Maiden Resource for Yarumalito Project; Resource Growth

Potential; Advancing Technical Report; Reiterate Buy; PT Higher

On May 5, 2020, GoldMining announced a maiden mineral resource estimate for its Yarumalito project in Colombia. The resource includes a pit constrained Inferred resource of 66.3M tonnes, at an average gold grade of 0.58 grams per tonne (gpt), for a total of 1.2M ounces (oz) of gold. The site also has 129.3M pounds of copper based on an average grade of 0.09%. This equates to an average gold equivalent (AuEq) grade of 0.70 gpt for a total of 1.5M AuEq oz. We highlight that the resource at site was defined from 50 historic diamond drill holes totaling 16,635 meters.

Nearby infrastructure within robust gold belt. Yarumalito lies roughly 75 kilometers (km) southwest of Medellin in Central Colombia. We highlight that the site is accessible by paved roads and also has nearby high-capacity power lines, water, and labor. The Yarumalito project sits on the same Mid Cauca gold belt that hosts other advanced-stage gold deposits currently owned by B2Gold (BTG; not rated), Anglogold Ashanti (AU; not rated), and Zijin Mining (2899.HK; not rated). Notably, Yarumalito is the firm’s third acquisition in the Mid Cauca Belt, and is located about 40 km south of GoldMining’s La Mina project. We provide more details on Yarumalito in our November 5, 2019, note, Acquisition of Yarumalito Project in Colombia Further Consolidating Disctrict-Scale Land Package; Reiterate Buy.

Future exploration to grow resource base for new technical report. Going forward, the firm plans to delineate the high-grade epithermal veins, as well as expand and upgrade the gold-copper porphyry mineralization at site, which remain open along strike and at depth. Notably, historic drilling intersected several high-grade, precious metal- rich epithermal veins with base-metal signatures, as evident in drill hole YAR-11 that intersected 33.75 gpt gold over 1.85 m. GoldMining has already engaged an independent qualified person to complete a technical report on the project, which should also verify historic drilling, and likely yield more clarity on the economic potential of the site.

We reiterate our Buy rating while raising our PT on GoldMining to C$6.50 per share from C$6.25 per share. Our higher price target is the result of revising our valuation for the Yarumalito project. In short, we now value the asset at $8/oz for Inferred resources, which compares favorably to its acquisition cost. Our valuation remains based on a DCF of operations at São Jorge, utilizing an unchanged 10% discount rate. We add in-situ value to the firm’s other advanced assets, including Whistler, Titiribi, and La Mina, at $20/oz for Indicated resources and

$8-10/oz for Inferred resources. We value Measured and Indicated gold resources at Yellowknife at $25/oz, with Inferred gold resources valued at $10/oz to account for the site’s slightly more favorable geopolitical location. We believe GoldMining’s strategy of focused acquisitions should create value for shareholders going forward given rising gold prices and declining reserves in a time of fewer global discoveries.

Risks. (1) Gold price risk; (2) operating and technical risk; (3) financing risk; and (4) political risk.

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H.C. WAINWRIGHT & CO, LLC RATING SYSTEM: H.C. Wainwright employs a three tier rating system for evaluating both the potential return and risk associated with owning common equity shares of rated firms. The expected return of any given equity is measured on a RELATIVE basis of other companies in the same sector. The price objective is calculated to estimate the potential movements in price that a given equity could reach provided certain targets are met over a defined time horizon. Price objectives are subject to external factors including industry events and market volatility.


Market Outperform (Buy): The common stock of the company is expected to outperform a passive index comprised of all the common stock of companies within the same sector.

Market Perform (Neutral): The common stock of the company is expected to mimic the performance of a passive index comprised of all the common stock of companies within the same sector.

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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 April 30, 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 knows or has reason to know of any other material conflict of interest 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.

Legal Notice:

Please click here for GOLDMining‘s press release dated May 5, 2020 for further information on their recently announced resource estimate for their Yarumalito project and its annual information form for the year ended November 30, 2019 and project technical reports for important information on each above project and estimate.

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