Categories: General Market Commentary / Precious Metals
Topics: General Market Commentary / General Precious Metals

You Don’t Have to be Royalty to Own Gold

Last week, we talked about GoldMining Inc.’s (TSX:GOLD)(OTC:GLDLF) plan to spin out a wholly-owned NSR royalty subsidiary called Gold Royalty Corp.

This new publicly-traded company will hold 14 newly created NSR (Net Smelter Return) royalties on the company’s 14-property, 25M ounce gold-focused asset portfolio in the Americas.

The board is quickly coming together with the appointments of two very prestigious mining executives. 

David Garofalo, a former CEO of Goldcorp. (now Newmont), has been appointed chairman & CEO of Gold Royalty Corp. and has also joined GoldMining Inc.’s advisory board.

Warren Gilman, who has served as an advisor to majors such as BHP, Rio Tinto, and Anglo American and who’s been responsible for some of the largest equity financings in Canadian mining history, has joined Gold Royalty Corp.’s board of directors. 

Our regular contributor and Outsider Club founder, Nick Hodge, recently caught up with David Garofalo for his unique perspective on this brand new royalty venture. Here’s a bit of what David had to say:

“...my objective is to grow a standalone team to maximize the value of that Gold Royalty portfolio in whatever form. Eventually through an IPO or a spinout, we're going to maximize value for GoldMining shareholders.”

“GoldMining right now has a 25 million ounce resource base that's trading at about $12 an ounce. So incredibly cheap. This will afford us an opportunity to crystallize some significant value for those shareholders while creating a standalone vehicle.”

“And if you look at the successful royalty companies that exist today, the Francos, the Wheaton Precious Metals, they were all created out of existing mining companies; Franco out of Newmont, Wheaton Precious Metal out of Goldcorp, my old employer. And in both of those cases, they've eclipsed or come close to eclipsing the market cap of their parent companies.”

You can access the full interview by clicking here. 

H.C. Wainwright & Company also commented on the hiring of Mr. Garofalo and has subsequently raised their price-target on GoldMining Inc. shares from C$7.00 per share to C$7.50 per share, stating in part:

“Following the recent creation of its new gold streaming and royalty subsidiary, GoldMining could benefit from a re-rating as royalty companies tend to trade at a premium to producing or exploration firms. This is especially pertinent given the recent hiring of Mr. Garofalo given his wealth of experience in the industry.”

Click here for more information on GoldMining Inc. and Gold Royalty Corp. 

Yours in profits,

Mike Fagan
Editor, Resource Stock Digest

Mike Fagan has mining in his blood. As a teenager he staked countless gold and silver properties in Nevada alongside his dad Brian Fagan, who created the Prospect Generator model that’s still widely used today in the resource space. One of those staking projects was put into production by a major Canadian mining company — a truly rare and profitable experience. That background uniquely qualifies him as a mining stock speculator. One of the most well-known names in the business, Mike is now putting that experience to use for the benefit of Resource Stock Digest and Hard Asset Digest readers.