RSD at Beaver Creek Interview Series: GoldMining (TSX: GOLD) Chairman Amir Adnani

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the Chairman of GoldMining Inc. (TSX: GOLD)(OTC: GLDLF), Mr. Amir Adnani. Amir, how are you?

Amir Adnani: It's very nice here in Beaver Creek, isn't it?

Gerardo Del Real: We're here at the 2019 Beaver Creek Precious Metals Summit. You're still Chairman of GoldMining Inc?

Amir Adnani: Let me check ... yes, yes, still involved. But all kidding aside, I mean, this is a bit of a milestone conference in the sense that this is the first gold conference that GoldMining is attending where gold is at $1,500.

Gerardo Del Real: Correct.

Amir Adnani: We made our first acquisition in 2012 when gold was kind of in a $1,300-ish environment. Just about all of our acquisitions since 2012 have been made in a sub-$1,300 environment. During that time frame, we attended a number of mining and gold conferences and, as you know, the sentiment and mood was always very weak during a fairly prolonged bear market for gold. That's exactly the period during which, as you know, we've built this portfolio of seven projects in five countries throughout the Americas.

So this is a very, very interesting conference to be at when we're flirting with that $1,500 level. Everyone here that you and I have been talking to is curious about the stickiness of $1,500. That's the big sort of thing, I think, in the back of everyone's mind, tempering probably the enthusiasm. But it's very interesting and it's great to sort of see that these commodities are indeed cyclical. Right? Because we kind of take this view and you talk about it for a long time and you say these things are cyclical and it finally has to turn.

It was interesting, 48 hours ago, I think on the eve of this conference starting, Citigroup as you know, Citibank, came out with their forecast in gold price calling for $2,000 gold in the next 6 to 12 months, I think. It's not every day that you start to see this sort of big banks and just about every institutional investor, big guys from Ray Dalio to others, talking about what's to come for gold. So it's very exciting.

Gerardo Del Real: It is. I jokingly asked if you were still Chairman of GoldMining Inc. because, let's be frank and kidding aside, GoldMining Inc., this environment today, $1,500 gold, this new bull market, frankly this is what you built the company for. This is a milestone event for GoldMining Inc. You mentioned the fact that you negotiated and brought in these assets at sub-$1,300 gold. The leverage there is incredible.

For people that are not familiar with the GoldMining Inc. story, you mentioned the jurisdictional diversification. Can you talk about the resource across all categories? I believe it's over 20 million ounces now?

Amir Adnani: Yeah. So first of all, we absolutely wanted to be geographically diversified. Today we have projects in the US, Canada, Brazil, Peru, and Colombia. Second, we want it to be in jurisdictions where there's regional activity. There's companies much bigger than us, intermediates, majors, all active and developing.

We were strictly interested in projects that had a 43-101 resource. We didn't want just exploration. We wanted something that had been drilled out where you've got resources in the ground. In some cases, these projects had even more advanced economic studies completed on them. It was a classic case of being able to acquire for 10 cents on the dollar.

In that context, when you look at the total resource portfolio of approximately just under 23 million ounces –n ow half of that is measured and indicated, half of that is inferred – that's all gold. We have quite a bit of copper as a co-product in some of the deposits. On a gold equivalent basis, the number is even higher than that, I think it's close to about maybe 28 million ounces.

I think today at $1,500 gold, it would be next to impossible to replicate or put together what we've assembled in the last eight years since we've been a public company, nine years since the company was formed in 2010. And so to be in multiple jurisdictions and have that size and scale, I mean, for people that may not be familiar with what 22 million ounces means, 99% of pre-production gold companies don't have a couple of million ounces yet alone in that kind of ballpark. So it's truly sizable and I think you and I know that in bull markets for commodities, be it gold or anything else, size matters.

Gerardo Del Real: All about scale.

Amir Adnani: It's all about size and scale. And of course no one wants that size and scale. You recall, you and I have had conversations about this, when gold was at $1,100, many investors wanted smaller, high-grade projects that were economic in that environment.

Gerardo Del Real: High margins.

Amir Adnani: High margin.

