Defense explodes, commodities boom, gold shines: Rheinmetall, Globex Mining, and Barrick Mining benefit

Rheinmetall – Europe's defense engine in high gear

Geopolitical tensions and the push for European defense autonomy are fueling demand for defense equipment. Rheinmetall, a leading German technology group, is clearly positioning itself as a key beneficiary of this trend. Exploding defense budgets in NATO and the EU, driven by new security realities, offer a massive sales environment. The Company already recorded a 46% increase in revenue in the first quarter, driven by military business, which grew by 73%. While the civilian sector is weakening, the defense division is dominating this positive development.

Rheinmetall is strategically well-positioned. Its focus on state-of-the-art land systems, such as battle tanks and infantry fighting vehicles, secures its technological leadership. With a record order backlog of EUR 63 billion, capacities are fully utilized in the long term. Major orders, such as for over 100 battle tanks and international expansion through new plants in Poland and the UK, underpin growth. The operating margin climbed significantly in the military segment and is expected to rise to 12-14% in 2025, driven by economies of scale and strategic portfolio optimizations.

Despite strong fundamentals, the business model harbors risks. Rheinmetall's success is closely linked to ongoing geopolitical tensions and government defense spending. Unexpected peace could slow momentum. At the same time, the Company is pushing ahead with its future viability. Strategic alliances, such as the satellite joint venture with ICEYE and partnerships with companies such as Lockheed Martin and Reliance in India, are strengthening the technological base and supply chains. The development of digital battlefield solutions such as the "Battlesuite" highlights the Company's commitment to innovation. The share price, which currently stands at EUR 1,857.00, is rising in the EURO STOXX 50.

Globex Mining – Diversification and momentum in the commodities sector

Globex Mining has a broad and diversified business model. The Company has an impressive portfolio of 258 mineral projects, including 129 focused on precious metals, 70 on base metals, and 59 on promising specialty minerals. These properties cover gold, silver, copper, nickel, lithium, rare earths, and more. This is further strengthened by 106 active royalty agreements. This broad diversification across commodity classes and regions, with a focus on North America, serves as a natural risk buffer and allows for flexibility in volatile markets. The debt-free company finances its activities from cash reserves. The Company generates revenue by granting options on its projects to other companies. Ideally, the partners will bring the projects into production, and Globex will receive royalty income in return.

The first quarter of 2025 documents a strong operating performance. Globex increased revenue by 23% to CAD 542,000 compared to the same period last year. This growth is mainly due to successful option agreements and project sales. The Company expects revenues of approximately CAD 5 million by the end of the year. At the same time, a robust balance sheet highlights the Company's financial strength with working capital of CAD 33.1 million and cash reserves of CAD 8.6 million (as of March 2025). These resources offer significant scope for strategic acquisitions of projects with historical resources and high-quality exploration targets.

Recent developments demonstrate the effectiveness of the business model. In the James Bay region of Quebec, high-grade nickel and platinum group element discoveries of up to 19.6% Ni and 7.25 g/t PGE on Azimut Exploration's adjacent Perseus project indicate significant potential for Globex's own Tyrone property with similar geology. At the same time, the value of the 3% gross metal royalty on the Parbec gold property increased significantly. An updated measured resource estimate recorded a 29% increase to 265,800 ounces of gold. These advances demonstrate how Globex generates value through targeted exploration and its royalty model, even without in-house production. The stock is currently trading at CAD 1.38, up approximately 16% from the beginning of the year.

Barrick Mining - Strong start with strategic decisions

The first quarter brought solid operational and financial performance for Barrick Mining, formerly Barrick Gold. The Company reported a significant 84% increase in adjusted net earnings per share compared to the previous year. Operating cash flow of USD 1.2 billion and free cash flow of USD 375 million enabled a 5% reduction in net debt. The Company continues to create value for its shareholders through a quarterly dividend of USD 0.10 per share and share repurchases worth USD 143 million. Gold production was at the upper end of the forecast at 758,000 ounces, while copper production rose to 44,000 tonnes. The realized gold price of USD 2,898 per ounce supported margins despite scheduled maintenance in Nevada and expansion activities in the Dominican Republic.

Barrick is consistently advancing its key strategic projects. At the Reko Diq copper project in Pakistan and the Lumwana project in Zambia, dedicated teams have been mobilized, long-term procurement has been secured, and engineering partners have been appointed. These investments are expected to substantially increase the Company's copper and gold production and underpin the target of 30% organic growth in gold-equivalent ounces by 2030. The expansion of the Pueblo Viejo gold mine is proceeding in parallel. The high-grade Fourmile gold project in Nevada is in the preliminary study phase, with extensive drilling targeting significant resource expansions. At the same time, Barrick is optimizing its portfolio through the planned sale of interests such as Tongon and Hemlo.

The ongoing legal dispute over the Loulo-Gounkoto mine in Mali poses a significant challenge. Activities there have been suspended since January after the government blocked gold exports and detained employees. Barrick vehemently denies the allegations of tax arrears. The government has so far unsuccessfully sought the appointment of a receiver for the mine site. A decisive ruling by the commercial court in Bamako is expected in early June. Barrick emphasizes the lack of legal basis for receivership and has initiated international arbitration proceedings in accordance with the mining agreements. The Company continues to seek a fair solution through dialogue. The share is currently trading at USD 20.10.

The driving forces of defense, critical raw materials, and gold will define investment opportunities in 2025. Rheinmetall, Europe's defense powerhouse, is benefiting directly from exploding defense budgets and a record order backlog of EUR 63 billion, driven by state-of-the-art land systems and international expansion. Globex Mining impresses with its unique, debt-free royalty model and a broadly diversified portfolio of 258 projects, which recently delivered strong revenue growth and flexibility in volatile markets. Barrick Mining starts with strong quarterly figures and robust cash flow but faces challenges in strategically important Mali due to an escalating legal dispute over Loulo-Gounkoto.