Why this ASX 200 gold stock is falling despite beating guidance

Investors are looking past a strong gold production update.

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Greatland Resources Ltd (ASX: GGP) shares are sinking on Monday, despite the gold and copper miner releasing a strong production update. 

In early morning trade, the Greatland share price is down 5.61% to $11.11. By comparison, the S&P/ASX 200 Index (ASX: XJO) is down 0.2% to 8,823 points. 

The fall extends a weaker run for the ASX gold stock. Greatland shares are now down almost 16% over the past month, although they remain around 60% higher since this time last year. 

Here's what investors were given. 

A sad looking engineer or miner wearing a high visibility jacket and a hard hat stands alone with his head bowed and hand to his forehead as he speaks on a mobile.

Image source: Getty Images

Production comes in ahead of guidance

According to the release, Greatland produced 79,090 ounces of gold and 3,573 tonnes of copper during the June quarter.  

This lifted full-year production to 328,986 ounces of gold and 14,594 tonnes of copper.

Management said full-year gold production was 6% above the top end of its FY26 guidance range of 260,000 to 310,000 ounces. 

Sales were solid as well, with Greatland selling 74,648 ounces of gold and 5,311 tonnes of copper during the quarter. For the full year, sales came in at 326,859 ounces of gold and 14,729 tonnes of copper.

While the production result was strong, investors will have to wait a little longer for the cost side of the update. Greatland said its all-in sustaining cost (AISC) is still being finalised and will be included in its June quarterly activities report later this month. 

Cash balance moves higher

The balance sheet was another positive part of the update.

Greatland ended June with $1.289 billion in cash, up from $1.208 billion at the end of March. It also had nil debt.

Even after capital expenditure and an $87 million quarterly tax instalment, Greatland still added $81 million of cash during the quarter. 

The company noted that another $20 million of sales were completed in late June, with the cash received after the quarter ended.

Why investors are still selling

Greatland has already had a huge run over the past year, so investors may have been looking for a reason to take some profit off the table.

The missing AISC figure may also be holding back some buyers. Without it, investors don't yet have the full margin detail, even though production and cash were clearly strong.

Can Greatland shares find support?

I still think this was a good update.

Gold production came in ahead of guidance, cash moved higher, and the company remains debt-free. These numbers give buyers something solid to work with once the selling settles. 

The June quarterly report later this month will be the next key update.

If costs land around expectations, Greatland shares should have a decent chance to find support after this recent pullback.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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