Discl: Held IRL 1.08%
Nice GNG O&M accouncement!
- $57m over 5 years, option to extend for 3 years - this is a bit more than half the contract life of the 15 year Gas Sale Agreement with the NT Government (see below)
- Adds ~$11.5m to annual Oil & Gas recurring revenue, from a base of ~$96m, so about ~10%
- Looks like a follow on from GNG’s involvement in the Operational Readiness phase of the Facility to establish operating capability - the EPC contractor for the facility was Enscope, so GNG’s role looks relatively small but enough to convince SPCF of its capability for the full run of the Facility - this looks like the classic GNG playbook at play in the O&M space.
Adding more info on the Sturt Compression Facility itself from my newest buddy, Claude, which was helpful in putting the contract win in perspective, and as part of my continuing education of GNG’s operations:
What the Sturt Plateau Compression Facility Does
The SPCF is the central gas processing and compression hub for Tamboran Resources' Shenandoah South Pilot Project in the Beetaloo Basin, Northern Territory — located approximately 50km south of Daly Waters in the Roper Gulf Region. Its job is to take raw gas from the wellfield and prepare it for export into the national pipeline network.
In technical terms, a compression facility like the SPCF performs three core functions:
1. Gas gathering and separation. Raw gas arriving from the Shenandoah South wells contains water, liquids and other impurities. The facility separates these out, producing a clean, dry gas stream suitable for pipeline transmission. The equipment — sourced from Canada, Malaysia and China — includes separators, dehydration units and associated process equipment typical of a shale gas gathering facility.
2. Compression. Gas from unconventional shale wells (like those in the Beetaloo) arrives at relatively low pressure. The facility boosts the gas to the high pressure required for injection into the Amadeus Gas Pipeline (AGP). The SPP pipeline that carries gas away from the facility operates at a maximum pressure of 9.6 megapascals, so the SPCF must compress the gas to that level before handoff.
3. Metering and custody transfer. The facility measures the gas volume and quality at the point where it passes from Tamboran's ownership into the pipeline system — the commercial handover point under the gas sales agreement.
The facility in numbers
The SPCF is designed to supply an initial 40 MMcf/d (million cubic feet per day) to the Northern Territory Government under a gas sales agreement running to mid-2041, with capacity to handle up to 60 TJ per day of appraisal gas from the Shenandoah South Pilot Project. At a cost of A$140 million, it is a substantial piece of midstream infrastructure. Tamboran and its JV partner Daly Waters Energy are also progressing concept studies to evaluate a potential expansion of the SPCF to up to 100 terajoules per day, subject to appraisal success. Falcon Oil & Gas + 2
Where it sits in the Value Chain
The SPCF is the critical link between the upstream wellfield and the downstream pipeline. Gas flows from the Shenandoah South wells → into the SPCF for processing and compression → then through the 37km Sturt Plateau Pipeline built by APA Group → and into APA's Amadeus Gas Pipeline, which supplies Darwin, Alice Springs and regional NT centres. Approximately 88% of electricity generated in the Northern Territory comes from gas-fired power generation, and around 60% of the NT's gas supply from 2026 is forecast to come from Tamboran's first pilot development. The SPCF is therefore not just a piece of engineering infrastructure — it is the enabling facility for a significant portion of the Territory's energy security. Nt
Why this matters for GNG's O&M contract (Claude)
The SPCF is a long-life, always-on facility. Once commissioned (Q3 2026 target), it will need continuous operations and maintenance support for the full 15+ year term of the NT Government gas sales agreement. This is exactly the type of work that GNG's subsidiary GRPS specialises in — onshore gas facility operations, rotating equipment maintenance, shutdown management and advisory services. It is analogous in structure to GNG's Santos and Inpex O&M relationships, which have similarly been multi-year, recurring contracts at long-lived gas facilities.
Discl: Held IRL 1.08%
FINANCIAL TRENDS
Final part of the GNG Deep Dive. This part shows GNG's financial trend charts going back to FY2023. I have significantly more confidence in the outputs from Claude having fed it with a cleaned-up Contract List starting from FY21 (as the revenue from these contracts shows up in FY23).
