November 12th, 2021 | 10:29 CET
Barrick Gold, Barsele Minerals, Newmont - Inflation protection for own assets
Table of contents:
"[...] One focus will be on deposits near the surface. These would be good arguments for a quick production decision using the low-cost heap leaching method. [...]" Brodie Sutherland, CEO, Tocvan Ventures
Barrick Gold - Decent quarterly figures
On November 10, the gold price was able to break out of the long distribution phase with the publication of the US consumer price index, which ultimately reflects inflation. Barrick Gold was then also able to break out of its slumber. The Company, which is now increasingly focusing on copper as well as gold, has tried to diversify more. In addition, Barrick is investing in developing new gold deposits to expand its reserves for the future.
Recently, there have been several large acquisitions in the gold sector in North America. The Company has yet to make a move, despite the CEO's desire to acquire more production sites in North America. There are rumors that Barrick Gold is interested in Great Bear. It has not yet been confirmed, and in contrast to the acquisitions mentioned above, Great Bear is not currently producing. It remains to be seen what the Company plans to do. However, investors are starting to get impatient.
On November 4, Barrick presented its third-quarter numbers. It produced 1.09 million ounces of gold and 100 million pounds of copper. Earnings were USD 0.20 per share. So the balance sheet looks good, and the Company is looking for acquisition targets. Since the quarterly numbers, the stock has been rallying. There was even a gap-up with the breakout of the gold price. Market reports speak of pent-up demand for the value and it currently looks like the share could continue to rise.
Barsele Minerals - Realigns itself
The Canadian gold explorer Barsele Minerals holds a 45% stake in the Barsele Project, located in the mining region of Västerbottens Län, northern Sweden. Gold deposits of approximately 2.4 million ounces have already been proven in 2019, according to an NI 43-101 report. The area is 33,500 hectares in size and has been studied in more detail by partner Agnico Eagle in recent years. In May, the Company sought to buy out Agnico Eagle's 55% interest, and a letter of intent was signed.
On November 1, the Company announced that the acquisition of the Agnico Eagle shares had fallen through due to current market conditions. CEO Gary Cope is "looking forward to continuing the joint venture with Agnico Eagle on the Barsele project," according to a company commentary. So things are continuing in the current constellation. On November 10, good news was reported. The Swedish Geological Survey has classified an area of 685 hectares, including parts of the Barsele project, as an area of national interest. As a result, future permitting procedures will be simplified.
The stock, which had fallen from 0.61 Canadian dollars (CAD) to CAD 0.50 after the failed acquisition, recovered much of its losses with the November 10 announcement and is currently trading at CAD 0.57. From this, one can see that the Company has a strong shareholder structure. 60% is held by institutional investors, 25% by management. The market capitalization is currently around CAD 74 million. If you compare that to the gold deposits worth about USD 600 million at the current gold price, you can better gauge the potential.
Newmont - Analysts disappointed
Newmont, the largest gold producer globally, presented its third-quarter figures on October 28, which disappointed analysts. Instead of achieving USD 0.73 per share profit as expected, only USD 0.60 was achieved. The reason is the significant increase in production costs, which rose from USD 830 to USD 1,120. Produced were 1.45 million ounces of gold, as well as 315,000 ounces of gold equivalent. Problems were caused by the Nevada Gold Mines joint venture, which had to deal with production disruptions. In Australia, the Corona pandemic is weighing on production.
In the course of the figures, the Company revised its annual forecast. Instead of 6.5 million ounces of gold in 2021, it is now expected to be only 6 million ounces at USD 1,050. On November 10, the Company announced a strategic collaboration with Caterpillar. The Company aims to work with its partner to develop a connected, automated and zero-carbon mining system to boost its carbon footprint. It plans to produce 26 autonomous electric vehicles by 2027.
Newmont's stock dipped after the numbers were announced, despite a USD 0.55 dividend for the quarter. It was only after the good Barrick Gold figures that Newmont's stock also started to rise again and was able to close the price gap that its own quarterly figures had opened up. The share is preparing to break its downtrend due to the breakout of the gold price on Wednesday.
With the breakout to the upside from gold's distribution zone, shares of all gold producers jumped immediately. Barrick Gold impressed with its quarterly results and is looking for takeover targets. Barsele Minerals has gold in its project area but is only now on the way to becoming a gold producer. Newmont disappointed investors with its quarterly figures, but a rising gold price automatically moves the shares of the largest gold producer upwards.
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.
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.