Close menu

January 4th, 2022 | 11:29 CET

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

  • Gold
Photo credits:

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

Table of contents:

    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 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 Armin Schulz on April 17th, 2024 | 06:45 CEST

    Barrick Gold, Globex Mining, BP - Commodities In the spotlight: Supercycle started?

    • Mining
    • Gold
    • Silver
    • Commodities
    • Oil
    • Gas

    Global demand for commodities is reaching new heights, partly driven by increasing geopolitical tensions. The exchange of attacks between Iran and Israel is a case in point. This conflict, deeply rooted in religious and political differences, continues to escalate and could have far-reaching consequences for international stability and commodity markets. With this latest escalation of the Middle East conflict, security aspects in the global competition for important resources such as gold, silver and copper are taking center stage. China is demonstrating its hunger for resources. However, the price of oil has also risen recently. There has long been talk of a commodity supercycle. Perhaps it has now finally begun. Where should one invest now?


    Commented by André Will-Laudien on April 17th, 2024 | 06:30 CEST

    Discount battle over: Commodities on the counter-offensive! Rheinmetall, Power Nickel, BASF and Varta in focus

    • Mining
    • Nickel
    • Commodities
    • Gold
    • Silver
    • Defense

    Since the bombing of Israel by Iran, the clocks are ticking differently in the Middle East. The next stage of escalation has been reached. If Israel now uses the right to defense as an opportunity to initiate something bigger, it is here: the conflagration. Gold and silver are shining as safe-haven currencies and pulling long-neglected commodity shares through the roof. Now is the time to keep the sails in the wind and ride the long-awaited upward momentum. In the energy transition, strategically safer jurisdictions that can safely serve the growing hunger for commodities are still in demand. We highlight a few opportunities.


    Commented by André Will-Laudien on April 16th, 2024 | 07:05 CEST

    The cannons are thundering, and gold and silver remain in demand! Barrick, Newmont, Desert Gold and SMT Scharf in focus

    • Mining
    • Gold
    • Silver
    • Commodities

    The overnight attack by Iran on Israel underscores the current geopolitical uncertainty. Regardless of whether there is further escalation in the Middle East, the world has already changed dramatically since February 2022. This includes shifts in investor behavior. Until the first quarter of 2024, shares in the artificial intelligence and high-tech sectors were bullish; now, defense stocks and precious metals are on the agenda. After decades of disarmament, NATO, in particular, is now facing a decade of rearmament, and private investors are expressing their restraint in consumption by increasing their focus on private security. This is reflected in the increased purchases of gold and silver. For years, precious metals have been stable guarantors of the daily dwindling purchasing power. We believe that the new valuation cycle in the commodities sector is only just beginning, which is why we are examining favorable entry opportunities.