Gerardo Del Real: Absolutely.

Amir Adnani: We felt that the projects we were acquiring were subeconomic. At $1,200 gold, they were subeconomic, but that's why you could buy them and they were cheap. At $1,400 and $1,500 gold, these projects become much more interesting. And not to mention, I think one big theme that we're hearing at this conference, this sort of incredible wall of decline for the entire gold industry of resources, reserves, and production. A decade of under investment and exploration.

You know, the fact that during the bear market for gold, the major gold companies were focused on deleveraging their balance sheets, less focused on exploration and development, growth was not the term being discussed in the boardrooms. Now you've got these companies that have great balance sheets, cashflow positive, and the word that they're looking for now is growth. And in our business, as you know, growth starts with resources and that's the pipeline that leads to future mine development.

Gerardo Del Real: Excellent. What can shareholders or potential shareholders expect from GoldMining Inc. in the next 12 months?

Amir Adnani: I think to a great extent, more of something that we've been extremely disciplined about, and you can appreciate this. In the junior mining business, where again we're development stage companies, you need to raise capital. We have been very, very strict about avoiding dilution. As you know, the last time we raised equity or issued equity to raise capital was in 2016 and the company today, as of its last reported filing, still has $8 million of cash.

So one thing you can expect from us is more of that and that we're running an extremely sort of tight operation in terms of finances. We want to avoid dilution because we really look at the exposure we create for investors in terms of total gold and total shares outstanding. And we want to look at gold resource on a per share basis. That's the value driver. And one thing that investors that look at the gold sector and look at us today can realize and see, is that year-to-date with the rise in the gold price, the shares of GoldMining have risen in a way that you would expect it to do for what it has. And I think that is a confirmation of the business plan, that's a confirmation of the fact that our total measured and indicated resources, I'm even excluding inferred, are trading at about $12 an ounce in the ground.

The market has re-rated higher, but at $12 an ounce that's still much lower compared to where historic M&A multiples have been. So I think one aspect of what we expect to see is more of this re-rating in the market, more perhaps of acquisitions. I think right now we're of the view that there could still be deals out there for us to execute accretively, we haven't kind of taken our eyes off of that, but definitely also a focus towards now advancing the portfolio.

We've gathered, we've gathered, we've gathered, and now it's time to kind of de-risk and push some of these assets forward. We've got the balance sheet to do it. But I'm very much focused on that gold per share kind of ratio. I think that's an excellent way to think about creating that sort of correlation to the rise in gold environment.

Gerardo Del Real: It's a gold mining company built for the new gold bull market. What's the ticker symbol?

Amir Adnani: Ticker symbol GOLD on the Toronto Stock Exchange.

Gerardo Del Real: That's G-O-L-D everybody.

Amir Adnani: Not to be confused with Barrick, which is GOLD on the New York Stock Exchange. And yeah, look, when you look at 2016 when we had that rally in gold equities, our company got up to, I think in Canadian dollars, we got up to about $3.50 a share in Canadian dollars.

Gerardo Del Real: On the anticipation of a gold bull market. It wasn't even...

Amir Adnani: The anticipation. Gold market got to $1,350. It didn't get anywhere near where we are right now.

Gerardo Del Real: Correct.

Amir Adnani: This time there's a fascinating dislocation to observe, which is you really have a breakout in the gold price at $1,500, but the equities have been very shy, very timid, and haven't yet repeated their 2016 performance. I mean, ourselves, we're still at one third of our 2016 valuation or share price, but we've almost doubled our total resources. I looked at it before our interview, July of 2016 we had 10 million ounces in all categories, and today, as we've mentioned, is well over 20 million ounces.

So more gold exposure, more diversification, and an interesting dislocation between the breakout on the gold price and equities this time definitely lagging, whereas in 2016 they were leading. The market gives it to you in different ways each time, right?

Gerardo Del Real: Absolutely. That's the opportunity.

Amir Adnani: That's the opportunity, yeah.

Gerardo Del Real: Amir, thank you.

Amir Adnani: Thank you, Gerardo.

Gerardo Del Real: Pleasure as always.

Amir Adnani: Yeah.