Greatland Gold plc (GGP)

I guess my question was not very clear.

What I meant was, do you have a price that you consider to be ā€œfair valueā€ based on an assumed amount of gold that you are expecting them to encounter?

I am asking because without doing calculations, unless you have good knowledge of mining (which you might do) and you can just pinpoint what it roughly should be worth, I donā€™t see how it would be possible to have a price target.

In my case, I donā€™t have much idea, so at the time I looked at potential numbers (which is guesswork/speculative in itself) made some assumptions to come up with potential target share price ranges. I was aiming to do this again this weekend now that we have more information but I just didnā€™t find the time. I found a video from Theinvestmentjorney quite useful to compare and see what a possible AISC could be.

I always have a giggle at simplywall.st and see what it has

Worth clicking on view data to see the cash flow guess work

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Iā€™m definitely a newbie when it comes to a mining stock (ā€¦stocks in general really, 10 months I think now) and Iā€™ve tried to pick up as much as I can. Trying to learn all the time. Every day in fact.

Would it be fair to say that I read a lot rather than look into calculations? I have the passion to learn but unfortunately calculations are not my forte. Although I do try. I have no idea if thatā€™s a good thing or a bad thing in the stock market? Iā€™m not doing horrendously at the moment (maybe my method works for me alone)
Although Iā€™m quite cautious an investor overall.

General census after all my reading still makes me feel the SP has taken a bit of an unfair hit.

Perhaps itā€™s a better way to justify my own shares?

If you do find anything useful - would you possibly mind sharing it?

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I am not an expert by any means, I have not been investing in miners for very long (around a year also) but I like to have a price target, so here is my quick attempt at back of the envelope calculations.

My back of the envelope calculations (very rough):

Mineral Resource: 4.2M (including the suggested equivalent amount of copper - see sources at the bottom of the page)
Gold price: 1800 USD per Ounce
AISC: A video calculation mentioned average underground costs of Telfer (infrastructure potentially to be used) as around 1150 USD over the last 5 year window. Note that current Telfer AISC is reported to be over 1500 USD (value assumed to be USD not AUD, as stated at start of article). Lets take it to be 1200 USD per ounce based on video. Possible big assumption.
Number of shares early January: 3.88 billion.
Initial capital costs: Assumed to be 100m USD, but I donā€™t know. I seem to remember reading something about it but I cannot find the source. There is information on the Newcrest loan.
Proportion owned: 25% or 0.25 (could assume 0.3 as 0.05 is to be acquired at fair value, if Newcrest wants)
GBP to USD conversion: 1.39 (16/02/20)

Calculation: ((1800-1200) x 4.2M equivalent ounce) -100M) / (3.88B shares x 1.39 USD per GBP)) x 0.25 = 0.11 GBP or 11p
Assuming double the MRE we would have 22p which is roughly where it is at currently, considering that the December MRE did not include the whole site and only potentially what in a plan view (map) seems to be about half-ish. Another big assumption.

Someone who I think is more experienced than me with miners recently mentioned to be aware of tonnage (MRE) and grade, but I donā€™t know how to include the grade in the tonnage. Maybe by reducing the AISC even more?

Other assumptions:

  • I donā€™t know how long it could take to mine it. To overcome this I am assuming that the time taken to mine it equals the Price to Earnings Ratio of the producing mine.
  • Only Havieron is considered, not the additional explorations such as Scallywag.
  • All in todaysā€™ value of money. Assumes that the price of gold will rise with inflation. No opportunity cost assumed.

Summary:

  • Considering the other sites, I think the stock still has some up side, hence why I am not selling. I may even consider buying, aiming for 30p. I do think that estimates for 1 GBP are realistic, at least not short term. If they find a similar resource in Scallywag then definitely! ļŠ

Outstanding considerations

  • Construction timeline
  • Additional sites such as Scallywag

Other sources:
MRE:
https://greatlandgold.com/havieron-jv/
https://www.londonstockexchange.com/news-article/GGP/initial-mineral-resource-estimate-for-havieron/14787380

Newcrest can earn up to 75%:

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If anyone wants to share their thoughts or calculations, feel free :smiley: .

Edit:
Two very interesting videos from TheInvestmentJourney. I believe that they have been shared on here previously.

One is the updated calculation/thesis of the other.
He uses Trading212 as well as on FreeTrade. I donā€™t know whether he is on this community forum though.

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I still definitely feel like a total novice in comparison!

Thatā€™s great thank you so much for sharing all this :slightly_smiling_face: I need to sit and read and re-read.

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Clarification.
This is a typo, I meant:
"I may even consider buying, aiming for 30p. I do NOT think that estimates for 1 GBP are realistic, at least not short term. If they find a similar resource in Scallywag then definitely! "

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Transition complete :heavy_check_mark:

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3 tweets in a day! He means business! Looking forward to following on this journey.

Exciting.

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30.1p :dart:

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The long game :speaking_head:

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Seen this on another site.

Newcrest update from today:

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Wishing I took that 24p BID the other dayā€¦ :upside_down_face:

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This one is looking for low teens it seems . :face_with_raised_eyebrow:

Looking painful for anyone who entered after Sep 2020. Would never have expected 50% off in the last few months.

Luckily Iā€™m at 23p and only a small position. Still Iā€™d rather be a few hundred up than down right now.

I think itā€™s intentionally being brought down at this point as it doesnā€™t seem to correlate to news on the business.

I should have taken that 24p bidšŸ¤¦ā€ā™‚ļø

What price do you think it might stabilise at?
Looking at increasing the position.

The broker views on this stock are only about 33p, although not a lot of coverage tbh. I can see this falling still, but Gold is not my area.

If it reaches 12p, Iā€™ll reenter.

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Jeezo! Yeah if 12p presentes itself again I could be tempted.

Everyone and their dog would be buying if it went to 12p :joy:

I think 18.5p is bang on the rolling year and was the bottom. Famous last words.

Another 7p from where we are no chance.

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