If you believe the old saw about the 'pick and shovel' suppliers making more money than the average gold miners themselves, then GNG is a damn good bet in this modern age. It certainly suits my style of investment as I am after a good dividend flow as well as a strong Balance Sheet and direct exposure to gold miners (Australian based only thanks - sovereign risk elsewhere is too large and volatile these days) just doesn't quite cut it (NST a possible exception). Yet when you look at the investment categories which handle recessionary times (and that's where we are headed, surely) then gold isn't a bad place to be.
So, I've opted for GNG as my default gold play and I'll list the BUY reasons as follows (and a big shout out to Bear77 for his commentary on this company)
(1) GNG specialize in design & construction of gold processing plants in Australia - win most EPC contracts
(2) They have diversity in their income streams
(3) Good pipeline of orders (approx 1 year)
(4) Strong stable management
(5) Huge insider & institution support >90% - though liquidity can/could be a possible downside
(6) no debt
(7) A significant dividend payer - I expect a ff div of 20c to 24c each year over the next 3 years and grossed up that's nothing to be sneezed at against a SP of less than $2
Possible SP catalysts include:
(1) Contract wins to bolster the order book
(2) Pick up in Au price in AUD to stimulate opening up new discoveries - currently AUD $2,643/oz
(3) Stronger analyst support - GNG is really flying below the radar.