January 3rd, 2022 | 08:56 CET
Alerio Gold, Steinhoff, Windeln.de - Get rich with penny stocks or Tesla?
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"[...] Internally we expect the resource to significantly grow the deeper we mine. [...]" Dennis Karp, Executive Chairman, Manuka Resources
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Gold & Silver - A revival with an announcement
The commodities market also surprised last year. While energy and metals became increasingly expensive and contributed noticeably to the increase in inflation, gold and silver ultimately developed negatively. In the meantime, both precious metals had launched an upward attack, reaching highs of USD 1,950 and USD 29, respectively. The course of the year for mining stocks was also characterized by ups and downs; at the end of the year, the widely known NYSE Arca Gold BUGS mining index fell by 15%, from 297 to 253 points.
There is much to suggest that 2022 could be a year for precious metals. On the one hand, gold is being bought by many asset managers as a hedge against inflation. On the other hand, physical demand for precious metals has been rising noticeably since the middle of 2021. The latest inflation data shows a plus of 4.9% for Europe, 6.8% for the USA and 8.4% for Russia. That should mean a rise for gold and silver going forward because similar periods also occurred, for example, from 1999 to 2004. During that time, too, a huge tech bubble ran ahead of inflation.
Alerio Gold Corp. - An interesting project from Guyana
When talking about raw materials, one ends up with the South American continent as a zone with extensive deposits of energy and metal raw materials. In the northeast lies the country of Guyana, which is mainly characterized by agriculture and mining. By 2020, 13 oil fields with an estimated total volume of 5 to 10 billion barrels of oil have been discovered off the coast of Guyana. These volumes are the world's largest newly discovered oil reserves in 20 years. As of 2020, Venezuela's neighbor is now exporting petroleum, with other export hits historically being manganese, diamonds, sugar, timber and gold.
Gold has recently accounted for a significant 35% of the country's exports, with production already exceeding 625,000 ounces in 2019. Well-known players such as Newmont, Reunion, Troy, Omai Gold and G2 Goldfields have long since developed the country. The most famous is probably the Aurora Mine, with resources exceeding 6.9 million ounces. The northeast coast of South America is tectonically similar to the West African gold zone from Mali to the Ivory Coast due to the historical continental drift. Similarly, good conditions for high ore grades exist for northern Brazil and adjacent states, including Guyana.
Alerio Gold Corp. (ALE) is a Canadian exploration company that has secured some licenses in Guyana for the Tassawini Gold Project. The Company is starting work with a historical resource estimate of 499,000 ounces. CAD 34 million has been invested in the gold project, which covers 1,381 hectares, and a mining license has been in place since 2021. The 1,279 drill holes provide a good overview with over 47,509 meters of drilling to date, and the drilling program and subsequent pre-feasibility assessment (PEA) will continue in the new year.
There are currently 73.47 million shares available on a fully diluted basis. Active trading venues are Canada and Frankfurt. At CAD 0.27, the market capitalization is just CAD 19.8 million, an inviting level for first investments.
Steinhoff versus Windeln.de - Speculation with a digital outcome
Away from gold, we want to take a closer look at two more penny stocks, Steinhoff and Windeln.de.
After years of legal disputes, the shareholders of Steinhoff International finally seem to have been proven right. For several days now, the share price of the highly indebted furniture group has been moving northwards at a rapid pace. Most recently, investors seemed to drop all inhibitions, and there was a true price explosion of over 50% from EUR 0.20 to 0.31. One reason for the good mood was another company announcement about progress in the negotiations. It seems that most bondholders have now agreed to waive part of their claims. As a result, the furniture group will likely see a turnaround in its fortunes. But beware: Expectations are boiling up from day to day, and even the slightest hint of doubt could now lead to a sharp correction. The current level of around EUR 0.267 already includes a decline of 20% from the last interim high. Steinhoff remains a gambling share until the judgement.
Another penny stock making a name for itself is the e-commerce company Windeln.de. The excursion to China did not go well for the Company, and the pandemic did the rest. After losing more than half of its share capital, the Company is once again preparing financing measures. In a planned capital increase, the Company intends to issue new shares with proceeds of up to EUR 7 million. To this end, Windeln.de wants to obtain the green light from shareholders at an extraordinary general meeting. In addition, the shareholders are to vote on a capital reduction, which is to be carried out in the run-up to the capital increase after the share price has fallen significantly below the EUR 1.00 mark. The necessary capital cut to cover the losses is seen at 3:1. The calculated share price could then end up at around EUR 2. In our opinion, anyone who subscribes to a capital increase after the third disappointment must be either fully convinced or well informed.
The speculation in Windeln.de must be called unsuccessful so far. At Steinhoff, there is probably an approaching decision with a digital result. Both stocks have the medium-term payoff profile of a black-red bet at the roulette table. An investment should therefore be regarded as a gamble from the outset. The investment theme "precious metals" should get going in 2022, then Alerio Gold would also be in the mix as the project is compelling. Steinhoff and Windeln.de remain popular casino stocks.
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