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Numis boosts Greatland Gold target price by 50% following recent well-received drilling update

Numis hiked its target price to 6p from 4p, with the shares currently trading at 3.42p, up 7% on Friday’s close

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Numis Securities gave a boost to Greatland Gold PLC (LON:GGP) shares on Monday, upping its target price for the Australian-focused gold explorer by 50% following a recent well-received drilling update.

Numis’s analysts reiterated a ‘buy’ rating on Greatland and hiked their target price to 6p from 4p, with the shares currently trading at 3.42p, up 7% on Friday’s close.

READ: Greatland Gold hails “outstanding drill results” from Havieron project

In a note to clients, the analysts pointed out that Greatland recently released further results from the NCM-funded programme at the company’s Havieron project in Western Australia, which showed that mineralisation now exhibits continuity over 450 metres (m) of strike with 150m of width and 600m of vertical extent.

The analysts noted that six rigs are currently operational at the site with 20,000m to 30,000m of additional drilling planned for the next two quarters to support the publication of a maiden resource by the end of calendar year 2020.

They also pointed out that NCM is committed to spend US$65mln to complete a feasibility study at Havieron, and has been spending at a rate significantly in excess of the minimums set out in the farm-in agreement.

Expectation of a larger reserve

The analysts said the key drivers behind its target price hike were an increase in the average in situ value for the Aussie golds, and their expectation of a larger reserve at the project of 5.5mln ounces against 4mln ounces previously.

They added: “Whilst the shares have performed strongly, we believe that this is just the market beginning to catch up with the very positive drill results generated over the past 12 months. In our view, these results, and NCM’s level of ongoing commitment, are indicative of a project that is going to get developed, with ore being trucked to NCM’s 22Mtpa plant at Telfer.”

The analysts concluded: “We retain the view that GGP is one of the most exciting exploration projects globally at this point and note that, beyond Havieron, little value or attention has been paid to the company’s broader land holdings across the Paterson district that remain essentially untested.”

Quick facts: Greatland Gold PLC

Price: 12.5 GBX

AIM:GGP
Market: AIM
Market Cap: £471.78 m
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