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Nick Hodge: Hi, I'm Nick Hodge. I'm sitting here in the Coal Harbour Room of the Pan Pacific in Vancouver with Amir Adnani, the Chairman of GoldMining Inc (TSX-V: GOLD). Amir, you know it's funny, we met a couple of year ago just down the street at another hotel here and your company wasn't even called GoldMining then, it was called Brazil Resources Inc.

Amir Adnani: I remember that meeting.

Nick Hodge: Quite a lot has changed since then. You've expanded beyond Brazil, both northward and southward as you continue to execute on your strategy of accumulating ounces of gold and other minerals in the ground. And I thought it was time for an update, to sit down and see how the strategy's been going because it's been paying off quite well. So can you tell me more about how you're executing this land banking strategy?

Amir Adnani: It's one where you have to be disciplined and you have to also sometimes be able to educate and explain to investors how this type of strategy creates value, creates value for shareholders. I was recently traveling and I almost had to remind an audience, a room full of investors that I was presenting to about the company, that sometimes they are the reason or the demise of some of the companies that we're buying at the bottom of the cycle, because investors in the junior resource sector have become so accustomed to believing that the only way to create value is to punch holes in the ground. Well when we have a bear market and you take a dollar off of your balance sheet and put it into the ground, whether you get good results or not, even if you get stellar results, if the market is not in the right mood because sentiment is weak, you're not going to get the right reward felt in your share price. You're not going to be able to raise money at progressively higher levels.

You're diluting and you can really destroy value and destroy great deposits by doing this in bear markets. What we wanted to do was take advantage of this dynamic in the resource market, going back over six years ago, or almost seven years now with GoldMining, where when you see this predictable downturn, the markets are so predictably cyclical when it comes to commodities, right? Over 20 years we see the bull markets, bear markets, bull market, bear market. So the bottom of the cycle, when you're at bear market territory, mathematically you can acquire drilling that has been done for a fraction of what it costs to go drill a new hole. You can buy a resource in the ground for a fraction of what the same resource would be worth if the market was in bull market territory.

So in a way this is really not a new concept, many people before us have implemented this model successfully. You look at companies like Silver Standard, even Randgold was founded on the back of buying assets at the bottom of the cycle and then building those assets out. Silver Standard did the same thing. Lumina Copper. Some of the biggest names in the resource sector have recognized the benefit, to take advantage of the cycles to create shareholder value. To get back to your point, the Brazil focus for us was initially important because you also just can't go out there and buy things randomly. There has to be a focus on specific jurisdictions and after seven years we've managed to now have established ourselves in northern Brazil in Para State, and the central cocoa belt in Colombia, in Alaska.

In every area we've created large district scale opportunities. It doesn't happen overnight but you need one thing to go in your favor to make this kind of model a reality, a prolonged bear market. We've had a prolonged bear market since 2012, when the TSX Ventures started to break down and the gold prices started to break out. Since 2012, in the last seven years we've had probably, what six good months last year? Between the Brexit event and Trump's victory. Six good months in a context of seven years. That's the ideal environment that we needed to have at GoldMining to execute the kind of strategy that we're talking about.

Nick Hodge: Well so many people are fearful during times like that, you know they're frozen, they're deer in headlights, they don't want to act. You've been contrarian in that respect and you've done really well in executing these acquisitions at a time when no one is looking, right? Investors are fearful, the idea is to buy low and sell high but often human psychology just makes us do the opposite of that. How have you been able to gut check yourself or how have you been able to say, you know, now is the time to buy, we can do this with minimal dilution, we can head in here while asset prices are cheap. How do you gut check yourself for that?

Amir Adnani: Well first of all, I've seen the strategy play out in the uranium sector as you know with Uranium Energy Corp, where I've spent the last 12 years developing. We've had even a longer, harder bear market in uranium. And in 2010 for example right before the run up in uranium prices we managed to acquire, at the bottom of the cycle in uranium prices, assets from Uranium One, a big player back then that helped transform us into a producer. And we were able to buy, again for cents on the dollar, assets that allowed us to join the exclusive club of uranium producers. So, I've seen firsthand what it can do in terms of value creation in the resource market, when you do buy at the bottom of the cycle. In the resource business, I feel, more than any other business, depending on what you pay for an asset you can either destroy a lot of value or create a lot of value.

So part of the gut check has really been having seen and lived through another commodity with another company, and executing that. By the way, we're still executing that with UEC, because as you know we've had a real prolonged bear market in the nuclear side. Maybe to some extent it is also about aligning yourself, so a part of the gut check isn't just your own team and your own board, and having like-minded people as the team but having like-minded people in terms of the stakeholders. So you look at some of the long term backers that we've had at GoldMining, people like Rick Rule and Sprott Asset Management. People like Marin Katusa and Doug Casey, other large institutional investors throughout the world that over the years we have laid out our vision and our strategy to them, but then we've gone and executed.

