just wait and see that is.

Tim Worstall
Tim Worstall is a freelance writer specialising in economics and the financial markets.