The intent is to make sense of the rather lumpy GNG revenue and earnings trend, something that bothered me. My companies typically have clear revenue and earnings growth over time, so this was entering new ground for me.
SEGMENT REVENUE
Revenue is lumpy and cyclical - GNG is a backlog-driven EPC business with lumpy revenue recognition
- Mineral Processing = EPC project timing
- Revenue dips are NOT demand issues — they are project phasing issues
Oil & Gas GPRS = recurring stabiliser
- Much smaller base (~$20–50m per half)
- Trend: steady growth + stabilisation
Period-By-Period Analysis of Revenue
1HFY23 revenue $332m (Pre-2023 cohort, WM not yet started) - Peak
Thunderbird ($179.5m), Cosmos ($76m), Abra ($90m), Thunderbox ($101m), Norseman ($57.2m), Mt Ida ($73m) and Bellevue all executing simultaneously — but all in early-to-mid procurement phase.
Aggregate procurement spend compresses EBITDA margin to 6.2% in 1HFY23 despite revenue hitting its highest point.
Revenue and margin diverge maximally at this point.
2HFY23 to $219m (Pre-2023 cohort winding, WM just starting) - Dip
Thunderbox and Norseman closed September 2022, Abra March 2023, Mt Ida April 2023.
West Musgrave started April 2023 but only 3 months of early procurement billing in the half.
Revenue fell 34% HoH.
Margin recovered sharply to 10.8% as the procurement-heavy cohort cleared.
1HFY24 $187m (Double Transition, WM mid-ramp) - Trough
Thunderbird, Cosmos and Bellevue all winding to their October–December 2023 end dates — tail billing only.
Mungari (Sep 2023), K92 PNG (Dec 2023) and Kathleen Valley (Dec 2023) all starting within one quarter — procurement phase only.
West Musgrave mid-execution but not yet at peak.
Seven contracts nominally active, lowest revenue ($187m) in the dataset.
Margin at 12.1% because the residual revenue is predominantly mid-cycle WM plus O&G annuity — not reflecting operational strength, just composition.
2HFY24 $237m then 1HFY25 $272m (WM peak + new cohort ramping) - Recovery
West Musgrave reaches peak construction billing through FY24 (confirmed: no FY24 revenue/EBITDA impact per ASX release).
Mungari, K92 PNG and Kathleen Valley move from procurement into concurrent full construction.
Four significant projects simultaneously at high-milestone billing.
Cash surges to $111.8m.
EBITDA margin 12.7% — the new cohort demonstrably better managed than the equivalent prior cycle.
2HFY25 $207m (West Musgrave goes to zero — the confirmed driver) - Dip
West Musgrave: transition July–September 2024, suspended October, handover December 2024. Zero revenue from January 2025.
Simultaneously, Mungari and K92 PNG close March 2025, Woodlawn closes April 2025. KOTH Stage 1+2 (started January 2025) and Eloise (started June 2025) in procurement.
This is GNG's largest single-period revenue headwind: WM suspension ($80m FY25 shortfall), cohort close-outs, and new-cohort procurement all hitting the same half.
Revenue falls to $207m.
The 11.0% EBITDA margin held under these conditions is a genuine indicator of operational resilience.
FY25 result is materially stronger than it looks — WM shortfall masks underlying growth
FY25 revenue of $479m was achieved despite absorbing up to $80m in lost West Musgrave billings due to BHP's suspension.
Stripping WM out, the underlying contract portfolio — Mungari, K92 PNG, Kathleen Valley, Woodlawn, oil & gas — was running at a revenue rate approaching $560m annually.
That GNG still grew 13% YoY and expanded EBITDA margins is a meaningful quality signal about the robustness of its current execution capability.
1HFY26 $218m — the first genuinely WM-free half
Revenue of $218m with zero West Musgrave is a cleaner base than it looks.
KOTH Stage 1+2 ($154m combined) and Eloise ($77.6m) are moving through construction.
SO4 Potash contributing.
The oil & gas annuity floor (~$48m) holds steady.
EBITDA margin at 12.8% — the highest in the dataset.
The underlying portfolio is outperforming prior cycles on profitability even at lower revenue.
