An investment of £10,000 made six months ago in Greatland Gold (LSE:GGP) would now be worth around £22,200. The stock has surged 122% in that time, making it one of the hottest tickets in the UK market. This remarkable run comes as gold prices hit record highs and as the mining firm transforms from a speculative explorer into a bona fide producer.
Catalysts
The catalyst for this rally was Greatland’s December 2024 acquisition of the Telfer gold-copper mine and a 70% stake in the world-class Havieron project in Western Australia. Telfer, a producing mine with substantial stockpiles of ore, has immediately positioned Greatland as a mid-tier gold producer. It also means generating cash flow to fund Havieron’s development.
Havieron itself is a standout asset. It has 8.4m ounces of gold equivalent and some of the lowest projected all-in sustaining costs in the industry. By integrating Telfer’s infrastructure, Greatland is aiming to de-risk Havieron and extend Telfer’s mine life. This creates a dual-asset strategy that has caught the eye of both retail and institutional investors.
Gold prices have played a major role in Greatland Gold’s surge. They’ve risen over 37% year on year and hit all-time highs above $3,400 per ounce in early May 2025. Since January, gold has gained more than 17%, driven by several things including geopolitical tensions and a weaker US dollar.
The valuation
The numbers reflect this transformation. For 2025, Greatland is expected to swing to profitability, with a forecast price-to-earnings (P/E) ratio of 19.5. That’s a dramatic improvement from recent years, when the P/E was deeply negative.
Looking ahead, the P/E is expected to fall to 15.1 times in 2026 as earnings ramp up, before rising to 22.1 times in 2027. This may reflect a forecasting error rather than a downturn in earnings towards the end of the period.
The price-to-book ratio is also coming down, forecast at 3.7 times for 2025 and 2.9 times for 2026. That’s below sector averages.
Importantly, Greatland’s financial position is strong, according to the analysts. Net debt is forecast to swing to a net cash position of £247m by June 2025, rising to £377m in 2026, thanks to Telfer’s cash flow and a carefully managed debt facility.
This gives the company breathing room to fund Havieron’s capital-intensive development without the risk of near-term liquidity crunches.
The bottom line
Of course, risks remain. The share price is now well ahead of some analysts’ targets, and the valuation assumes flawless execution at Havieron. Production at Havieron isn’t expected until H2 of 2026, and gold prices could change a lot before then.
Personally, it’s not the type of investment I go for. This is purely because I think there are so many moving parts when investing in mining stocks, and honestly I don’t believe I understand it perfectly.
Nevertheless, I appreciate that the potential rewards are clear. At steady-state, Havieron could generate 258,000 gold-equivalent ounces annually for two decades, while Telfer’s life could be extended through further exploration.
