GoldMining, a Stock in Gold to Own for 2022

Marc Challande
minute read

GoldMining (GLDG) is on track to become the next superstock. Through many factors, it is evident. As the economy is going through uncertainties like the geopolitical conflict between Ukraine and Russia shaking the world, rising inflation, and a hike in rates done by the Feds, gold proves to be the safest and most reliable asset to own more than ever. GoldMining is an under-the-radar company, and investing now is an excellent opportunity for your portfolio to grow.

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Gold and GoldMining are Set to Have a Booming Growth

Gold, throughout history, has always represented safety when times were tough. Recently, investors have turned their backs on gold and have moved toward cryptocurrencies to fight against inflation. The recent regulations coming from several countries has cooled down the influx of  investors. They  then returned to the world’s most famous commodity.

We will see the demand for gold increasing in the upcoming months. Several catalysts will happen, starting with India and its festival/ wedding season that is underway. High demand will come from China with the Chinese New Year. However, the main factor is that pre-pandemic life is going back to normal. This post-pandemic need could lead to a gold shortage, increasing the gold value because of its rarefaction. Last year, miners produced just over 3,000 metric tons of gold. At the current rate we extract gold, we could witness a shortage in underground gold reserves in 18 years if we do not discover new reserves.

GoldMining has one of the largest gold and gold-copper resources portfolios out of any junior explorer/developer. Their commodity exposure represents 81% in gold, 18% in copper, and 1% in silver. It is also exciting to note that the company now has uranium projects led by Amir Adworld (chairman of GLDG) who formerly founded Uranium Energy Corp (UEC). Uranium is one of the best energy sectors for several reasons. This means the company will be involved in the world’s most essential commodities, gold and uranium. GLDG is also engaged in Gold Royalty Corp, which enables the company to grow its exposure to the world’s top mining Jurisdictions: ~75% of NAV in Quebec and Nevada.

Share Structure/Fundamentals

There currently are 149M shares outstanding. Adding to this number, we have 10M options + restricted stock units that lead to 159.7M shares fully diluted. This number is more than satisfying and more significant in the gold sector because companies from time to time need to cut shares to raise cash for new projects. The company has no debt, has USD $0.86M in cash, and secured a USD $20M in BMO Facility. Thanks to this data if you fear dilutions, we won’t see them coming from GoldMining.

The company is also involved in another Gold mining company: Gold Royalty Corp (GROY). GLDG owns 15M shares of the company, representing 20 million shares in GROY for a valuation of USD 84M. The company receives royalties from GROY representing USD $800.000/year, and GoldMining benefits from future upside as the largest shareholder.

If you are still doubting the company’s potential, big names such as Black Rock, Rick Rule, and Doug Casey are involved in GoldMining

Share Movement

With a current market cap of USD $253M, the stock price is currently traded at $1.67 with a 52-weeks high of $1.94 (reached on May 25th, 2021) and a 52-weeks low of $0.98 (reached on December 15th, 2021). The stock price does not know the downtrends that most of the companies endured as GLDG is up by 51% (6 months timeframe) and is up by 70% since its 52-weeks low.

The share movement is currently BULLISH. With an RSI of 50, The stock is not in over-bought or over-sold territory (under 30 or above 70), which means the stock price is healthy. The bullish trend is also buoyed by the Simple MA (20) that crossed the Simple MA (200). Indeed, the Simple MA (20) is at $1.66 when the Simple MA (200) is at $1.58.

Moreover, the Bollinger bands indicate that we could see daily fluctuations between $1.62 to $1.71b but this is just short-term. Also, the stock witnessed a Megaphone Bottom Formation. The result is that it could potentially propel the stock price to a target price between $2.70 to $2.90. All the signals are green (short, intermediate, long) for the stock and this is positive data.

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We witnessed a decrease in volume during the last couple of days, but this is due to the global instability of the stock market. The 30-day AVD is at 1.18M when the 10-day AVD is lowered to 994k. The volume should progressively increase as gold and gold-related companies attract more interest in the future.

The stock is considered undervalued. Several reports indicate that the stock price should be traded way above its current value:

  • Quant Reports fair valuation: USD $3.10
  • MarketWatch Price Target: USD $4.52

The Crypto sector currently fails to be a safe and reliable asset, and investors are eyeing commodities. GoldMining represents an excellent opportunity for investors to invest in a safe venture.

Bottom Line

All the indicators are green for GoldMining. More than ever, gold represents a safe asset during geopolitical conflicts as seen by the tensions between Ukraine and Russia. Investors will naturally go toward commodities and companies related to the sector. Its different assets grant the company a significant income, and as the largest shareholder of Gold Royalty corp, GoldMining will grow from its operations and GROY’s. If you are looking for a safe company to invest in with a considerable upside, GLDG is made for you.