2HFY26/FY27 (the new megacluster building) - Next Peak
Lower Hill ($225m), Laverton ($115m) and Northparkes ($68m) awarded within six weeks in early 2026. These will mobilise through 2HFY26 and enter full construction in 1HFY27.
Layered on KOTH Stage 1+2 and Eloise still running through November 2026 and October 2026 respectively, GNG has the ingredients for its largest ever concurrent backlog — potentially $550–600m+ in simultaneous construction.
Critically, this cluster is gold and copper dominated, both in strong commodity price environments, making suspension risk substantially lower than West Musgrave faced.
With demonstrated 12–13% EBITDA margins in the current cycle, a comparable revenue level to FY23 ($550m+) could generate materially higher absolute EBITDA than that cycle did at 6–10% margins.
Key Pattern from All Spikes & Dips
Across all periods: Revenue = number of projects in peak construction phase at the same time
Contract count is a misleading near-term revenue indicator — phase is what matters
1HFY24 had seven active EPC contracts and ~$874m in gross backlog but printed the lowest revenue in the dataset ($187m).
2HFY25 had eight active EPC contracts but only $207m revenue.
In both cases, the majority of contracts were at non-peak phases simultaneously — either winding down or just starting.
Investors should map each contract's start date against its implied execution phase, not just count active contracts.
PROFITABILITY
EPC phase determines margin — revenue and margin do not peak together
The single most important relationship in the data: early-stage EPC (procurement, mobilisation) generates revenue but suppresses margin. Late-stage EPC (construction, commissioning) generates both revenue and margin.
The 1HFY23 revenue peak of $332m at 6.2% EBITDA margin — driven by a large cohort all in procurement simultaneously — is the clearest demonstration.
Conversely, 1HFY26's $218m at 12.8% margin shows a mid-construction portfolio maximising profitability per dollar of revenue. An investor watching revenue alone will consistently misread GNG's earnings quality.
EBITDA / NPAT trend: Generally rising trend into FY25 bt volatile half-to-half
EBITDA margins: Improving: ~6–9% → ~11–13%
- Margins are structurally improving despite revenue volatility. This validates (1) Brownfield mix increasing (2) repeat customers (3) better project selection
- Earnings volatility is mix + timing driven, not structural margin erosion
2HFY25 margin at 11.0% is resilient, not weak — given WM headwind
The slight margin dip from 12.7% in 1HFY25 to 11.0% in 2HFY25 previously looked puzzling alongside declining revenue.
It now makes sense: West Musgrave, which was likely mid-margin (construction phase), disappeared from the denominator in October 2024.
The remaining revenue was predominantly new-cohort procurement (lower margin) plus oil & gas annuity.
An 11% EBITDA margin while absorbing the full WM exit and funding three new contract ramp-ups simultaneously is a strong outcome.
Margin improvement across cycles is the most important trend in the financial data
EBITDA margins have risen from 6.2% at the peak of the prior revenue cycle (1HFY23) to 12.8% at the equivalent point in the current cycle (1HFY26).
This is not simply a mix effect — it reflects genuine operational improvement: better contract selection, more disciplined procurement, improved project execution and less margin leakage on large contracts.
The pre-2023 cohort (seven concurrent contracts) appears to have been managed with less margin efficiency than the current cohort of comparable scale.
Each successive cycle is demonstrating structural margin improvement.
CASH POSITION
Cash cycle is mechanically predictable from contract milestones
GNG invoices progressively against construction milestones.
Cash builds when multiple projects are in concurrent mid-to-late construction (peak milestone billing).
Cash depletes when GNG is funding procurement for new-starts while tail-billing on completing projects.
The 1HFY24 cash trough ($58.4m) and 1HFY25 cash peak ($111.8m) are separated by exactly one EPC cycle — the same contracts moving from procurement to construction.
This predictability is an analytical advantage for forward-looking modelling.
EARNINGS PER SHARE
Key pattern: Strong halves are followed by weaker halves → mean reversion pattern
EPS is simply reflecting revenue and margin timing
Growth trend over time, CAGR ~6.6% , but uneven path
GNG is a cyclical grower, not a smooth compounder
Discl: Held IRL 1.08%
UPDATED CONTRACTS REVIEW
Following pointed feedback, a smack from @Bear77 and incorect analysis/outputs from Claude on the financial charts (see next post), I needed to rework the Contracts List. The incorrect analysis was driven by gaps in my original Contract List which are critical to understanding GNG's financials in and from FY23 onwards.
