September 15th, 2020 | 11:00 CEST
B2Gold, Barrick Gold, Desert Gold: Did Warren Buffett bet on the right horse?
The price of gold has stabilized above the USD 1,900.00 per troy ounce mark in recent weeks. Against the background that the Corona Pandemic is not slowing down and that a second wave is becoming measurable in many places, the actions taken by governments and central banks are continuing cheerfully, thus ensuring further demand for the world's oldest currency. Those who want to protect their assets are probably best off buying shares in a gold company like Warren Buffett, and for those who can't decide, there is also a solution.
time to read: 2 minutes
|
Author:
Mario Hose
ISIN:
CA25039N4084 , CA11777Q2099 , CA0679011084
Table of contents:
"[...] We quickly learned that the tailings are high-grade, often as high as 20 grams of gold per tonne; because they are produced by artisanal miners, local miners who use outdated technology for gold production. [...]" Ryan Jackson, CEO, Newlox Gold Ventures Corp.
Author
Mario Hose
Born and raised in Hannover, Lower Saxony follows social and economic developments around the globe. As a passionate entrepreneur and columnist he explains and compares the most diverse business models as well as markets for interested stock traders.
Tag cloud
Shares cloud
Gold becomes attractive for value investors
The US-investor Warren Buffett has set an example with his investment in Barrick Gold. In the past, the experienced and successful CEO of Berkshire Hathaway has always avoided gold companies, as the shares of other industries offered him ever more sensible investment opportunities in connection with their operational possibilities. However, due to the rising gold price, producers like B2Gold and Barrick Gold are making real money and can also pay dividends, a new fact that Buffett does not like to ignore.
Precious metal becomes rarer
According to its own information, Barrick Gold expects that in 2020 the highest amount of gold within one year will be brought to the market by the largest producers, at around 118 million ounces. From then on, an annual decline is to be expected. In 2029, only a quantity of about 65 million ounces of gold is expected, which corresponds to a decline of 45%. There are several reasons for this development. Firstly, the attractive areas are already in production and in addition it is becoming more and more costly to develop new areas. Regulations and restrictions often make it difficult for the industry to expand.
Takeover candidate in West Africa
Given that the reserves of the largest producers have decreased by around 34% since 2012, these mining companies must continuously look for attractive supplies. Each ounce of gold can only be mined and sold once. For this reason, the producers also like to look at attractive takeover targets in their neighbourhood. In West Africa, B2Gold and Barrick Gold each operate gold mines. Not far away, the exploration company Desert Gold Ventures is also active in the areas covering more than 400km2.
Further drill results expected
The company has reached several milestones in recent weeks. Firstly, Desert Gold has raised more than CAD 6.8 million in fresh capital from investors at a price of CAD 0.28, and in addition, management has confirmed the assumptions made in the latest drill program with regard to expected deposits and further discoveries have been announced. Final drill results from the latest program are expected to be released shortly. Work on the projects will resume in approximately six weeks. With the fresh capital, the Company is well positioned for the coming drilling season.
The profit lies in purchasing
On the stock market, however, Desert Gold's share price is in a downward spiral and has lost significant value in recent weeks due to profit-taking. Approximately six weeks ago, the shares changed hands at over CAD 0.30. Despite the successful financing round at CAD 0.28, the share price has since fallen to CAD 0.17. Volatility is a side effect on the stock market and with good timing an attractive yield can be achieved. Desert Gold's management has not only reported good drill results, but the company now has probably the highest cash position since its incorporation. Against this background, it is probably only a matter of time until the share price returns above CAD 0.30. Those who cannot decide on a particular company should diversify.
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 in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.
Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.
Risk notice
Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on news.financial. These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.
The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.
The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.
