Companies: GGP   

Greatland Gold has expanded its gold exploration zone and has an advantageous potential production deal at Firetower in Tasmania.

AIM minnow Greatland, run by geologist Callum Baxter and heavily backed by small mining company supporter Bruce Rowan, hopes its drilling programme will increase potential resources at Firetower from a modest 90,000 ounces at a low grade of 0.8 grams of gold per tonne of ore to nearer its target of one million ounces. The company, which raised £1.3 million before floating on AIM in July at 2p, still has £800,000 to spend on the project, which Baxter said is open to extensions in all directions and is close to large gold deposits being developed by Newcrest, a major Aussie-quoted group, and the Beaconsfield joint venture.

Baxter, who said drilling has met intercepts ranging from two grams of gold per tonne of ore to a very rich 30 grams per tonne, claimed to draw particular comfort from a production deal he said is on offer from the Beaconsfield partners. This contemplates Beaconsfield mining and treating gold from Firetower on a ‘toll basis’ for $400 an ounce.

With gold trading above $600 an ounce, Baxter said this would leave $200 an ounce for Greatland, worth £5 million for the 50,000 ounces initially contemplated in the Beaconsfield proposal. That compares with Greatland’s current AIM value of £1.6 million and, argued Baxter, would imply an asset value of 5.5p a share, or 8p if gold hit $700 an ounce, against the 1.5p to which Greatland shares have subsided.

Andrew Bell, chairman of Regency Mines and Red Rock Resources, also chairs Greatland, which has other promising projects in Tasmania and Western Australia. The shares have speculative appeal.

Greatland Gold	AIM	£0.94m	0.48p	-0.05p
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