Narratives are currently in beta

Key Assumptions:

Havieron Production:
- Annual Production: 450,000 oz/year.
- AISC: $1,150/oz.
- Revenue per oz at $4,000 gold: $4,000 - $1,150 = $2,850 margin/oz.
- Free Cash Flow (FCF): 450,000 x $2,850 = $1,282.5 million/year.
Debt and Capex:
- Capex: $600M (already accounted for).
- Estimated Debt: $400M (to be repaid over time).
Share Count:
- Fully diluted shares: 5 billion.
Valuation Multiple:
- Apply a 7x FCF multiple for a mid-tier growth company.

Step 1: Market Cap Valuation

Market Cap = Annual FCF x Valuation Multiple: Market Cap = $1,282.5M x 7 = $8.978 billion.

Step 2: Stock Price Calculation

Stock Price = Market Cap ÷ Shares Outstanding: Stock Price = $8.978B ÷ 5B shares = $1.80/share.

Upside Potential:

At $4,000 gold, Greatland Gold’s stock price could rise to approximately $1.80 per share.
If additional resources are proven at Havieron or any of their other properties (e.g., Rudall, Scallyway), the valuation could increase significantly.

Key Risks:

Dilution: Additional share issuance to fund development could lower the per-share valuation.
Debt Servicing: Early cash flows will likely be directed to pay down debt.
Exploration Uncertainty: Success at other exploration properties is not guaranteed.

Conclusion:

If gold reaches $4,000/oz, and assuming Greatland Gold successfully develops Havieron, its stock could potentially trade at $1.80 per share. This estimate assumes no additional resource growth at Havieron or success from their extensive exploration portfolio, which could provide further upside.

How well do narratives help inform your perspective?

Disclaimer

The user RockeTeller holds no position in AIM:GGP. Simply Wall St has no position in any of the companies mentioned. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If gold reaches $4,000/oz