The GGP share price is rising: here’s what I’m doing

The GGP share price has been on the up over the past few weeks. Considering the firm’s long-term potential, I’ve been taking a closer look. 

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The GGP (LSE: GGP) share price has been on the up over the past few weeks. Shares in Greatland Gold have jumped by nearly a third since the beginning of November. 

Following this performance, some investors, including this author, might be tempted to buy into the stock ahead of further growth. 

Considering the firm’s long term potential, I’m starting to think that could be a great idea. 

GGP share price performance 

In its latest results release, the company laid out its successes over the past 12 months. In what was a transformational year for the group, Greatland and its partner Newcrest drilled some 100,000 metres at the Havieron gold-copper prospect, which has quickly become GGP’s flagship asset. 

So far, drilling results have been nothing short of exceptional. The company is planning to start the next stage of the mine’s development at some point in the next six months.

The GGP share price has edged slowly higher following the trickle of positive results from the prospect over the past year. 

However, as is the case with many early-stage mining projects, the market was sceptical that Greatland would have the skills and financial resources to push Havieron to the revenue stage. 

That all changed at the end of November. On the last day of the month, Greatland announced that it had signed a new series of agreements with Newcrest

New agreements 

These agreements sealed a formal framework between the two parties for work beyond the existing Farm-in Agreement. The agreements put in place a structure to progress the prospect to the new stage.

They facilitate the expansion of exploration activities at Havieron and the acceleration of early works, including the construction of a box-cut and decline. Greatland has also secured $50m of funding for the project.

Together with Newcrest’s existing sole funding commitments under the Farm-in Agreement, management believes this capital will be enough to fund GGP’s share of joint-venture costs up to the Feasibility Study.

The next stage 

I believe these new agreements are hugely positive for the GGP share price. Indeed, they remove some of the uncertainty that’s shrouded the business since the beginning. 

The company is edging closer to production. What’s more, the continual stream of positive results from the prospect increases the chances of a possible takeover. I’m not saying a takeover is guaranteed, but it’s one avenue Newcrest might want to explore, although I’m sure it’ll want a good deal. 

As such, I’m going to be paying close attention to the GGP share price from now on. As it’s still at what I would call the pre-revenue stage, I’m not willing to invest in the business just yet. I like to buy companies that have a proven and profitable business model.

Nevertheless, my view on the business is likely to change as it progresses towards production. That’s why I’m going to be watching it closely and waiting for a potential opportunity. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

After it crashed 25%, should I buy this former stock market darling in my Stocks and Shares ISA?

Harvey Jones has a big hole in his Stocks and Shares ISA that he is keen to fill. Should he…

Read more »

happy senior couple using a laptop in their living room to look at their financial budgets
Investing Articles

How’s the dividend forecast looking for Legal & General shares in 2025 and beyond?

As a shareholder, I like to keep track of the potential dividend returns I could make from my Legal &…

Read more »

artificial intelligence investing algorithms
Investing Articles

Could buying this stock with a $7bn market cap be like investing in Nvidia in 2010?

Where might the next Nvidia-type stock be lurking in today's market? Our writer takes a look at one candidate with…

Read more »

Investing Articles

Is GSK a bargain now the share price is near 1,333p?

Biopharma company GSK looks like a decent stock to consider for the long term, so is today's lower share price…

Read more »

Snowing on Jubilee Gardens in London at dusk
Investing Articles

Could December be a great month to buy UK shares?

Christopher Ruane sees some possible reasons to look for shares to buy in December -- but he'll be using the…

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

Sticking to FTSE shares, I’d still aim for a £1,000 monthly passive income like this!

By investing in blue-chip FTSE shares with proven business models, our writer hopes he can build sizeable passive income streams…

Read more »

Growth Shares

BT shares? I think there are much better UK stocks for the long term

Over the long term, many UK stocks have performed much better than BT. Here’s a look at two companies that…

Read more »

British Pennies on a Pound Note
Investing Articles

After a 540% rise, could this penny share keep going?

This penny share has seen mixed fortunes in recent years. Our writer looks ahead to some potentially exciting developments in…

Read more »