In a June 25 research note, H.C. Wainwright & Co. analyst Heiko Ihle reported two GoldMining Inc. (GOLD:TSX; GLDLF:OTCQX) news events.
The first, most recent development, Ihle relayed, is that the Vancouver, British Columbia-headquartered company created a wholly owned gold-focused royalty subsidiary, called Gold Royalty Corp., that will contain existing and future net smelter royalty returns on its projects and "may unlock future shareholder value." The company's "extensive portfolio includes 14 recently created net smelter return (NSR) royalties spread across GoldMining's current asset portfolio," the analyst noted.
In the future, GoldMining could expand its new company's portfolio by buying back project rights held by third parties and add more shareholder value via a possible spinoff, initial public offering, merger or sale of Gold Royalty, Ihle stated.
"GoldMining therefore appears poised to benefit from a future rerating if management can produce tangible value from its new subsidiary," because royalty and streaming companies tend to trade at higher values than explorers and producers, Ihle commented.
Second, Ihle indicated, GoldMining filed an NI 43-101 technical report, containing an initial Inferred resource estimate, on its Yarumalito gold-copper project in Colombia. The pit-constrained resource, based both on porphyry and epithermal mineralization, consists of 1.23 million ounces (1.3 Moz) of gold and 129.26 million pounds of copper, or 1.50 Moz gold equivalent. Grades average 0.58 grams per ton gold and 0.09% copper.
GoldMining is expected to conduct future exploration and drill programs at Yarumalito, which are needed to "better define the geometry and continuity of the higher-grade epithermal veining" that seems to "overprint the porphyry-style mineralization," Ihle pointed out. The latter measures about 2,000 meters (2,000m) in an east to west direction, 500–1,000 meters north to south and 650m in vertical depth. Only 55 holes were drilled historically at Yarumalito.
Ihle concluded that GoldMining is expected to overall "continue unlocking shareholder value through advancing its exploration-stage asset base, especially as gold prices continue to remain strong" and "could enter into a transaction that should provide liquidity to GoldMining as well as a more tangible value to Gold Royalty Co."
H.C. Wainwright has a Buy rating on GoldMining with a CA$6.50 per share target price; the current share price is CA$2.35.
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Disclosures from H.C. Wainwright & Co., GoldMining Inc., Company Update, June 25, 2020
I, Heiko F. Ihle, CFA, Tyler Bisset and Marcus Giannini, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst’s household has a financial interest in the securities of GoldMining, Inc. (including, without limitation, any option, right, warrant, future, long or short position).
As of May 31, 2020, neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of GoldMining, Inc.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.The firm or its affiliates received compensation from GoldMining, Inc. for non-investment banking services in the previous 12 months.
The Firm or its affiliates did not receive compensation from GoldMining, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
The Firm does not make a market in GoldMining, Inc. as of the date of this research report.
H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report.