Greatland Gold (LON: GGP) shares are up 5% on Thursday morning on the announcement of drilling results from Rudall. It should be said that those results are good - 22g per tonne Au is a good result - but they're highly preliminary and the result of only the one drill hole. Perhaps the best that can really be said of them is that they're indicative of how there might be something more interesting down there but not really much more than that. As Greatland says: “The single drill hole testing the Ramses target”. OK, so the results are good so far but they are still highly preliminary.
The larger picture here is that Greatland has that Havieron find (in association with Newcrest). There's some thought that the same, or a similar, mineralisation is here at this Rudall site, some 20km away. Assuming that the geology is similar then all of the benefits of Havieron - transport links etc - then also come into play. So we would not have some orphan deposit that could not be exploited - assuming that there is a deposit there of interest of course.
Greatland Gold share price from London Stock Exchange
However, there is also the other issue that has dogged Greatland for some time now. We do keep gaining these reports of interesting geology, or advances in Havieron and so on. And we'd all think that at a time of rising gold prices - up 20% over recent months, what with inflation etc - that this should all be reflected in the GGP share price. Which, from the above chart, we can see that it isn't. As to why, well, that's difficult.
An objective view might well conclude that Greatland should be more highly valued than it is. But then this also does happen with junior (ie, non-producing as yet) miners, that the share price just doesn't move on those seemingly objective factors. As also, it must be said, we sometimes see mining shares move on hope and dreams rather than objective matters.
We tend to think this is where Greatland is. The share is often heavily traded but just sentiment seems to weigh heavily upon that price. Quite what will shock it out of this problem we're not sure.