Valuation Check After CA$50 Million At-the-Market Equity Offering
GoldMining (TSX:GOLD) just moved to strengthen its balance sheet by filing a CA$50 million at-the-market follow-on equity offering and has already completed CA$17.8 million of issuances across multiple price tranches.
See our latest analysis for GoldMining.
The equity raise comes after a strong run, with the share price at CA$1.82 and a year to date share price return of around 52 percent. The 1 year total shareholder return of roughly 57 percent suggests momentum is still building despite some recent pullbacks.
If this kind of funding driven move has your attention, it could be a good moment to explore other opportunities using our screener for fast growing stocks with high insider ownership.
With fresh capital secured and shares already up strongly this year, investors now have to decide whether GoldMining’s improving balance sheet still leaves the stock undervalued or if the market is already pricing in future growth.
GoldMining’s current Price to Book ratio of 2.2 times, set against its CA$1.82 share price, suggests the market is assigning a modest premium to its asset base versus peers.
The price to book multiple compares the market value of the company to the accounting value of its net assets. This metric is particularly relevant for resource stage miners whose value is heavily tied to their project portfolios rather than current earnings.
In GoldMining’s case, that 2.2 times multiple screens as good value relative to both similar companies, with a peer average of 7.2 times, and the broader Canadian metals and mining industry at 2.8 times. This indicates investors are paying less for each dollar of book value than they are for many competitors despite the company’s unprofitable status and lack of meaningful revenue.
Against that backdrop, the discount implied by the multiple points to the market remaining cautious about turning GoldMining’s exploration assets into profitable production, even as it prices the stock more conservatively than many peers in the sector.
See what the numbers say about this price — find out in our valuation breakdown.
Result: Price-to-Book of 2.2x (UNDERVALUED).
However, risks remain, including ongoing losses, execution uncertainty in advancing multiple exploration-stage projects, and potential shareholder dilution from the new at-the-market program.
Find out about the key risks to this GoldMining narrative.
As always, if you see things differently or prefer to base decisions on your own work, you can build a personalized view in just a few minutes: Do it your way.
