£10,000 invested in Greatland Gold shares 1 year ago is now worth
Greatland Gold (LSE:GGP) shares are consistently among the most traded in the UK. And that got me interested because it’s not even on the FTSE 100. So, what on earth is going on?
Well, part of the reason has to do with soaring gold prices. This surge has reignited interest in gold miners, and Greatland Gold is one that has stood out to investors. The UK-based miner, once a speculative explorer, has pivoted to production after acquiring the Telfer gold-copper mine and a 70% stake in the Havieron project in Western Australia.
The stock is now up 21.5% over the past 12 months, meaning a £10,000 investment made then would now be worth £12,500. Unfortunately, there’s no dividends to add to that. Nonetheless, this rise, coupled with its huge trading volume, suggesting it’s a stock requiring further attention.
A strategic shift
Greatland’s December 2024 acquisition of Telfer and Havieron marked a watershed momentum. Telfer, an operational mine with 11.5m tonnes of run-of-mine ore stockpiles, immediately positions Greatland as a mid-tier producer, generating near-term cash flow to fund Havieron’s development.
The latter is a world-class deposit with 8.4m ounces of gold equivalent and projected all-in sustaining costs (AISC) of $818/oz — among the lowest globally. By integrating Telfer’s infrastructure, Greatland aims to de-risk Havieron’s development while extending Telfer’s mine life through exploration.
This dual-asset strategy has created some cautious optimism among investors and analysts. Analysts note that Telfer’s existing operations could deliver 426,000 gold-equivalent ounces over 15 months, funding Havieron without further equity dilution — a relief for shareholders after several capital raises.
Cheap for a reason
Greatland’s stock valuation reflect its transition. The stock trades at 23.4 times 2025 earnings — reasonable for a growth-focused miner — with a price-to-book ratio of 2.87 times, below sector averages. Analysts’ average price target of 14.33p implies 66% potential from current levels (approximately 8.6p), though targets vary widely (7p to 19p).
However, risks loom. While a debt facility and Telfer’s cash flow mitigate near-term liquidity risks, Havieron’s capital intensity leaves little margin for error. Berenberg highlights “technical execution risks” at Havieron, and maintains a Hold rating despite gold’s rally.
However, Greatland stock is somewhat disconnected from gold’s rally, and that stems from its operational overhang. Unlike pure producers benefiting immediately from higher prices, Greatland’s value hinges on delivering Havieron by 2026 and getting it operational in 2027. Delays or cost overruns could pressure its balance sheet, especially if gold retreats from record highs.
Nonetheless, the math is compelling. At steady-state production, Havieron could generate 258,000 gold-equivalent ounces annually for 20 years, while the company is exploring ways to extend the Telfer mine. Combined, these assets could position Greatland as a top-10 global gold producer by decade’s end.
High risk, high reward
Greatland’s success hinges on flawless execution. For risk-tolerant investors, the stock’s discount to net asset value (NAV) and sector peers presents a compelling bet on gold’s momentum and management’s delivery. Conversely, conservative investors may prefer established miners with less risk attached. Personally, I’ll keep watching from the sidelines. Clearly there’s a lot of potential, but it’s not my usual investment.
The post £10,000 invested in Greatland Gold shares 1 year ago is now worth appeared first on The Motley Fool UK.
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James Fox has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
