Why is the Greatland Gold (GGP) share price up 10% today?

The Greatland Gold (LSE:GGP) share price was the star performer on Monday (10 February). Having risen steadily all through the day, by early afternoon, the firm’s inventory was 10% greater.

And it appears as if President Trump can declare a few of the credit score.

That’s as a result of gold costs hit a file excessive throughout the morning. The dear metallic was pushed greater on information that America’s Commander in Chief desires to impose a 25% tariff on metal and aluminium imports into the US.

Nonetheless, at this stage, it’s unclear whether or not Trump intends to tax exports of gold from Australia to America. That will be a significant blow to the firm, albeit one that may not final for lengthy. We’ve seen how Canada and Mexico have managed to barter momentary reprieves from threatened tariffs.

However some consultants imagine gold may climb to $3,000 an oz.. Throughout occasions of disaster, it’s seen by some buyers as a ‘secure haven’. Since the begin of the 12 months, it’s risen 10%.

A brand new period

However Greatland Gold solely began manufacturing on 4 December 2024.

That was the day on which it secured 100% possession of the Telfer and Havieron mining tasks in Australia. The latter’s nonetheless in its growth stage. Nonetheless, Telfer was acquired as a going concern.

Since assuming full management of those mines, the firm’s share price has risen 24%, from 7.5p to 9.34p. However this masks a very unstable interval for the inventory. On 20 December 2024, its shares have been altering arms for five.75p.

This stage of volatility isn’t uncommon for all these shares. I reckon mining is the most troublesome trade during which to function. There are quite a few monetary, operational, technical, and environmental dangers to which firms in the sector are uncovered. And this is usually mirrored in the topsy-turvy nature of their share costs.

A historical past lesson

Lengthy-standing shareholders in Greatland Gold shall be delighted that the firm’s now beginning to produce.

Subsequent 12 months will see its tenth anniversary as a listed firm. And its journey is illustration of the main downside confronted by early-stage mining shares. Particularly, the must hold elevating cash.

It floated, in July 2006, with 100,550,000 shares in challenge. In the present day, following quite a few fund-raising rounds, it has 13,079,294,602 shares in circulation. A 5% holding at IPO would now be equal to 0.038%, assuming no additional money was invested.

Nonetheless, with entry to a $470m debt facility, the firm ought to now have the ability to fund the commercialisation of Havieron — its so-called ‘flagship gold-copper mission’ — with out having to ask shareholders for extra money. And money flows from Telfer also needs to assist.

Nice potential?

Havieron is estimated to comprise 8.4Moz (million ounces) of gold equal. At a present price of $2,981 (£2,404), this has a retail worth of over £20bn. After all, this doesn’t take note of the price of getting the metals to the floor.

Endeavour Mining Company, the African gold producer, has an all-in sustaining price of $1,140 (£919) an oz.. This isn’t a like-for-like comparability nevertheless it offers some concept of the doubtless prices concerned.

Assuming all goes to plan, the ache of the varied rights points must be a factor of the previous. Now, with a market cap of £1.2bn, Greatland Gold might be a superb progress inventory for buyers to think about.