Greatland Gold

The Incredibly Deadly Viper

Good Morning Team.

At the start of the year, I picked three ‘junior’ resource stocks as the best plays for 2025 - not only for their assets and management, but also for their strong financial backing in this weaker economic environment.

Sovereign Metals is up 24.4% year-to-date as investors prepare for the inevitable Rio Tinto bid at some point during H2 2025. Amaroq is down 10% having lost its gains - I’m not worried here, it’ll perk right back up as production, exploration and reserves ramp up.

Greatland Gold is now up around 70% (though is now going to be super volatile).

The moonshot - Emmerson - has now nearly tripled in value. The other picks are all over the place but broadly flat as a grouping - I’ll review at month end to see what progress has been made.

But overall, it’s looking gravy.

I have no intention of selling SVML until the big payday, nor AMRQ as the money only really starts to roll in towards the end of the year.

But with Greatland, it’s getting increasingly difficult not to look at that ‘sell’ button. Cash out now and it pretty much guarantees that my request to judge me on the performance of these three by the end of 2025 will end in my favour.

Fortunately though, Mama didn’t raise no bitch.

While the charts (and several chartists) all indicate that #GGP will hit the 11-12p level and then correct significantly, they are all missing something absolutely key.

The ASX listing.

I’ll let you all in on a little secret. AIM investors are pretty much all here for a quick gain, which is the natural result of a long bear market. ASX investors want those sweet, sweet franking credits - simply because of how much better the incentives for long-term investing down under really are.

On an ASX peer comparison basis, Greatland is still very much undervalued. Today’s update of 154Mt at 0.64g/t Au and 0.08% Cu for 3.2Moz Au and 117kt Cu puts the company in the big leagues.

It’s in the top five for resource.

Just do 3.2 million ounces x $3,000.

Billions and billions of dollars.

Others on the ASX with smaller resources have significantly larger market capitalisations.

GGP’s Telfer and Havieron is roughly equal to Hemi (De Grey), which according to Northern Star is worth US$3.3 billion. Oh and Greatland has a processing plant - the third highest capacity in the country and the only one in the Paterson. (Yes there are many important differences, but the valuation disconnect remains large).

Hang on - who was the former CFO at Northern Star and brought his best mates to Greatland’s management for the ride?

I digress.

Only 55% of this resource is in measured and indicated categories, so you can get larger reserve conversions soon enough. As I have previously noted, all the large AUS gold mines live a lot bloody longer than they’re meant to - they’re the Duracell Bunnies of the mining world.

And GGP is still drilling with six rigs. You’re going to get a resource update every 6-12 months.

With China throwing caution to the wind, and printing money like no tomorrow you’re going to get continually higher gold prices - and higher demand for metals like copper from the world’s largest metal importer. Meanwhile Australia is throwing capital at critical metals like the sector actually matters.

But the key point is that the ASX listing is coming next quarter (Q2 to the UK, Q4 to Australia). Therefore, this is one of the only situations where technical analysis is genuinely not useful - simply because all the indicators don’t take into account a new pool of deeply liquid investors who love gold more than their own children.

Others will wax lyrical about the gold and the copper - and the record gold price above $3k and the rocketing copper price.

I’m not sure I can add anything of value that has not already been said - other than my view that both metals are going to remain strong into the long-term future. This is critical, because the Australian superannuation funds are not investing for 2025 or 2026, but for decades to come in search of reliable dividend income.

Anyway, fuck the gold and the copper. There’s shitloads of it and that’s all you really need to know.

I want to talk about Tungsten.

Like the Incredibly Deadly Viper (spoiler warning) of Lemony Snicket’s imagination, Greatland Gold is perhaps a bit of a misnomer. Yes, the gold is the main attractant. But it also has shedloads of copper.

And tungsten.

Ironically, AEX Gold rebranded to Amaroq Minerals and Golden Metal to Guardian Metal for this polymetallic reason. These companies are not one trick ponies.

A couple of years ago, I warned that China would place strict controls on the critical metal - it exists in a sweet spot where doing this damages the west without hurting itself.

This has now come to pass.

Export controls for antimony have already absolutely rocketed its price, and tungsten is going the same way. Incidentally, I suspect tin will be next up which could be super fun…

But with Greatland’s purchase of Telfer came an asset that nobody really seems to be talking about. One which I’m not sure even makes the corporate presentation - or the website - and if it does, not in any great detail.

Consider the admission document in September 2024:

‘The O’Callaghans deposit is a skarn hosted polymetallic body sitting within limestone overlying the buried O’Callaghans granite. A mineral resource reported in 2023 by Newmont includes a total Mineral Resource of circa 54Mt containing 189kt of W (tungsten) at 0.35%, 156kt Cu (copper) at 0.29%, 335kt of Zn (zinc) at 0.63% and 159kt of Pb (lead) are 0.30%.’

Newmont is entitled to a 1.5% net smelter royalty from the asset - I wonder why this has been singled out?

At $44 a kilo, this tungsten is going to be worth circa $8 billion - and that’s without the credits.

Other tungsten plays I’ve highlighted include Guardian Metal since the IPO in 2023 - which controls the largest undeveloped tungsten deposit in the US and is poised to seize control of the rejuvenated domestic market as it continues to explore - and last year Tungsten West, which has started to recover and I hope will be in for some funding soon.

But the current investment case for Greatland effectively ignores the tungsten potential.

Other than EQ Resources’ Mt Carbine and Group 6 Metals at Dolphin, there is limited dedicated Australian production (some produce tungsten as a by-credit like Tasmania’s Kara mine).

O’Callaghans remains one of the largest and highest grade tungsten deposits in the country and has been studied for decades - with a geological model and a maiden resource estimate all the way back in 2009.

But only now is it valuable enough to process. The asset is just 10km from Telfer, with high grade mineralisation including by-credits and a clear geological understanding. This is a simple skarn system which should be relatively easy to extract and process.

Of course, there are some difficulties. It’s 350 metres deep and because the granite is not exposed at surface, you will need to deal with underground drilling and development. There’s also no gold in the asset, and the 10% sulphide content could create acid mine drainage and long-term environmental management issues.

On the other hand, Havieron has 420 metres of sedimentary cover before you hit the orebody, and GGP are already adept at working at depth.

The bottom line is that this tungsten is very valuable and not even a footnote in the story.

My guess is that this will soon change.