A Breakout in the Making? Desert Gold Ventures and Oklo following in Moderna's footsteps

Moderna: Already overshot the mark?

An old stock market adage says: buy the rumour, sell the news. Moderna shareholders experienced just how hard it can hit a week ago. Shortly before the ESMO cancer congress in Madrid, the results of the pivotal Phase 3 trial INTerpath-001 were announced. The personalised mRNA cancer vaccine Intismeran, in combination with Merck's drug Keytruda, reduced the risk of recurrence or death in skin cancer patients by 42% compared with Keytruda alone. After two years, 82.2% of those treated were cancer-free, compared with only 70% in the control group. Despite this success, the shares plunged about 20% that day, wiping out about USD 24 billion in market capitalisation. The US market launch is planned for 2027, while overall survival data are still pending.

The good news had apparently long been priced in. Within a year, the share price rose more than sevenfold, with market capitalisation at one point exceeding USD 100 billion. Against this, revenues have declined, and losses have persisted since the end of the pandemic years. At the current price of USD 205.28, the shares are trading well above the average analyst price target of around USD 123 despite the setback (the range extends from USD 17 to USD 230). Analysts at investment firm William Blair recently downgraded the shares to Market Perform because of the high valuation. Moderna will report quarterly results on November 6, with an expected loss of around USD 1.10 per share. Consensus estimates suggest break-even could be reached in 2029. Despite the promising business model, the share price's upside potential appears exhausted for now.

Desert Gold: The first ounces are within reach

More exciting than shares that have already made a big leap are those that still have room to run. One candidate is Desert Gold Ventures. The Canadian company is on the verge of becoming a gold producer. The centrepiece is the SMSZ project in western Mali, a 440 km² area along the Senegal-Mali Shear Zone. Industry heavyweights such as B2Gold, Barrick Mining and Allied Gold are already mining the sought-after precious metal nearby. The resource base comprises just over 1.2 million ounces of gold – a theoretical equivalent value of USD 4.8 billion. The Tiegba project in Côte d'Ivoire promises to become a second pillar. Across 297 km², a potential gold deposit almost 5 km long lies underground there and has never been drilled. A further 20,000 m drilling programme in Mali is also planned for early 2027.

First, however, the SMSZ project is expected to generate cash flow. The gravity processing plant with a daily capacity of 200 tonnes and the generator have arrived at the Barani East construction site, and the foundations have been poured. Sea freight delays, fuel shortages and the rainy season have pushed back the start, originally planned for July, by four months. Commissioning is now scheduled to begin in November, with the first pit opening in December and the first gold mined before year-end. CEO Jared Scharf is targeting full operation by the end of March 2027. Permits, the export licence and environmental licences are in place. The production start is funded without debt, royalties or forward sales. Scharf recently presented the company at the International Investment Forum (IIF). The presentation is available here:

The small facility now entering operation will serve as a real-world test for a larger-scale rollout. A preliminary economic assessment (PEA) for Barani and Gourbassi calculates an after-tax net present value (NPV) of USD 124 million and an internal rate of return (IRR) of 101% at a gold price of USD 4,070 per ounce. The stock market has not yet priced in the approaching start of production. At a share price of CAD 0.14 (currently EUR 0.08 to EUR 0.09 in Germany), Desert Gold has a market capitalisation of around CAD 50 million, or EUR 32 million. Analysts at GBC Research value the deposits far more highly and reaffirmed their Buy recommendation in early October with a price target of CAD 0.93 (EUR 0.59). This is more than seven times the current share price. The prerequisite is a successful production ramp-up. The next catalyst is therefore unlikely to come from financial statements, but rather from updates from Barani: throughput, recovery and the first gold poured.

Oklo: The reactor is running; the share price is not yet

Investors may have to wait a little longer for Oklo. The US company develops small modular nuclear reactors intended primarily to supply data centres with electricity. A significant milestone that has so far drawn little market reaction: in August, the Groves test reactor in Texas achieved first criticality, marking the start of a self-sustaining nuclear chain reaction. In May, the US Nuclear Regulatory Commission (NRC) approved the principal design criteria for the Aurora power plant, and the Department of Energy gave the green light for the safety analysis of a reactor in Idaho. A prominent customer is lined up: Meta Platforms plans to build up to 1.2 gigawatts of capacity in Ohio, starting in 2030 at the earliest. At the end of June, cash and cash equivalents stood at around USD 3 billion.

Nevertheless, shares have lost around 61% since the start of the year. Doubts about the returns on AI investments are weighing on the share price, compounded by heavy losses and repeatedly postponed timelines. The first commercial Aurora reactor is not expected to connect to the grid until 2028. Until then, quarterly revenue is unlikely to exceed USD 1 million by much. For the next results, expected to be released on November 6 at the same time as Moderna's, analysts anticipate a loss of USD 0.26 to USD 0.29 per share. The focus will likely be on how long the financial cushion lasts and adherence to the schedule. The average analyst price target of around USD 70 is more than 150% above the current level of USD 27.50 (EUR 24.20). Investment firm Tigress Financial even sees potential at USD 130, far more than four times the current share price.

The countdown to the catalyst

Moderna shows how quickly prices can rise, but also how quickly the stock market can price in success. Desert Gold and Oklo have reached important milestones without their share prices reacting so far. For Desert Gold, the first precious metal mined could provide decisive momentum in just a few weeks, while Oklo investors may need a little more patience. Both stocks are speculative, but analysts' price targets show how much potential they hold. However, investors buying in should be able to withstand share price fluctuations. See Moderna.