Interactive Investor

Insider: Greatland Gold star buys stock, Eqtec FD sells

8th February 2021 14:51

Graeme Evans from interactive investor

After leading the gold miner to success, Greatland’s CEO has bought big just before his departure.

Today's arrival of a new chief executive at Greatland Gold (LSE:GGP) hasn't stopped its outgoing boss from spending £112,000 on backing the Australian mining explorer for further success.

Gervaise Heddle joined AIM-listed Greatland in May 2016 and has overseen its transformation into a company worth £1 billion. The busines is based primarily on gold and copper prospects at its Havieron discovery in western Australia.

Shares started 2020 at 2p, but with Greatland harnessing the financial muscle and operational support of Newcrest Mining, they soared above 38p briefly in December.

That's delighted the many retail investors who have backed the stock, although, as with any explorer, their investment carries additional risk in what can be an all-or-nothing industry.

Trading so far in 2021 has been much less certain, with Greatland shares back at 22.4p when Heddle bought his shares on Monday of last week.

He announced his purchase on Twitter, telling 4,000 followers on the social media platform: “Greatland in key strategic position with highly attractive assets, new CEO with strong M&A and corporate experience commencing shortly, stock extremely oversold in my view.”

The latest purchase by the former Merrill Lynch fund manager will mean he leaves with a Greatland holding worth £19 million. He remains part of the executive team until 12 March, but has handed over CEO duties to Shaun Day from today.

His successor spent five years as chief financial officer of Australian gold producer Northern Star Resources, and is seen as having the necessary large-scale mining pedigree and track record of building major mining companies.

Day, who does not currently hold any Greatland shares, has been granted five million performance options at an exercise price of 25p and three-year vesting period.

His ultimate goal will be to bring about commercial production at Havieron, although for now the focus of shareholders will be on results from 138,504 metres of drilling completed across 153 holes since Newcrest commenced work in the summer of 2019.

The 2021 drilling programme includes plans for approximately 65,000 metres of drilling within the next six months.

Analysts at Berenberg said on 28 January that results so far provided evidence that Havieron is “a large scale deposit that should be developed as a bulk underground mining operation”.

Ore produced by Havieron is expected to be processed at the nearby Telfer mine that is owned and operated by Newcrest. Telfer has produced millions of ounces of gold but is nearing the end of its life, raising the prospect that Newcrest will want to advance the Havieron project.

Berenberg has retained its 33p share price target, based on an enterprise value per ounce of US$696 and the assumption that Greatland will continue to have a 30% interest in Havieron. The company is also exploring other prospects in the same region.

The recent Berenberg note added: “We have preserved our ‘hold’ rating for the stock as the very strong performance of the shares in 2020 reflected the excellent potential of Havieron, which continues to be validated by ongoing exploration results.”

Eqtec bean counter sells stock

Waste-to-energy firm EQTEC (LSE:EQT), which featured alongside Greatland Gold on 2020's list of best AIM stocks, saw both buying and selling of its shares by directors last week.

The Cork-based company has caught the eye in the alternative energy sector by using various waste streams as feedstock to create syngas, which can then be used to generate electricity.

To date, four commercial plants have been built and are using Eqtec's technology, with the oldest from 2011 having operated for over 125,000 hours. The latest milestone came last month when councillors in Stockton-on-Tees granted planning permission for a waste gasification and power plant at Billingham that Eqtec is developing with a local landowner.

The proposed Billingham plant has the potential to turn 200,000 tonnes a year of non-recyclable everyday municipal waste, that would otherwise go to landfill or incineration, into enough green electricity to power 50,000 homes, and 34MW of thermal heat production.

The company, which has the London Stock Exchange's Green Economy Mark, dates back to 2008. Its finance director Gerry Madden, who was chief executive from 2011 and 2017, has just 
raised more than £475,000 by selling stock for the first time, the majority of which related to shares received through salary sacrifice programmes initiated by the company.

His move comes after a spectacular recent run for the Eqtec share price, which has soared from 0.48p in mid-November to 2.76p in January. The disposal of 25 million shares at 1.91p has left Madden holding 510,038 shares alongside 225 million options and warrants.

On the same day, non-executive director Thomas Quigley spent almost £100,000 on 5.2 million shares at 1.91p.

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