Greatland Gold shares could slip to 5.8p if this happens

By:
on Feb 16, 2023
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  • Greatland Gold stock price has plunged by 80% from its all-time high.
  • The company’s losses rose sharply in 2022 as exploration continued.
  • A drop below the YTD low of 7.31p could point to further weakness.

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Greatland Gold (LON: GGP) share price continued retreating as the company’s losses mount. The stock retreated to a low of 8p, which is close to the important support at 7.30p. It has crashed by over 80% from its highest point in 2021, giving it a market cap of over £400 million.

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Greatland losses are rising

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Greatland Gold is an exploration company with assets in Australia. It mainly focuses on industrial metals like copper and precious metals like gold. The firm’s key assets are in the Havieron region, where it has a joint venture with Newcrest. 

This is important because Newmont, the giant mining company, proposed to acquire Newcrest in a $17 billion deal. Newcrest rejected the offer but left doors open for further talks.

Greatland Gold hopes to start production soon. Therefore, at this stage, the company is not yet making any money. Its recent annual financial results showed that its exploration and evaluation expenses dropped to £3 million in 2022 from the previous year.

Administration costs rose to £5.4 million, leading to an operating loss of over £8.4 million. Its total loss more than doubled from £5.5 million in 2021 to £11.3 million.

Meanwhile, Greatland continued its exploration work at Juri, where it is also working with Newcrest. In a statement, the company said:

“The importance of bismuth as a pathfinder in the Paterson region is particularly significant with geochemistry at Black Hills similar to what we have seen at Havieron. The 2022 results further enhance our understanding of the geology of the Juri Joint Venture ground and confirm the merits of follow-up work.”

Therefore, from a fundamental perspective, Greatland seems like a good investment because of the potential of its Australian assets and its relationship with Newcrest.

Greatland Gold share price analysis

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Greatland Gold stock price
Greatland Gold stock price

On the daily chart, we see that the Greatland Gold stock price has been in a strong bearish trend for months. This decline saw the stock plunge t a low of 7.310p, where it struggled to move below since September last year. Its attempt to recover found substantial resistance at 9.23p this month. The stock remains below all moving averages.

Therefore, Greatland bulls need to watch the support at 7.310p closely. A move below that support will signal that bears have prevailed. If this happens, the next key support level to watch will be at 5.85p, the highest point in February 2020.

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