Took the following actions on the Contracts List:
- Deleted the contracts that never progressed - Yangibana in particular
- Reviewed each of the Half-Year reports starting from 1HFY2023, noted the projects which were completed in that half, then used the GNG Projects page on their website to identify the start and end date of each of the projects - this resulted in adding to the list, projects which were won and announced throughout CY2021 - this now provided the context to make sense of the financial numbers, starting with FY2023
- Fed the 12 Jul 2024 announcement: Market Update - West Musgrave Project into Claude and asked it to review and revise all comments
- Fed the updated Contracts List and the trend graphs into Claude to get insights on the trends
I decided to give Claude a go instead of Chat. Was very impressed with Claude - sharper insights, better clarity and just classy presentation vs Chat's bullet-point, grunt like outputs.
Have had to do the usual curating of Claude outputs and cross-check with the financial trend charts, to get it to the points below. The key learning is that I have to provide a fact based input of base data, in this case, the contracts data, for there to be meaningful and trustable output from Claude. Getting the base data wrong results in rubbish thereafter.
GNG Updated Contracts List Feb 2021 to Apr 2026.pdf
UPDATED CONTRACT INSIGHTS
Contract model: EPC dominates, O&M provides the floor
Approximately 75% of contracts by count are fixed-price EPC (Engineering, Procurement, Construction).
This is deliberate — EPC commands better margins at peak execution than time-and-materials work, though it compresses margins during early procurement phases.
The three Santos and Inpex O&M contracts ($86m combined over their base terms) play a structurally different role: they are annuity-style recurring revenue (~$48m/half) that provides a predictable earnings floor regardless of the EPC project cycle.
Oil & gas never dips and never spikes — it is GNG's shock absorber.
Gold is the dominant and growing mineral (9 of 22 contracts)
Gold has been GNG's most consistent source of work across both cycles.
The Goldfields/Leonora corridor (Mungari, King of the Hills Stage 1+2, Black Swan, Tower Hill, Laverton) shows exceptional geographic concentration, reducing mobilisation costs and enabling repeat-client relationships.
Evolution Mining appears twice (Mungari, Northparkes), Vault Minerals twice (KOTH Stage 1+2), and Northern Star once (Thunderbox).
The gold backlog entering FY26 — Tower Hill $225m, Laverton $115m, KOTH Stage 1+2 ongoing — is the largest gold-weighted position GNG has held. With gold near all-time highs in 2025–26, client willingness to proceed is high and suspension risk is low — the opposite of the West Musgrave situation.
This is the most favourable commodity backdrop GNG has operated in for its gold-heavy order book.
Copper re-emerging as a meaningful second theme
Copper-related contracts (Northparkes $68m, Eloise $77.6m, Woodlawn $25.7m, West Musgrave had a copper-nickel component) represent the second-largest mineral category by recent award count.
This aligns with the structural copper demand narrative from electrification.
Importantly, these are operating-mine expansions rather than greenfield projects — lower sovereign and completion risk.
Commodity diversification is broader than previously apparent
With the full contract set visible, GNG has executed across 9 distinct mineral categories: gold, copper, nickel, lithium, potash (new — SO4 Lake Way), rare earth/copper-nickel (West Musgrave), lead & silver (Abra), mineral sands (Thunderbird), and oil & gas.
This diversification means GNG's order book is less correlated to any single commodity cycle than a gold-focused reading would suggest.
Notably, potash is a first-time mineral — a quiet addition that opens a new category.
Repeat clients, relationship-led wins, and WA concentration
Evolution Mining, Vault Minerals and Santos each appear multiple times.
WA accounts for roughly 70% of contracts geographically, with clusters in Kalgoorlie, Leonora and Leinster. Papua New Guinea (K92, $81m), NSW (Northparkes, Woodlawn) and Queensland (Eloise) provide modest diversification.
The Santos relationship dates to 2008 and 2016 respectively — a 15+ year track record that makes these O&M contracts structurally sticky.
