Thanks for the great explanation @Bear77. Appreciate the breakdown. Is my understanding correct when I say that the price came back from its year high due to holders taking profits?

I am slightly kicking myself as I happened to check the market during the window when it peaked up 20% on no news and did ponder selling a portion (of course I didn’t and continued to hold). Still not bad though.

Yes @pubenvelope I think that's correct, as GNG is probably not traded too much, because of the lack of liquidity, so most holders are investors who have an idea of where they see value, so if I'm right and it was a mistake made by somebody where they placed a buy order "at market" instead of nominating an upper limit that they were willing to pay, or they used a limit price that was incorrect (too high), which caused the spike up to around that $2.90 level, then you either have people seeing that on their live watchlist or else receiving a notification (price alert) because they've set that up through their online broker, so, unless you had inside information about the liklihood of GNG announcing one or more large new EPC contracts soon, those $2.90 levels look overbought for GNG with their current order book and current forward guidance, so if I was overweight GNG, as in held more than I thought was ideal, then I'd absolutely trim some immediately at those sort of levels if I saw that spike happen, or received an alert that it had occurred. So, as you say, taking profits.

Because there wasn't really a surge in demand, just one mistake and some FOMO orders (they must know something, I better buy some), the bids (buyers) dried up very quickly and that's why the GNG share price came down so much and so fast. Back to close at $2.46, and they've been down to $2.40 today already, currently trading at $2.42, so everything's back to normal now.

In my opinion, I'm a little underweight GNG compared to the weighting that I believe would be ideal, and that is because (as I said here on the day of their AGM), I had reduced my position ahead of their November AGM because of concerns over some of their larger projects falling over, like BHP's decision to put their West Musgrave nickel project on hold and the beneficiation plant for the Yangibana rare earths project for Hastings that GNG were awarded in August last year with Hastings probably now going to go broke after running out of money and being in dispute with their largest lender, Twiggy Forrest's Wyloo Metals. Wyloo will likely end up with full ownership of Yangibana and may choose to defer further development while REO prices remain as low as they are, unless the Federal Government decide to bankroll the project like they have recently done with Iluka's Eneabba REO project. That deal is covered extensively by the MoM crew here: Eneabba: A $2b Disaster in Waiting? WTF... [Mon 9th Dec 2024].

However, as I reported here in my "#2024 AGM and Annual Report" straw a couple of weeks ago, GNG appear to have replaced that work already and are guiding for slightly higher revenue for FY25 than FY24, weighted more to the first half (the half that finishes at the end of this month) so they're not relying on a stronger second half; they are guiding for increased revenue WITHOUT a stronger second half. That means that any new contracts GNG are awarded that result in revenue in H2 could produce even better results than their current guidance.

Source: GNG's 2024 AGM Presentation [27-Nov-2024]

So, I'm now in a position where I've trimmed my GNG position at lower levels last month (ahead of their AGM) and now want to accumulate more, however I had previously accumulated most of my GNG shares at below $2, and I'd rather buy more below $2.20 where I think there is value than up at $2.40 or above where they are now. I certainly wasn't buying yesterday, and I wasn't selling any either because I already feel I am underweight GNG considering they're one of my 5 favourite companies to own shares in (Lycopodium is still #1 for me, and GNG move around between #2 and #5 depending on how I'm feeling about the others at the time).

I would like to see LYL acquire GNG, but it would have to be done via an off-market takeover offer, not done on-market, because of the huge insider ownership of GNG which means there's a reduced free float, so not a lot of shares for sale at any given time; 55% of the company is owned by the founders and directors and their families.

Source: GNG's 2024 AGM Presentation [27-Nov-2024]

Anyway, they're my current thoughts on GNG and what probably happened yesterday @pubenvelope. Hope that helps a bit.

That absolutely helps @Bear77, always love your deep dives. Reading and discussing these things with you definitely increases my understanding. What really excites me about GNG is their consistent track record of securing and delivering quality EPC contracts—especially in energy and resources—which gives me confidence in their ability to navigate challenges. That space (energy and resources) can be difficult to make profits on, I've seen many contractors take a loss on projects I've been on. I have a small parcel at $1.75 and will accumulate more if it dips back toward $2, although I don't know how likely that will be. Cheers!

Just a small point @pubenvelope - With Energy, that's GNG's annual recurring revenue (ARR) division, mostly through multi-year operations and maintenance contracts for energy assets such as well heads and offshore floating platforms, for large and small energy sector players (i.e. the owners of those assets), so that's not EPC, which is Engineering, Procurement and Construction. Most of GNG's revenue does come via EPC contracts through their larger GR Engineering division, which is almost all for the mining and minerals processing sectors, with gold and copper being a specialty for GNG (as it also is for LYL).

Both GNG and LYL do dozens of studies every year, starting with scoping studies, which often lead to pre-feasibility studies (PFS) which then often lead to Definitive Feasibility Studies (DFS), which many are now just calling Feasibility Studies (they're dropping the "D"). Those final studies - the FS or DFS - also previously known as BFS - Bankable Feasibility Studies - are what informs the FID - or Final Investment Decision - because the FS (/DFS/BFS) contains all of the necessary information to make a decision whether to proceed with the project (fund it) or not.

Both GNG and LYL (GNG mostly in Australia, LYL mostly overseas) get paid well for completing these studies regardless of whether the projects ultimately get green lighted (positive FIDs) or not, but when a project DOES get a green light from the owners and they get the funding sorted, the company that has completed the studies has the inside running to get the EPC contract because they already know the project inside out from completing the studies.

Not every company that does these studies also has engineering and construction capabilities, but both GNG & LYL do, and those EPC contracts are where they make most of their money. That's why the levels of studies they are working on, and the metals / minerals / sectors that those studies are focused on, can give us a reasonably good idea of their future pipeline of EPC work. It's not a linear relationship because (a) not all projects get built, and (b) GNG and LYL don't always get the contracts to build them, but when they have bugger-all studies happening, that's generally not good in terms of not boding well for their future levels of EPC work. At the moment they have plenty of studies ongoing, so it is good.

So EPC can also be thought of as the design of the processing facility (engineering), sourcing of materials required for the build, including pre-fabricated and pre-built items, like ball mills, sometimes tanks (unless they're going to be built on-site), large steel pipes (of various types and angles), walkways, stairways, pumps, etc. (procurement), and then building it all (construction).

If they tack an "M" on the end (EPCM), it also involves Managing the entire project. Lycopodium often do EPCM contracts, and sometimes EPM contracts where they leave the actual Construction to another company, such as an in-country construction company when operating in countries where that makes sense to do, or is a requirement of the client or the government of the country. EPM contracts are sometimes called EP & PM contracts which means Engineering, Construction & Project Management. In this game there seems to be a few different names for the same thing (like a BFS and a DFS).

Anyway, point is GNG's Energy division tend to be awarded multi-year maintenance or operations-and-maintenance contracts for Energy (Oil and Gas) companies (ARR), and their Engineering division lands the EPC contracts - which is usually lumpy revenue because it tends to mostly be one-off contracts, but it's all good; the main thing is they're keeping busy.