Why the Greenland Minerals (ASX:GGG) share price is crashing 38% on Friday

This mineral explorer’s shares are ending the week deep in the red…
The post Why the Greenland Minerals (ASX:GGG) share price is crashing 38% on Friday appeared first on The Motley Fool Australia. –

The Greenland Minerals Ltd (ASX: GGG) share price has come crashing down to Earth on Friday.

In morning trade, the rare earth-focused mineral exploration company’s shares were down as much as 38% to 7.7 cents.

The Greenland Minerals share price has since bounced back a touch but currently remains down 29% at 8.9 cents.

Why is the Greenland Minerals share price crashing?

The Greenland Minerals share price crashed today after Greenland’s parliament passed new legislation concerning uranium mining.

The new legislation prohibits preliminary investigation, exploration, and exploitation of uranium, which it defines as uranium content which occurs at 100 parts per million (ppm) or greater in the total resource.

In addition, the legislation permits the Greenland Government to extend that prohibition to other unspecified radioactive elements by imposing permitted limit values on those elements. It also serves to reverse initiatives, policies and legislation adopted by successive governments over the past decade.

But there are no uranium projects in Greenland?

The company notes that there are no active primary uranium projects in Greenland. Therefore, the legislation is directed at the production of rare earth materials and other critical metals, where it is common for ores to contain radioactive elements including uranium and thorium.

Given the company’s hopes of developing the Kvanefjeld rare earth project in the country, this is a bitter blow. Particularly given its belief that the project has the potential to become the most significant western world producer of rare earths.

However, the news is not unexpected. In April the Greenland Minerals share price crashed lower after Greenland’s left-wing environmentalist party won the country’s election. During the campaign, the the Inuit Ataqatigiit party vowed to stop the project.

What now?

Management advised that it is seeking clarity as to how the new legislation will effectively modify existing approvals or authorisations.

It also notes that it is not aware of any technical, radiological, or health and safety reasons why the Greenland Government has selected a threshold level of 100ppm uranium for the legislation.

Management highlights that a comprehensive radiological assessment of the Kvanefjeld Project was undertaken by independent specialist consultancy Arcadis. It concluded that “the Kvanefjeld Project is expected to release only small amounts of additional radioactivity to the environment and is not expected to result in an adverse effect, or significant harm, to wildlife or people that live or visit the area.”

Time will tell whether that will be enough for the Greenland Government to allow the project to go ahead.

The post Why the Greenland Minerals (ASX:GGG) share price is crashing 38% on Friday appeared first on The Motley Fool Australia.

Should you invest $1,000 in Greenland Minerals right now?

Before you consider Greenland Minerals, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Greenland Minerals wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why the Latrobe Magnesium (ASX:LMG) share price bolted 38% today

Signed: Credit Clear (ASX:CCR) share price spikes 12% on new agreement

The HT&E (ASX:HT1) share price is up 7% on acquisition update

ASX 200 (ASX:XJO) midday update: BHP & Fortescue rise, Zip completes acquisition

BARD1 Life Sciences (ASX:BD1) share price leaps 15% on US patent news

Motley Fool contributor James Mickleboro 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 Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!