Could This Company Be Among the Next Group for a Gold Play?

Photo by Sharon McCutcheon on Unsplash

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GoldMining Inc. GLDG might provide investors with an interesting opportunity as fundamental and technical data could be viewed as supporting a bullish hypothesis for the next year for gold.  

Several catalysts have caused investors to share this optimism for the commodity. 

 A particularly potent catalyst is the Federal Reserve’s outlook to execute three interest rate hikes in 2022. Rising interest rates have long coincided with growth in gold assets. Gold has averaged a 200% appreciation within the last five rate hike cycles. 

Rising demand for gold jewelry and scarcity in gold reserves serve as other potential fundamental catalysts, and an examination of the VanEck Junior Gold Miners ETF GDXJ might be able to provide further ammunition for optimistic bulls. The chart showcases a textbook cup and handle pattern that’s indicative of a potential continuation to the upside. 

With technical and fundamental factors potentially aligning, some investors may be wondering how certain companies are preparing.  

With a portfolio of 15 companies across North and South America and a history of outperforming gold appreciation cycles, GoldMining believes it may just have the potential to spearhead a renewed gold movement, and is reportedly planning to capitalize on it.

Blackstone Inc. BX, for example, is a shareholder, and Amir Adani, an entrepreneur, and investor, who has already realized 300% increases in his companies Uranium Royalty Corp URC and Uranium Energy Corp. UEC, is a founder. Analyst firm H.C. Wainwright & Co. has also placed a price target of 5 to 6.25 Canadian dollars on the company, which implies a 400% potential upside run from its current price at the time of writing.  

The market’s valuation of the company’s gold resource – which currently sits at $2.6 per ounce – reportedly sits below industry standards, hinting at a potential valuation mismatch. The company also claims to have acquired projects worth $850 million in the depths of the bear market for only $81 million, representing a 10-cents-on-the-dollar deal. 

With the addition of its $100 million portfolio holding in Gold Royalty Corp. GROY, GoldMining believes it is poised to take advantage of a potential “gold rush”.

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