Could this penny stock be about to explode?

Jabran Khan delves deeper into this penny stock and wonders whether recent activity and news could mean a massive upturn in fortunes and its share price.

| 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.

The Greatland Gold (LSE:GGP) share price journey has been a roller-coaster ride in the past 18 months or so. With some recent positive news, could this penny stock be on the cusp of exploding and should I add shares to my portfolio?

Gold miner

Greatland is a gold miner that is still very much in its infancy in its journey. I say this as it is still in its exploration phase. Essentially, this means that mining has not actually begun just yet. GGP is undertaking a drilling process to determine whether or not its chosen sites and projects would be viable.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

As I write, shares are trading for 19p per share. Penny stocks are those which trade for less than 100p per share. In 2020, it experienced a 1,700% share price increase. Shares rose from 2p per share to 36p between January and December 2020. The primary reason for its share price halving to current levels is due to the volatility of gold prices. Gold has fallen in price recently, negatively affecting share prices of gold miners.

Promise ahead

Greatland has revealed that drilling on its prominent sites is revealing positive results. Its flagship project at Haverion (a joint venture with Newcrest) is showing signs that there could be over 4m ounces of gold. Based on current prices, that equates to approximately £5.6bn in gold. I believe GGP will make the decision to mine at the Haverion site soon. This could result in a sharp share price rise in my opinion.

Other Greatland projects are also showing promise too. The Juri venture (another joint venture with Newcrest) was recently reported to have found gold mineralisation in the area. This site could be commercially viable for GGP. This is also the case at its other project at Scallywag where GGP has commenced drilling too. Scallywag is a 100% Greatland owned project, however.

Penny stocks carry huge risks

I believe the Greatland Gold share price could explode if these projects bear fruit. As a savvy investor, I would be naive to ignore the risks.

Firstly, Greatland is in a position financially where it is relying on established gold miner Newcrest at its most prominent projects. It may find itself unable to finance projects which could mean running out of money and shareholders being left high and dry.

Furthermore, if Greatland decides not to mine at its most promising sites despite the recent good news, this could be catastrophic for investors. I do not believe this will happen, however. A lot of its share price increase in 2020 was based on progress at its Haverion site and expected success there.

Greatland Gold excites me as a penny stock with huge potential upside in my opinion. I would be willing to risk some of my money to invest in a small amount of shares. I understand there will be some volatility but based on Greatland’s current share price, I would be willing to take a chance and add shares to my portfolio.

FREE REPORT: Why this £5 stock could be set to surge

Are you on the lookout for UK growth stocks?

If so, get this FREE no-strings report now.

While it’s available: you'll discover what we think is a top growth stock for the decade ahead.

And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

What’s more, it deserves your attention today.

So please don’t wait another moment.

Get the full details on this £5 stock now – while your report is free.

Jabran Khan 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

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

This cheap share fell 30% last week. I’d buy now

This huge US corporation saw its shares crash by 30% last week. But I'd buy this surprisingly cheap share now…

Read more »

Various denominations of notes in a pile
Investing Articles

These 7 shares produce passive income of 7% to 11% a year!

Passive income is extra money I make without working. By buying these seven shares, I could earn 8.9% a year…

Read more »

A person holding onto a fan of twenty pound notes
Investing Articles

6.6%+ dividend yields! 2 FTSE 100 dividend stocks to buy

Finding the best dividend stocks to buy requires extra care today as soaring inflation takes a bite out of shareholder…

Read more »

Arrow symbol glowing amid black arrow symbols on black background.
Investing Articles

At 85p, are Rolls-Royce shares a slam-dunk buy?

The Rolls-Royce share price is in penny stock territory. Roland Head explains why he thinks this FTSE 100 stalwart looks…

Read more »

Business development to success and FTSE 100 250 350 growth concept.
Investing Articles

‘Big Short’ investor Michael Burry is buying this quality growth stock! Should I?

In the first quarter, Michael Burry bought more of this growth stock. Is this a hint that I should also…

Read more »

A beach at sunset where there is an inscription on the sand "Breathe Deeeply".
Investing Articles

Stock market crash: here’s why falling prices is good news

Over in the US, a stock market crash is battering high-priced stocks. But I see falling shares as an opportunity…

Read more »

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

These 5 FTSE 100 shares crashed in 2022. I’d buy 1 today

Although the FTSE 100 index is flat in 2022, some Footsie shares have crashed hard this year. But I see…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

How investors can boost their passive income when the FTSE is falling

Stock markets are plagued with fears right now. Here's why I firmly believe those fears improve our passive income prospects.

Read more »