We've managed to demonstrate through the combination of vision and execution, vision and execution and this snowball effect of building a larger critical mass and today having one of the largest resource spaces throughout the Americas for any pre-production company. It's that alignment with like-minded stakeholders and large stakeholders who get you to a point where I think you have the right platform to be able to carry on and that to us have been a very important part of this whole strategy. The shareholder base, the asset base and then sort of having that commitment, and that vision to just be very disciplined. To keep taking advantage of the last thing, being the cycle. If you have that sort of long term cycle, as I've talked about, then all the stars align and you can really take advantage of this concept.

Nick Hodge: So you talk about creating value for shareholders by buying at the bottom of the cycle or the bottom of the market. Clearly the strategy has paid off if you look at your stock performance over time, compared to some of its peers or to some of its benchmarks, like the GDXJ ETF. You've clearly outperformed, can you speak to that?

Amir Adnani: Well after having been a public company now for six years it really does become an interesting case study almost, to put our share price performance next to some of the indices that you've talked about and just say, well look Amir keeps talking about this acquisition model, well how does it work out? How does it translate to share price performance? Today if you look at our share price performance from our IPO in the middle of 2011 to now, we have outperformed the TSX Venture, which is a very good barometer of how we function as a junior resource company. The GDXJ as a junior gold ETF, even the S&P 500, and that's a remarkable concept to think about, after such an extended period of time. But more importantly between 2012 and 2015, when the TSX Venture lost almost 90% of its value, our shares were practically flat during that time.

Nick Hodge: That's great.

Amir Adnani: Last year, as you know very well, when the market did take off, we outperformed. We were the second best performing stock, or mining stock, on the TSX Venture and made the TSX 50 List. So we've demonstrated that we have quite a bit of downside protection when things are bad and we're making accretive acquisitions as opposed to dilutive ones and when the market turns around there's so much leverage with the size of resource that we've accumulated now that you see that immediate outperformance on the way up. So, look it's an exciting concept. We have a lot of money as insiders tied up in this company ourselves. Insiders in GoldMining today still own close to 25% of the company, which is again very meaningful. So we feel very passionate about the vision and the model, we've been at it for seven years. We have a lot of our own capital tied up and it's an exciting time. It's exciting to have that window still be open, to continue to grow the business.

Nick Hodge: It certainly is an exciting time. We just talked about the outperformance. The market rewards execution, right? You’ve laid out a strategy, you’ve executed on that strategy with minimal dilution, and you’ve done so, quite frankly, at a rapid pace.

Just in the past couple of months here, you've made some acquisitions that I've covered and I've written about. The first is one down in Colombia. You were able to consolidate the Mid Cauca Belt by acquiring Bellhaven and their La Mina Project, which is one of the highest grade projects down there. You've also got the management team that came with it. Can you explain to me more about why you made that acquisition and why the addition of Bellhaven's management team to your team is so valuable?

Amir Adnani: Well, part of what we wanted to accomplish in Colombia was very much the same kind of strategy that we had in Brazil. We went into Brazil and it started with having local partners and the understanding of a specific area within Brazil in Pará state where we were able to just put together four different projects with 43-101 resources and build a strong portfolio there. In Colombia, it was the same thing. It was leveraging our partner in South America, Brazilinvest, the oldest investment bank and investment house in Latin America with investments in Brazil and Colombia. One of our board members lives in Colombia. In addition to having a strategic financial partner, having some in-country know-how, we felt it was a jurisdiction we wanted to make a real move in.

Next came identifying opportunities where it wasn't just going to be one acquisition but that a sequence of acquisitions can create a district. So, we have to go back and look at the acquisition we made late last year of the Titiribi Project, which gave us our first kind of toehold into Colombia, into the Central Cauca Belt. And now with the acquisition of Bellhaven, we have created really one of the largest district plays in central Colombia, in this very exciting gold-copper porphyry belt, the Mid Cauca Belt. I say it's exciting and I've got proof that demonstrates that other companies as big as Newmont thinks it's exciting. Just in the last few weeks, Newmont has now invested a substantial amount of money over a hundred million dollars into Continental Gold.

AngloGold Ashanti has two or three different development stage projects in this area. IAMGOLD has entered into various exploration projects here. IAMGOLD now becomes a shareholder of our company because they were a shareholder of Bellhaven. So, I love the fact that there's real regional activity in this Mid Cauca Belt and that we now have as a result of our two acquisitions consolidated what becomes one of the largest district plays in central Colombia, where we have two different 43-101 reports totalling almost 12 million ounces of gold-equivalent resources in all categories and 10 different drill-ready prospects within our land package that we can follow up on and we plan to follow up on.

You look at some of the people that also join us as a result of this acquisition of Bellhaven. The CEO of the company, Dr. Paul Zweng, who is the Head of Exploration for BHP Billiton in South America, sold his last junior resource companies for over a billion dollars of value. So, this is a real proven individual. He becomes a member of our technical advisory board moving forward and one of our largest shareholders moving forward. We mentioned IAMGOLD. So, this checks many boxes. It enhances and unlocks value for a previous acquisition in Titiribi. It creates a leading district play in the central Colombia belt. You look at the acquisition, the total acquisition cost of Titiribi and Bellhaven has happened now for less than $30 million dollars in stock. Bellhaven and Sunward Resources, the two companies that we acquired ...

