May 4th, 2022 | 13:05 CEST
Attention, special situation! BASF, Barsele Minerals, Amazon
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"[...] Our projects are at the initial, high reward exploration stage. [...]" Humphrey Hale, CEO, Managing Geologist, Carnavale Resources Ltd.
More risks than opportunities at BASF
At first glance, BASF shares appear to be trading very favorably. Recently, investors were even able to collect dividends. Even though the payout was a zero-sum game for investors, BASF's chart looks battered today. Fears of a gas embargo or a Russian supply freeze weighed on the share. BASF was heavily involved in German-Russian gas deals and also supported Russia with technology related to production. In return, the Company received cheap energy.
In the meantime, this linkage seems to have finally lapsed - at least in the long term. If something comes up even in the short term, BASF is seriously endangered as an energy-hungry company. In recent weeks, representatives of German Energy have spared no effort to warn of an end to gas supplies. Although the stock has come back strongly and could offer opportunities again in the long term, the unclear energy supply situation hangs over BASF's share like a sword of Damocles. There are major risks here in the short term.
Barsele Minerals: What is happening behind closed doors?
The share price of Barsele Minerals has also priced in many risks. The Company operates the eponymous Barsele property in Sweden together with Agnico Eagle. The gold project is considered highly prospective both in the mining scene and by all stakeholders. However, Agnico decided some time ago that it wanted to be more active in Canada. To really move Barsele forward, larger investments are needed. In an interview, Barsele CEO Gary Cope outlined plans for a 35,000-meter drilling program with which the Company hopes to leverage large potential. "To fund this, however, we need a decision. Fortunately, there are already interested parties who can envisage moving Barsele forward together with us," Cope said at the time.
A few weeks ago, the Company completed a small capital increase of slightly less than CAD 700,000. This amount is not enough to fund an extensive drilling program. Still, it is possible that the capital measure is suitable to gain time and negotiate further in peace. As early as December, CEO Cope expressed confidence: "Under certain circumstances, we can kill two flies with one stone as part of this solution, and Barsele Minerals will hold a larger share in the Barsele project in a few months than it does today. The market is moving and we already have plans in place to move forward. Under certain circumstances, we can create a liberating blow for both the project and the share price." The current state of limbo around the Company is a special situation that is evaluated independently of the overall market. It remains exciting around Barsele Minerals!
Amazon continues to have a future
Hardly exciting is the future for Amazon. The eCommerce giant has long since conquered our living rooms and, in addition to streaming, also offers numerous smart home solutions, ebook readers and other services around its product universe. The group understood early on how to win customers and keep them loyal. If the price difference is slight, many people order from Amazon even if the goods are a little more expensive - exchanges and refunds are too smooth if something doesn't fit. The fact that Amazon posted a loss in the first quarter of 2022 is not a disaster either. But disrupted supply chains and crisis after crisis have weighed on Amazon. Many people are now also likely to be drawn back to the city centers. But this trend will not last. Amazon is and will remain convenient and simple. It has a future and also justifies investments. However, it remains unclear when the time will come for the share - most recently, the value tipped downward again.
Established companies are always worth considering in times of crisis. But this time, many things are different. For BASF in particular, the end of its ties to Russia could be drastic. At Amazon, too, it is not clear when the group will grow again as strongly as the numerous fans of the share would like. The Barsele Minerals share is trading detached from supply chains and inflation. If the management succeeds in dissolving the joint venture with Agnico Eagle and invests in the project, the value should awaken to new life, even if the mood on the market is poor.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.
In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
For this reason, there is a concrete conflict of interest.
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