Gold Bonanza at a Discount

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There is an awful lot of gold in Australia where Greatland Gold (LSE: GGP) own 100% of six exploration projects. After just  drilling four-holes, The Paterson Project in the Havierion and Black Hills region has reported ‘bonanza’ grades 120 metres down amazingly with peak grades at 4.5oz/t and 4.1% copper.  Greatland Gold is the only listed (AIM) company in this region of large gold and copper deposits.

© Image copyright randa

 

Its neighbours include billion-dollar companies such as Rio Tinto and Newcrest.  In 2017, Rio Tinto staked a huge area some 9000 sq km and are already rumoured have discovered gold and copper.  The region includes the legendary, Telfer Gold mine, discovered in 1972 and owned by Newcrest, which produces about 400,000 oz. of gold a year and still has resources of 8.2moz gold and 440,000t of copper.

 

The gold price seems stuck in a narrow range around $1,200 an oz and arguably has a better chance of going up than down.

 

In July, GGP’s raised £2.65m at 1.25p. This more than enough funds to chase this ‘potentially substantial’ gold discovery and already underway is a 10-hole diamond drilling programme. The strategy is to drill deeper at 600 metres around the first holes and then step-out following the geophysics. The forward modelling defined a primary body of 600m x 600m across with a depth extent from 400m to 900m below surface. Indicating a huge potential volume of 240m cubic metres with an adjacent smaller body of 16m cubic metres.

 

One drill roughly costs $150,000 per hole and this sequence  should at least result in an initial resource, which clearly adds value. The investor excitement is that the grades of the resource could show the potential for Havieron is to be a very large gold mine. That would clearly attract the attention of its wealthy neighbours.

 

There is other potential near-term and value-added news flow; Black Hills, new exploration will start after receiving approval for drill program and visible gold in outcropping and gold nuggets have been found in sands suggesting very high-grade mineralisation,  resembling  the upper portion of the Telfer Mine deposit.  Firepower is in Tasmania where a large gold target has been detected by a 3DIP program and further definition could be announced along with the finals.

 

Financials

The recent funding added to the £3.5m cash as of the end June 2018, should be sufficient to get to a resource, how big it is remains to be answered.

 

Trading Strategy

Buying at below the last funding price should give a shorter-term trading opportunity on what could become a bonanza mine. Speculative of course!

 

 

Greatland Gold (LSE: GGP)

1.15-1.9p

Mkt Cap: £38.2m

Next Results:  Finals to June [RNS End Oct]

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