Commodity risk is real — West Musgrave is the cautionary case
West Musgrave was awarded at the peak of nickel enthusiasm (April 2023, OZ Minerals acquisition period). LME nickel collapsed from ~US$30,000/t to below US$14,000/t by mid-2024, rendering the project uneconomic for BHP. The project was suspended October 2024 with GNG absorbing up to $80m in lost FY25 revenue.
This is the structural risk of EPC contracting: projects are awarded in commodity up-cycles and can be suspended mid-execution if prices fall.
GNG's diversification across gold, copper, oil & gas and now potash is the structural hedge — but no contract is immune.
The oil & gas segment is structurally underappreciated
Santos and Inpex together contribute ~$48m per half — roughly $96m annually — with almost no volatility.
This segment never dips below $20m in any half and has been sustained across the entire dataset.
At ~12% EBITDA margin, this is ~$11–12m of recurring annual EBITDA from a near-zero risk source.
The Santos relationship (2008 and 2016 origins) and Inpex (3+3+3 year options) suggest this floor is durable for years.
It effectively funds GNG's overhead structure through every project transition trough.
West Musgrave Impact
Contracts Review
Continuing with notes from my GNG Deep Dive.
Similar to the approach taken for SXE, I compiled the attached list of GNG Contract Awards since 2023 from all formal ASX announcements. It is an impressive list, for sure.
I then sent this to my buddy Chat, and asked for the same insights as SXE. Through this process, I feel I now have very good clarity on the GNG business.
Summary
- GNG is not just winning contracts — it is embedding itself into mining operations over time. That is the difference between a long-term engineering partner and a “contractor”
- The stock behaves like a leveraged play on mining capital expenditure with high ROE, strong balance sheet, niche engineering expertise.
- GNG is transitioning from a cycle-driven EPC contractor → into a repeat-work, installed-base engineering business with cyclical upside
- That combination is why many investors view GNG as a high-quality cyclical.
- GNG is worth buying when contract wins are accelerating, not when earnings are peaking - contract wins → earnings (12–24 months later) and earnings → share price
This exercise plus @Bear77's 2 posts have significantly increased my conviction on GNG - am absolutely in!
Next up is the financial trend charts, and a Valuation, to wrap up the Deep Dive.
Chart Review, Game Plan
I have been actively looking to add to my initial entry point at 3.96 but only got one more bite at 3.76 before the price took off and moved above the long-term green uptrend line to resume the uptrend. With the volatility around the Iran war appearing to taper off, am resigned to having to average up instead.
- The 200 SMA and uptrend line are pretty much in the same zone, so I expect the ~4.10-ish level to be very well supported.
- A correction after the recent runup appears likely in the next week.
- I am planning to top up around ~4.10. Anything below ~4.10 would be bonus.
- If it approaches ~3.71, I will be backing up the bus and loading up!
Discl: Held IRL 0.94% and in SM
Updating the GNG chart from 2 weeks ago.
With the volatility, the $3.96 level, which was my initial entry point, 2 weeks back, did not quite hold up. My next 2 top up points:
- $3.71 is the next level down - the price bounced from this level today, which is one data point around this level. I topped up a small parcel at 3.76, earlier in the week but my order at 3.71 today did not fill unfortunately - the price should bounce around this level in the coming week, I suspect
- If that breaks, the $3.29 to $3.40 is looking to be the next support level - this goes back to July 2025 and looks to have been tested as both resistance (Jul 2025) and support (Oct/Nov 2025), which increases the confidence of its relevance
Discl: Held IRL 0.61%
Pulled the trigger on a starter position with GNG, following @Bear77's summary 1-2 weeks back. Haven't done the full deep dive yet, as I normally do, but having opened the position, lit a self-directed rocket to get on with it ...
The price today fell to a very nice technical entry point at $3.96 - (1) it is at the 200 SMA long term trend, usually a decent support level, (2) which also happens to be the long-term uptrend line from Sep 2024 and (3) the price has retraced ~62% from the recent 19 Feb 2026 high.
As I intend to make this a 2.5% position, still have plenty of bites of GNG if the price drops further from here.
