Greatland Gold (LON: GGP) shares have fallen a couple of percent since it just announced its sustainability report. If these Environmental, Social and Governance matters (ESG) were as important as some say it is then this isn’t what we would expect. But as ever it’s always the reality of market prices which trumps what anyone might think about things.
The announcement itself shows that Greatland is meeting all of the currently fashionable buzzwords. The full report. It’s possible to go into all of the detail but isn’t really necessary. They’re reducing water runoff by using evaporation ponds, that sort of thing. Just what is today considered good mining technique. Much of the rest of it is that we listen to our workforce and all that. Where this isn’t just good management technique there’s not that much more to add. For a miner in the sort of location Greatland is there isn’t all that much more to ESG than simply good technique and decent management.
For people operating in poor jurisdictions it’s different, but in Australia? Most of what is ESG is already encoded in law anyway.
As we’ve said before the Greatland share price is going to be determined by how well the Havieron site turns out. There’s definitely gold there, that’s not the problem. It’s exactly how much is there and what’s the price to get it out that matters. More ore and richer ore is better, which is exactly what the current drilling programme is trying to define.
As to why the ESG announcement didn’t make much difference. It’s only possible to speculate of course but here goes. ESG is rather a concern of the large investment funds rather than the individual investor or trader. It’s, if we like to put it this way, an elite concern. The shareholder register at Greatland has some institutions on it, sure, but the swing buyer and or seller is the individual investor still. So, a report that details issues of not that much interest to the individual investor isn’t going to move the Greatland share price given that it’s the individuals which move that price.
This could change. If Havieron turns out to be a Tier 1 or the like resource then it probably will change too. The institutions tend to come in when such mining adventures are de-risked – and that’s the point at which ESG will become important for the Greatland valuation.
At this stage of the game ESG doesn’t matter much for Greatland. But depending upon the Havieron results and the possible institutional interest it could well become so. It is, if we like, an extra leverage on those Havieron exploration results.
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Tim Worstall is a freelance writer specialising in economics and the financial markets.