Article from today20 Apr 2020 22:47
Greatland Gold: another AIM success story up 330%
by Lee Wild from interactive investor | 20th April 2020 13:16
After great success in Australia and a mining giant buying a stake, takeover rumour is rife.
When stock markets are volatile, as they are now, the opportunity to generate spectacular returns is increased, as is the risk of suffering large losses. But while we’ve seen wild share price swings among normally steady blue-chip stocks over the past few months, it is the AIM market where some of the potential life-changing activity has taken place.
On 31 December last year, 57 AIM companies were double the value they had been 12 months earlier. Many more had doubled at some point during the year before easing back. So far in 2020, 19 companies are currently twice the price they began the year. Since the AIM All Share index hit its low on 19 March, 37 shares are currently double the price.
That’s an amazing return, but it gets better. Ten companies are up by well over 200%, among them the true star stocks that have changed lives.
But there has also been an incredible wave of interest in a business that digs holes in the ground for a living. And it’s a company we caught up with in September 2018 when the shares were trading at little more than a penny. They traded as high as 7.82p today, taking the capital gain since our chat to 638% and 320% in 2020 to date.
That company is gold miner Greatland Gold (LSE:GGP), which had already struck gold in Australia when we spoke to chief executive and former Merrill Lynch fund manager Gervaise Heddle.
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Newsflow since has been significant, and speculation by one of its major shareholders that the company will be taken over has just caused another spike in Greatland’s share price.
Primorus Investments, a strategic investment company, began building a stake in Greatland during late 2018. Its website says it spent £633,000 buying 37 million shares at a weighted average price of 1.71p per share.
In its latest quarterly update, published earlier than usual due to the coronavirus pandemic, the company reports “further spectacular drill results” from Greatland’s Havieron gold/copper project in the Paterson Province region of Western Australia.
We had also heard from Greatland on 1 April that Newcrest Mining (ASX:NCM) had completed Stage two of the farm-in agreement at Havieron (now Greatland 60%, Newcrest 40%). The move immediately to Stage 3 had now taken place “many years in advance of what is contractually required,” notes Primorus, adding, “We believe this speaks volume about the size and potential of Havieron and the surrounding region.” Newcrest has owned the nearby Telfer mine, which has produced millions of ounces of gold, but is nearing the end of its mine life.
Primorus has made a significant return on its initial investment, but it is not selling yet. Why?
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