Menu

Recent Interviews

Lewis Black, CEO, Almonty Industries

Lewis Black
CEO | Almonty Industries
100 King Street West, M5X 1C7 Toronto (CAN)

info@almonty.com

+1 (647) 438-9766

Interview with mine operator Almonty Industries: "Tungsten makes e-cars better"


Nick Luksha, President, Prospect Ridge Resources

Nick Luksha
President | Prospect Ridge Resources
1288 West Cordova Street Suite 2807, V6C 3R3 Vancouver (CAN)

info@prospectridgeresources.com

Interview Prospect Ridge Resources: These fillets taste good to the market


Dirk Graszt, CEO, Clean Logistics SE

Dirk Graszt
CEO | Clean Logistics SE
Trettaustr.32, 21107 Hamburg (DE)

info@cleanlogistics.de

+49-4171-6791300

Interview Clean Logistics: Hydrogen challenge to Daimler + Co.


27. October 2021 | 12:34 CET

B2Gold, Tembo Gold, Newmont: Gold from small amounts? Here is how!

  • Gold
Photo credits: pixabay.com

Gold has become mainstream. Even the German newspaper Handelsblatt quotes experts saying that the precious metal currently offers more opportunities than risks. The reasons for this are the rising inflation and the growing uncertainty in the financial system. But how can investors get a foot in the door with gold without having to put up too much capital or, as is usual with physical holdings, having to rent the already scarce lockers?

time to read: 4 minutes by Nico Popp
ISIN: B2GOLD CORP. | CA11777Q2099 , TEMBO GOLD CORP. | CA87974N4057 , NEWMONT CORP. DL 1_60 | US6516391066


Bradley Rourke, President, CEO and Director, Scottie Resources Corp.
"[...] The transaction offers benefits to all parties: Shareholders now have three promising projects in their portfolio. [...]" Bradley Rourke, President, CEO and Director, Scottie Resources Corp.

Full interview

 

Author

Nico Popp

At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

About the author


B2Gold: To and fro empties the pocket?

In order to profit from rising gold prices, gold shares have always offered interesting options. Since the prices of gold companies usually react with a delay to rising prices for the precious metal and numerous other factors, such as the degree of hedging by producers or other operational factors, play a role, investors must examine an investment on a case-by-case basis. If a gold company is already in production, problems at the mine or other factors can negate any tailwind from the gold market. In addition, larger commodity companies sometimes restructure their projects frequently. That is what happened recently with B2Gold. The Company announced its intention to sell its operations in Burkina Faso to West African Resources.

The market positively assessed the transaction, and the shares of B2Gold, which holds further projects in Mali, Namibia and the Philippines, climbed significantly after the news. Still, many commodity producers now resemble confusing conglomerates that hold various interests in addition to a large number of joint ventures and are thus somewhat opaque. The more complex joint ventures and possible concession payments are formulated, the greater the probability that the share price of the respective gold company will also lag behind the gold price. Although B2Gold's stock has been stable recently, the value still lost more than 30% on a one-year horizon. Even the most recent reallocation of the portfolio has not brought about a turnaround. Investors should base their investment decision on the long-term strategy and the extent to which the management can be trusted to achieve the stated goals.

Tembo Gold: Good starting position for investments

The situation is somewhat different for companies like Tembo Gold. Tembo is active in Africa and develops gold projects in Tanzania. Unlike B2Gold, however, Tembo Gold is not a producer. For this reason, the resources in the ground are traded at a significant discount to any eventual market value. Although exploration shares are rightly considered speculative, as the search for raw materials initially costs more money than it brings in, this constellation also offers excellent opportunities. When, as is currently the case, the gold market is still relatively quiet, even promising exploration stocks offer opportunities for favorable entry. True to the motto "The profit lies in the purchase", investors can carefully build up positions in such market phases. Such speculative stocks must not play too large a role in the portfolio. Instead, investors should view such stocks as a kind of insurance policy against crises.

