Greatland Gold (LON: GGP) shares are down 6% this morning on the back of the release of the interim results. There’s not a large amount in these interims that isn’t already known. Greatland is known for making prompt announcements of significant events after all.
As with the Greatland Havieron release. As we’ll all recall that was when Newcrest seemed to be reporting different drilling and resource results from Greatland at that Havieron project. The difference being that Newcrest was using information with a cut-off date of a year back, Greatland was announcing what had happened since then.
It’s perhaps best therefore to consider the interims as a roundup of information that has been previously released. A laying out, in the one place, of things that we’ve – largely enough – already been told. The Greatland share price movement, as a result, can possibly be thought of as simply a yawn by the market. There’s little astonishingly new either bull or bear.
This leaves us with mulling over that older information plus thinking about the wider market and its impact. The Havieron deposit is of course the big price maker at Greatland. There are many other prospects the company is looking at but they’re further back in the development process. Havieron does look like it might be a very decent copper/gold deposit. But there’s a considerable way to go to confirm that.
This is just the way this stage of mining works. The job is to confirm what is thought might be true – a deposit of this size, that concentration, which will be mined in this manner, and so on. Each step forward is another brick of evidence to put into the wall of proof. It’s step-by-step stuff, that’s just the way it has to be done.
As to the larger market, yes, war has pushed the price of gold up. So too there’s some pressure upwards from the return of inflation. That is then pushed back by rising interest rates – gold doesn’t pay interest – so what the gold price will end up being is still debatable. It’s also a long way away from being an influence upon revenues at Greatland so it’s the gold price some years in the future that actually matters. This is also true of the associated copper price.
What the metals prices will be when mining starts and revenues are received is clearly and influence upon the Greatland Gold share price. But at this stage the real one is the probability that there’s a deposit there worth mining – will mining and revenue actually happen that is?
As there’s little new information in the Greatland interims about this probability – most of what we’re told we’ve already been told and is in the share price already – thus the likely cause of the muted share price response.
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Tim Worstall is a freelance writer specialising in economics and the financial markets.