CA - GoldMining: An Update Was Long Overdue

Summary

• On December 30, 2022, the company announced a new At-The-Market program ATM for up to $50 million worth of shares.
• On January 23, 2022, the company announced that it tripled Gold Equivalent Inferred Resource Estimate To 1.45 Million Ounces At La Mina Project With La Garrucha Discovery.
• I recommend buying GLDG between $1.30 and $1.21, with possible lower support at $1.08.

Introduction

The Vancouver, British Columbia-based GoldMining Inc. ( GLDG )(GOLD:CA), a junior exploration company, announced two crucial news recently.

• On December 30, 2022, the company announced a new At-The-Market program ATM for up to $50 million worth of shares.
• On January 23, 2022, the company announced that it tripled Gold Equivalent Inferred Resource Estimate To 1.45 Million Ounces At La Mina Project With La Garrucha Discovery. - From the press release: *La Garrucha deposit adds approx. 1.0 million oz AuEq in the Inferred category and 0.2 million oz AuEq in the Indicated category.*Also, GLDG has updated the Mineral Resource estimate inclusive of La Garrucha positions La Mina with 1.15 million oz AuEq Indicated and 1.45 million oz AuEq Inferred resources January 23, 2023,
• Also, New GoldMining Presentation was published on January 2023.

Note: I have been covering GLDG regularly since December 2020. This article is an update of my preceding article , published on April 30, 2022.

1 - GoldMining Inc. assets

Since my last article on GoldMining nine months ago, a lot has changed, as shown below. GoldMining has grown its assets significantly. The company owns two distinct entities:

• GoldMining: a 100% owned US company with a total M&I resource of 16.4 Au Moz from large gold and copper projects.
• GoldRoyalty (GROY) with a 15% ownership.

1.1 - The US GoldMining

It is a separate public company focused on advancing primarily the Whistler gold-copper project in Alaska, USA, and the La Mima Project in Colombia with its recent positive discovery called La Garrucha. Also, the potential of $16.5 million in optioning its Almaden property in Idaho to NevGold.

Note: La Mina resource growth increased significantly with the La Garrucha discovery, with M&I and Inferred resources rising by 16% and 215%, respectively.

GoldMining owns 15 projects (stages and pre-resources) in the Americas (Au and Cu with one uranium), including four in North America. A total of 9 projects are at the mineral resources stage.

The company's total gold mineral resources measured and indicated are 16.4 Moz, and 16.3 Moz inferred.

1.2 - Gold Royalty Corp.

Note: Corporate presentation January 2023.

The company has 15% ownership in Gold Royalty Corp. ( GROY ). GLDG and GROY have dropped significantly recently and are down 15% and 43%, respectively, on a one-year basis.

Gold Royalty has an extensive portfolio of over 200 royalties:

Gold Royalty is now providing cash flow to GLDG through its royalties and streams extensive portfolio. GoldRoyalty pays a yearly dividend of $0.04 with a dividend yield of 1.6%.

2 - Investment Thesis

As I said in my previous article, the investment thesis is based mainly on faith in those junior exploration companies, and investing in such stocks is notoriously risky. Again, the company would benefit greatly by focusing on fewer projects.

One red flag is the constant threat of dilution. It is a significant risk for shareholders. As I said earlier, on December 30, 2022, the company announced a new At-The-Market program ATM for up to $50 million worth of shares.

On the positive side, the new CEO, Alastair Still, has done an excellent job since he was appointed in 2Q21. He initiated the release of the Preliminary Economic Assessment or PEA on GLDG's La Mina Project in Antioquia, Colombia. He also focused on the PEAs for its Sao Jorge Project in Brazil and its primary Whistler Project in Alaska.

However, those projects are not prime and suggest a sizeable CapEx that has increased significantly due to inflationary pressures. For instance, the La Mina project is expected to produce 120K GEOs (with 10K TPD) with a modest initial CapEx of $300 million, which might have been underestimated, in my opinion. However, the recent discovery of La Garrucha is a positive development that could help turn this project into a mine at some point. However, Colombia is not a risk-free country (issues geo-political with the new leftist Gustavo Pietro), and it will take years before the project can be wrapped up for sale.

The most important part is the price of gold and other metals. The gold price has recovered from its lows and is now trading over $1,925 on a more dovish action from the Fed.

Hence, I suggest keeping a small long-term GLDG holding as a long bet, but it is vital to trade short-term LIFO over 75% of your position regularly.

This dual strategy can be generalized to any stock and is the primary strategy in my Gold and Oil marketplace. The only component that varies is the portion allocated to short-term trading, depending on the risk.

Technical Analysis and commentary

GLDG forms an ascending triangle pattern with resistance at $1.36 and support at $1.30. In general, ascending triangles are bullish formation that anticipates an upside breakout. However, a lot will depend on the Fed decision on interest rates on January 29.

I suggest selling between $1.35 to $1.40 with potential higher support at $1.60 and accumulating a small position between $1.30 and $1.21 with possible lower support at $1.08. The stock is subject to wild swings once in a while.

Watch the gold price like a hawk.

Warning: The TA chart must be updated frequently to be relevant. It is what I am doing in my stock tracker. The chart above has a possible validity of about a week. Remember, the TA chart is a tool only to help you adopt the right strategy. It is not a way to foresee the future. No one and nothing can.

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