Since it is to be expected that in the event of a crisis and a run on the precious metal triggered by it, the small values increase disproportionately significantly, even smaller position sizes can serve the desired purpose. In the case of Tembo Gold, the current situation is compounded by the fact that the Company only started a new drilling program in October and plans to drill a further 7,000 meters. In addition, the Company recently hired an experienced project manager. Tembo Gold has already completed the capital increase associated with the drilling program, which makes further dilution unlikely in the near future. Since the Company operates in the vicinity of Barrick's Bulyanhulu mine in Tanzania, Tembo always resonates with a bit of takeover fantasy. At around EUR 16 million, the Company has an extremely low valuation, making it more suitable as crisis insurance than any gold heavyweight.

Newmont: Solid, but no more

The world's largest gold producer, Newmont, shows that big stocks are often not a good choice. Shareholders have not been able to make a good cut with the paper in recent months. A few weeks ago, the Company even conceded its forecast. But what happened next? The share price did not react to the bad news. The analysts from Jefferies in Canada immediately declared the value to be a conservative entry opportunity and proclaimed a price target for gold at USD 5,500 in the course of the growing distortions on the markets. Should gold rise to this level, any stock even remotely related to the precious metal is likely to rise as well. Under any more conservative scenario, however, Newmont is unlikely to be among the favored stocks. While the Company offers large reserves and a dividend yield of around 4%, Newmont does not exude great imagination.


At best, Newmont's stock is suitable for cautious investors who want to park larger amounts for the long term anyway. Here, the solid project pipeline and the active dividend policy could be good arguments. However, those who want to invest dynamically or are looking for crisis insurance should take a closer look at smaller stocks, such as Tembo Gold. In the event of a gold boom, there is more potential here in the short term. In return, however, the stocks are considered more speculative.


Author

Nico Popp

At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

About the author



Conflict of interest & risk note

In accordance with §34b WpHG we would like to point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH may hold long or short positions in the aforementioned companies and that there may therefore be a conflict of interest. Apaton Finance GmbH may have a paid contractual relationship with the company, which is reported on in the context of the Apaton Finance GmbH Internet offer as well as in the social media, on partner sites or in e-mail messages. Further details can be found in our Conflict of Interest & Risk Disclosure.


Related comments:

26. November 2021 | 14:06 CET | by Carsten Mainitz

MAS Gold, K+S, Klöckner & Co. - For fans of real assets!

  • Gold

Inflation has certainly not yet reached its peak. The scenario of only a short phase of major losses in purchasing power - according to the position of the central banks - must be doubted anyway. Therefore, forward-looking investors should invest in tangible assets such as stocks, bonds or commodities. Anyone thinking of building up or expanding a commodities portfolio should take a closer look at the following stocks. Who is winning the race?

Read

24. November 2021 | 13:05 CET | by Armin Schulz

Gazprom, Tembo Gold, Nvidia - Inflation and rare goods

  • Gold

Inflation has jumped not only in the USA but also in Germany. With an inflation rate of 4.5% in October, we now have the highest value in Germany in almost three decades. One driver of monetary devaluation is the cost of energy, which has become significantly more expensive, especially in the past year. While the oil price was still in negative territory at the beginning of the pandemic, it was recently quoted above USD 80. The chip shortage can be observed in the automotive industry, but graphics cards are also rare and are traded at a significant premium to the recommended retail price. Graphics cards are used for mining cryptocurrencies. It seems that bitcoin is increasingly becoming a value protection asset and competes with gold, the number one inflation protection.

Read

22. November 2021 | 12:50 CET | by Nico Popp

Amazon, Desert Gold, Deutsche Telekom: First movers are rewarded

  • Gold

Is it Christmas again? History is currently repeating itself: incidences are rising, Austria is going into lockdown, and German investors are gearing up for a form of contemplation that no one had expected after the vaccination successes in the summer. But life with a home office and delivery services also has advantages for passionate investors: There is plenty of time to take care of one's finances. Investors can profit since the market does not yet attach much importance to the dangers of inflation and the major central banks' ignorance of inflation. We present three stocks for long home office days.

Read