Greatland Gold, GGP, Flatlines On Scallywag – What Will Move It?

Greatland Gold (LON: GGP) shares haven’t really moved since the company announced the results of the drilling programme at Scallywag. A useful understanding of why they’ve not moved being that the results weren’t, in fact, all that good.

A useful background to Greatland Gold is here. It’s an often volatile stock that can be traded purely on technical analysis and so on. It’s also possible to take a more fundamental view of the company’s prospects. There are highly interesting prospects, for example, Greatland’s Havieron.

Trading on that technical analysis, trying to time movements in the swings and roundabouts of the share price can be done. The bid/offer at pixel time is 13.10 to 13.50 pence, that means a 0.40 pence spread. That’s a 3% spread so a Grealtand share price movement of more than 3% can, assuming that the position is working the right way, be profitable. The Greatland price has, over days and weeks, historically been that volatile, so it is possible.

Also Read: The Pros And Cons Of Trading Gold

The other way to look at it is in that fundamental manner. This requires understanding how junior miners work. Firstly, it’s necessary to decide what to go look for – here it’s gold. Then it’s necessary to gain a licence to go looking in a particular place – Greatland has achieved that. Then there’s the long process of truly exploring the area. This means checking the base geology for mineralisation. Then showing the concentration of gold in the ore, the next stage being to show the volume of such ore.

Each part of this process is one more brick in the wall of evidence that leads to the decision to actually mine. The conclusion desired is that there’s a profit to be made by mining this particular and specific deposit.

Those bricks at Havieron, for example, seem to be indicating – so far at least – that the game is on. Which brings us to the results from Scallywag. At this stage, they’re too early to be able to give a proper result or decision. This is why the announcement is simply that enough has been found to make the next stage of exploration worthwhile.

In more technical detail, mineralisation has been found. That means that there is gold containing geology there. So, it’s worth looking in more detail to see how the geological system really works. But that is also all that has been found so far. These results, “2.6m @ 0.19g/t Au from 35.4m AND 3m @ 0.19g/t Au” are not going to make anyone decide, right now, to build a mine. In fact, they’re good evidence not to build one as they stand right there.

The results at Scallywag are, as Greatland says, evidence of mineralisation but no more than that. So, more drilling needs to be done to explore the extent and richness of the mineralisation. Thus the paucity of movement in the Greatland share price as a result of the announcement.