Close menu




January 4th, 2022 | 11:29 CET

Barrick Gold, Barsele Minerals, Yamana Gold - Before the rebound!

  • Gold
Photo credits: pixabay.com

Last year, the general conditions spoke for a rising gold price, but because there is often a gap between theory and practice, the precious metal price declined by about 5% instead of reaching higher prices. Most precious metal shares lost more. Experts nevertheless believe that gold has upside potential in 2022. With disruptions in the geopolitical situation or an economic slowdown, a sharp rise in inflation and negative real returns could quickly make precious metals en vogue again. With which stocks can investors position themselves successfully against this background?

time to read: 3 minutes | Author: Carsten Mainitz
ISIN: BARRICK GOLD CORP. | CA0679011084 , BARSELE MINERALS | CA0688921083 , YAMANA GOLD INC. | CA98462Y1007

Table of contents:


    Ryan Jackson, CEO, Newlox Gold Ventures Corp.
    "[...] 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often as high as 20 grams of gold per tonne; because they are produced by artisanal miners, local miners who use outdated technology for gold production.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.

    Full interview

     

    Barrick Gold - Operationally top, yet the share is not running

    Last year, the shares of the world's second-largest gold producer lost around 20%, while the precious metal price fell by only 5%. The Canadians own shares in 14 gold mines, including six tier-one gold assets, i.e. mines that produce at least 500,000 ounces of gold p.a. over a period of ten years or more. Geographically, the most important location is the USA. Overall, the assets are of high quality and have a long operating life. Barrick also earns about 10% from the production of the industrial metal copper.

    The industry has been characterized by several key trends for many years. Globally, project gold grades are declining. There is a shortage of high-quality development projects, and, in general, reserves, i.e. gold deposits that have not yet been mined, are declining. That has also been reflected at Barrick; production was much higher 5 or 10 years ago. Nevertheless, the high gold and copper prices in the last two years led to a significant increase in profits, high dividend payouts, good free cash flow generation and massive debt reduction.

    With further development of its projects, exploration activities, acquisitions, high commodity prices and production at a high level, analysts forecast a rosy future for the Company. The experts attest the share of the commodity company, valued at around CAD 43 billion, an upside potential of a good 40% on average.

    Barsele Minerals - Will the breakthrough come in 2022?

    If you look at the share price of the Canadians from today and from a year ago, practically nothing has changed at prices above just under CAD 0.50. Nevertheless, last year's fluctuation range from CAD 0.35 to CAD 0.82 was considerable. A low in the share price was marked at the end of 2021, since when the share price has risen significantly. The stock market value of the promising gold explorer is currently CAD 69 million.

    The Barsele gold project is located in northern Sweden and covers a size of 34,500 ha. A 2019 resource estimate indicated a deposit of 2.41 million ounces of gold. The short-term goal is to expand the resource to 3.5 million ounces. The experienced management considers even more than 5 million ounces feasible in the medium term. Many experts share the opinion that this is a valuable project. As early as 2016, the Royal Bank of Canada (RBC) carried out a valuation of the Barsele Gold Project. At a gold price of below USD 1,350 at the time, the RBC analysts calculated a project value of USD 375 million.

    Diamond drilling in June and July 2021 covered a length of almost 3,100 m and 18 completed or expanded core holes. Since the end of 2015, 422 drill holes have been completed, and a substantial 158,439 m has been intersected. The project is operated by the Agnico Eagle joint venture. The major owns 55%, with Barsele holding 45%. Barsele itself is not required to expend any cash until a pre-feasibility study is completed. After completing the pre-feasibility study, the major can acquire another 15% in the project, bringing it up to 70%.

    However, in recent months the joint venture partners had entered into an exclusive letter of intent whereby Barsele Minerals could also acquire the project outright. While this expired at the end of October, we cannot imagine that this was it. Should the deal, with a transaction volume of USD 45 million, come to fruition this year, the share price should react with a price jump.

    Yamana - Almost 50% price potential according to analysts

    The Canadian precious metals producer has presented good operating figures in recent quarters. The share price speaks a different language, with a decline of about a third. Currently, the Company is valued at CAD 5.1 billion and has a price-to-book ratio of 0.7, which indicates an undervaluation.

    Given high precious metal prices and high production performance, profits and cash flow increased significantly at Yamana, as could be observed throughout the industry, which led to a significant reduction in debt. Shareholders are also benefiting from rising dividend payments and a strengthened balance sheet, which is also expected to lead to higher M&A activity in the future. Analysts are bullish on Yamana shares and believe the stock has an upside potential of almost 50%.


    Even with gold prices at current levels, producers can earn high profits, even if costs are expected to rise this year. There is a lot to be said for a rising gold price. Thus, producers like Barrick and Yamana should be among the winners. If the deal between Barsele Minerals and Agnico goes through this year, the share should gain significant momentum.


    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.


    Der Autor

    Carsten Mainitz

    The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.

    About the author



    Related comments:

    Commented by André Will-Laudien on July 4th, 2022 | 12:25 CEST

    Attention, turnaround! Lufthansa, TUI, Desert Gold, Deutsche Bank: These stocks are taking off again!

    • Gold
    • Tourism
    • Investments

    From several perspectives, the ongoing crisis is a mammoth task for asset managers and private investors. First, after the long uptrend and the absolute boom valuation of growth stocks from 2015 to 2022, no one knows when a sufficiently high discount has been reached to re-enter. Some stocks, such as Plug Power, are very forward-looking and dependent on government contracts. Here there have already been sales valuations of a factor of 200. So is a P/S ratio of currently 12 after an almost 80% share price loss cheap or still hopelessly overpriced? We do not know because the ongoing war sets new market parameters daily. The major indices will therefore continue to search for a valuation basis in a very volatile manner. We pick out a few selected opportunities.

    Read

    Commented by Stefan Feulner on June 30th, 2022 | 11:03 CEST

    Tocvan Ventures and BYD with outstanding news - TeamViewer plunges into a bottomless pit

    • Gold
    • Silver
    • Technology
    • Battery

    The current correction has hit interest-sensitive growth stocks particularly hard. The US technology exchange NASDAQ, for example, has lost around 34% of its value since the beginning of the year and its high of 16,670 points. Investors did not even stop at shares in future technologies such as electromobility. But in contrast to top dog Tesla - Musk's shares have halved in value within six months - Chinese competitor BYD is rushing from one high to the next. There is also strong news from a promising gold and silver exploration company. A gold price that experts expect to be positive in the long term could help the company to outperform.

    Read

    Commented by Stefan Feulner on June 30th, 2022 | 10:09 CEST

    Rheinmetall on the verge of a breakout, and MAS Gold and K+S with rebound opportunity

    • Defense
    • Gold
    • fertilizer

    Due to the uncertain geopolitical situation regarding the Ukraine conflict and concerns about inflation getting out of hand, the most important stock market indices are again turning downward. Germany's leading index, the DAX, is once again struggling with the psychologically important 13,000-point mark. With the exception of defense stocks, there is downward pressure across the board. Fertilizer manufacturers, which initially benefited particularly from the sanctions against Russia, are also correcting sharply and offering interesting entry opportunities for long-term investors. The precious metals markets are also running into attractive buying zones.

    Read