The arrival of Metal Tiger (LON:MTL) and Starvest (LON:SVE) onto the register of Greatland Gold PLC (LON:GGO) has certainly breathed new life into a well-established old company.
Greatland has been prospecting in Western Australia for several years now, but as any investor in the mining space knows, until very recently exploration has been out of style.
Not any more though, or at least not if the 400% jump in Greatland’s share price since February is anything to go by.
Metal Tiger, as readers with mining interests will know well, has been highly active in the mining space for over a year now, moving into spaces where others feared to tread.
In a sense, the £150,000 position it took in Greatland back in April represents one of its lower risk investments, as Greatland has ground in a safe jurisdiction, is going after straightforward commodities in gold and base metals, and has long been in the capable geological hands of Callum Baxter.
Baxter has built up an enviable portfolio of exploration prospects across Western Australia, including, possibly, one of the only prospective nickel sulphide projects anywhere in the world. And lest anyone doubt his market savvy, upon the retirement due to ill-health of mining investment veteran and semi-legend Bruce Rowan last year, it was Baxter who took up the reins at the head of his vehicle Starvest.
But following the fundraising in April, Metal Tiger’s Paul Johnson has joined the board, adding his own particular brand of market-savvy nous and promotional energy into the mix.
But he’s not the only small cap expert on the board of Greatland - Andrew Bell, serial mining entrepreneur and the man behind Redrock Resources (LON:RRR) and Regency Mines (LON:RGM) sits as chairman.
Finally, former Merrill Lynch and Macquarie director Gervaise Heddle rounds off a more than capable team.
This is quite some proposition. With some new funds and a favourable market it was quite conceivable that Greatland Gold might come alive after a long period in which Baxter concedes the company’s key projects weren’t heavily promoted.
After all, he’s been working away in the background on several projects, in particular the Bromus nickel sulphide deposit near Norseman, and the Ernest Giles gold project in the Yilgarn, some way north of Gold Road’s (ASX:GRR) Yamarna deposit which now boasts several million ounces.
It just needed a market that was willing to be alive to the potential and someone like Paul Johnson to come in and deploy a track record of recent success in favour of Greatland for things to start moving.
Within the last few days Greatland has now announced that it will be setting the drill rigs to work both at Ernest Giles and at Bromus, with a view to establishing just exactly what sort of prospects these really are.
In a sense the timing couldn’t be better.
“We think we’re at or near the bottom of the commodity cycle,” says Heddle.
Baxter agrees. “We’ve passed the bottom of the cycle,” he says. “The management of Greatland now believes there’s going to be a recovery.
To be sure, the nickel price is still on its back, so there may be some scepticism about the merits of pressing on with Bromus right now.
But Heddle has an answer for that. He points out that as one of the most exciting nickel sulphide projects in the world the potential uplift is huge. It may not be the size of the Nova deal that made billionaires of Sirius Minerals shareholders, but it could turn out to be pretty big for all that.
It will cost around £125,000 in drilling and assay costs to have a proper look, and the board is comfortable with that level of spend.
At Ernest Giles the exploration is even more speculative, but the upside is equally, if not more attractive.
“Because it’s remote and the rocks don’t pop out of the ground no one’s really explored it,” says Baxter. “But we are the first movers here. We put in a couple of wildcat holes and we hit greenstone and we got gold mineralisation.”
He’s careful not to excite expectations too much at this early stage. “We’re not looking for ore-grade intercepts right now.” Rather, indications that Greatland is on the right track would be more than satisfactory.
After all, as Heddle says, “if we do enter into a gold bull market we can say we’ve got a big stake over a huge gold project.”
And that really would be quite something.