With the price of gold close to its all-time excessive, Greatland Gold (LSE: GGP) could also be value consideration if the share price close to 7.25p proves to supply respectable worth.

Nonetheless, there’s just a little downside with this one. The Australia-focused gold exploration and growth enterprise hasn’t but scored a full buying and selling yr of income, by no means thoughts earnings.

However that scenario could also be about to alter.

Is that this a chance, or what?

On 10 September, the corporate introduced a “transformational” acquisition from Newmont Company. The deal means Greatland will purchase the Telfer gold-copper mine and the remaining 70% stake of the near-by Havieron gold-copper undertaking, plus different associated pursuits within the Paterson area of Western Australia.

The 2 companies are aiming to finish the deal by early December, so it’s imminent. Nevertheless it’s additionally costly. The entire consideration and mortgage compensation will likely be “up to” US$475m. 

However that’s simply the beginning. Greatland has already raised $334m through an institutional putting and retail investor provide “to fund the acquisition and other uses”.  That is the most recent in an extended line of fundraising occasions, each diluting current shareholders.

Coming down the street, there’s additionally a promise of loans from a consortium of banks: $75m for working capital, $25m for contingencies, and a whopping $750m to finance the event of the Havieron undertaking.

These are huge sums of funding and shareholders have suffered to date in Greatland’s journey. The inventory chart tells the story.

I’ve discovered previously with these profitless mine-development firms that the optimum time to speculate is correct on the cusp of first manufacturing. There’s usually loads of time to get an honest entry price for a inventory when earnings are nearly a nailed-on certainty.

Holding again has saved me from a number of funding disasters through the years.

That means, many issues that may go mistaken within the growth enterprise have usually performed so — and that just about at all times appears to occur, with extra requires finance alongside the best way.

Dangle on, this one could also be completely different

Nonetheless, this example appears just a little uncommon as a result of the corporate is shopping for in at almost-ready manufacturing state. However how removed from completion is the event a part of the belongings within the deal? It appears like there’s an extended street to journey but.

Chair Mark Barnaba mentioned the acquisition of Telfer offers a “de-risked” near-term mine plan. On high of that, there are “substantial” ore stockpiles on the floor and enticing mine life extension alternatives.

Crucially, manufacturing from Telfer ought to generate free money circulation to assist the event of the Havieron undertaking.

Possession of the Telfer infrastructure “substantially” reduces the price of finishing Havieron’s growth, Banaba mentioned. It additionally “enhances” the potential worth of exploration success within the agency’s “extensive” Paterson exploration portfolio.  

There’s nonetheless danger right here, so I’ll at the least wait till the deal completes subsequent month and probably a number of weeks and months after that earlier than contemplating a purchase order of the shares.

Nonetheless, Banaba reckons the corporate is effectively positioned to construct a “generational mining complex and create value for shareholders”. So I’m conserving the inventory on shut watch and goal to observe the information circulation.