Berenberg has started coverage on Greatland Gold PLC (LON:GGP) with a target price of 22p, but added a second discovery on its acreage in the Paterson region of Western Australia would transform its value.

Greatland Gold has already made one tier-one discovery within the Paterson region at Havieron, but exploration activity in the area is ramping up says the broker.

“Rio Tinto’s Winu project and Havieron have raised interest in what has been a relatively unexplored region due to the high degree of sand cover.”

Outside Havieron, Greatland retains a 100% interest in a number of other projects in the region – including Scallywag, Black Hills and Paterson Range East.

At Havieron, partner Newcrest Mining can acquire up to 70% of the project by funding it through to feasibility study.

An initial resource estimate for Havieron is due before the end of 2020 and based on results so far, the broker expects it to show 3.75Mln oz with a further 1.65Moz to come when drilling at the Breccia Zone is completed in 2021.

According to Berenberg, the Australian mid-tier domestic gold miners are trading at an EV/oz reserve value of USD731/oz versus USD484/oz for the whole Australian peer group, including the smaller operators and global miners.

Berenberg said it attributes a value of US$614mln (£491mln) to Havieron and US$413m for Greatland’s other holdings across the Paterson region.

‘Hold’ is its investment recommendation with the main catalysts for the shares to be Havieron moving through the exploration and feasibility process and the results from the company’s wholly-owned portfolio.

Shares have risen more than eleven-fold over the past twelve months as the drilling results from Havieron have come through and were 20.75p today.