Nick Hodge: That's right.

Amir Adnani: ... were public companies in 2012 at $1500 or $1600 dollar gold. Their combined market cap was over $400 million dollars.

Nick Hodge: You're able to get it for ...

Amir Adnani: Less than $30 million dollars in stock. So, that's the kind of difference we're talking about that it's the same project, same geology, same rocks, but at $200 or $300 difference in the gold price, hence the cycle can create that much of a gap in delta and the value of the asset. I love being able to do deals like this. I don't think there's any other industry in the world where you can get that much of a difference in valuation just because of a $200 or $300 difference in the underlying commodity price.

Nick Hodge: Well, you've certainly been able to capitalize on it and you mentioned the 43-101 reports. La Mina came with over one million ounces indicated, but there's even more that you get with that because there's potential exploration upside. So, there's various deposits and zones that they have, but one called  La Garrucha has hardly been explored. There've been a couple holes that returned mineralization, but that provides something for you to really sink your teeth into going forward.

Amir Adnani: It'll definitely be an exciting catalyst for us as one where we typically don't like to go and spend money at this point in the cycle to prove up resources. We’d rather buy them, but this is an exception. The six last holes drilled there in 2013 before the company ran out of money, Bellhaven, with stellar results. I mean, you're talking about 270 meters of over one gram per tonne gold and 0.13% copper. I mean, stellar, stellar results that you would want to follow up on. We feel confident this would be an area at La Garrucha that with some minimal exploration expenditures, we'll be able to establish a maiden resource there. We'll see, but these are the types of things that as we assess our portfolio and we have a very extensive portfolio now.

From time to time, we'll be able to allocate a bit of cash to enhance and increase resources organically. With $20 million of cash on hand, no debt, we definitely also have the balance sheet where from time to time, we can spend again a million or a million and a half dollars on a drilling program to prove up resources quickly. So, both options are there.

Nick Hodge: Speaking of extensive resource portfolio, by the way, almost a month after you acquired La Mina in Colombia, you were out with more news that you're expanding your territorial reach. You came out with these Northwest Territories acquisitions with Yellowknife and Big Sky. What was the thinking behind that one?

Amir Adnani: Well, Canada, especially Canada's north has been on our radar screen for a long time. You look at the amount of money going into Canada's north between Yukon, Nunavut, and Northwest Territories, but ...

Nick Hodge: The acquisitions of Kaminak...

Amir Adnani: Kaminak with Goldcorp, Agnico Eagle has committed over a billion dollars to Canada's north in terms of their capital expenditure program. So, we knew we wanted to get into this area. We just needed the right opportunity and we found the right opportunity. These projects that we have acquired there come with over 200,000 meters of diamond drilling. You just think about the replacement value ...

Nick Hodge: And how much that costs, sure.

Amir Adnani: We're picking it up for basically four million shares in our company and that's less than 4% dilution. So, it's quite exciting. It's nice toehold into Canada's north and to Canada as a region. The low-holding cost, geopolitically stable. Again, at a time when there's increasing interest in this region by majors and junior companies as well. So, we'll have more news as well about this latest news and acquisition of these projects in the Northwest Territories. I expect over the next six months there should be quite a bit of active news flow pipeline from the combination in using Colombia with the follow-up work we're going to do with the Bellhaven acquisition, the work that we're doing with our latest acquisition in Canada.

And perhaps, new exciting acquisitions as the gold price continues to linger below $1300 or so, that gives us a fantastic window to find the types of deals that we've done. We got a six or seven-year track record now that shows we get deals done and we've been executing on the vision and the resource space keeps getting bigger. And our total global resource is over 11 million ounces gold equivalent in measured and indicated and 13 million ounces inferred. That's a big portfolio.

Nick Hodge: You've got 24 million ounces of gold equivalent.

Amir Adnani: That's a resource space that can go up next to any company that is in the sort of mid-tier pre-production junior space. It's definitely one of the biggest portfolios in the Americas. The vision was to create a powerhouse and we're definitely on our way. We're building a very a substantial company here.

Nick Hodge: You've got 24 million ounces of hold equivalent. You've got catalysts ahead with looking at the reports of potentially drilling La  Garrucha and as you just alluded to, perhaps even more acquisitions in the near term as you continue to execute on this land-banking strategy. So, Amir, congratulations to you and congratulations to your team at GoldMining Inc., and obviously to shareholders who have been along for the ride. It's been fantastic. Thanks for taking a couple minutes to update us today.

Amir Adnani: I appreciate it, Nick. I look forward to connecting with you again soon.

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MARKET SUMMARY

INDICES

Name Last Change
DOW 24491.90 0.28%
S&P 500 2629.63 0.31%
NASDAQ 7051.37 0.44%
TSX 14675.73 0.36%
TSX-V 564.39 0.00%

Resource Commodities

Name Last Change
Gold 1241.60 0.21%
Silver 14.55 0.21%
Copper 2.72 0.040
Platinum 784.00 0.45%
Oil 51.00 3.16%
Natural Gas 4.55 1.25%
Uranium 28.75 0.86%
Zinc 1.21 0.00%

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