Barrick Gold, Blackrock Silver, Deutsche Rohstoff - The safe havens are booming

Barrick Gold with upswing

While gold only fell by around 7% since the start of the correction in August 2020, it hit even the largest gold producers significantly harder. The number two after Newmont, Barrick Gold, lost almost half its stock market value in the last three years and could only marginally break away from its low for the year at USD 13.82 to currently USD 15.87.

The countermovement was due to the preliminary production results for the third quarter. These were around 3% higher than in the previous quarter. The reason for this was higher production at the Cortez mines in Nevada. Accordingly, the Company's total preliminary gold production amounted to 1.04 million ounces, compared to 1.01 million ounces in the second quarter. For the first 9 months, gold production was 3 million ounces of gold.

The most important is a look at total production costs. The Toronto-based company indicated they are 6 to 8% lower than in the second quarter. Due to the decreasing cost pressure, Barrick expects a much better final quarter.

In addition to gold, copper production was raised to 112 million pounds. The Company will publish the final figures on November 2.

Blackrock Silver - Impressive results

In major trend movements in the gold market, it is historically refuted, smaller exploration companies lose disproportionately. In contrast, they act like a leveraged product to the upside, significantly outperforming both the underlying value and larger producers. The conditions for a rising gold price are in place; with the expansion of geopolitical conflicts and a resumption of loose monetary policy, several analysts are optimistic. Société Générale expects a gold price of USD 2,200 per ounce by the end of 2024.

Thus, the time has likely come to position oneself in fundamentally strong individual stocks. An attractive entry opportunity is offered by the shares of Blackrock Silver, currently trading at a discounted level of almost 80% compared to its all-time high, which was reached in August 2020 at CAD 1.61. Blackrock Silver focuses on the development of silver and gold projects in the US state of Nevada. In this context, Blackrock's flagship Tonopah West project consolidates the western half of the famed silver district within the Walker Lane Trend. The Tonopah Silver District historically produced over 174 million ounces of silver and 1.8 million ounces of gold.

The updated resource estimate provides for a significant 135% increase in silver equivalent mineral inventory over the initial estimate of April 2022, and the fact that discovery costs have decreased to USD 0.29 per silver equivalent ounce is also positive. The updated MRE totals 0.57 million ounces of gold and 47.74 million ounces of silver, or 100.04 million ounces of silver equivalent. Based on the updated estimate, CEO Andrew Pollard said the footprint of mineralization has more than doubled from the first mineral resource estimate, with the gangue corridor now extending over 3 km due to the inclusion of the new Northwest Step Out target.

In addition, the Company said there are no indications that the system will end in either strike or depth. Following the results, Blackrock Silver's shares posted double-digit gains and are trading at CAD 0.33, only marginally below the downtrend established since March 2022.

Deutsche Rohstoff - It is going like clockwork

The terrorist act of Hamas on Israel and a possible escalation in the Middle East triggered rising commodity and precious metal prices. Since the event, the North Sea Brent crude oil has increased by approximately 5%. In response, oil producers such as Deutsche Rohstoff AG also performed well, currently trading at EUR 33.95, just below its all-time high from June 2022 at EUR 34. Since the beginning of the year, the share price has gained around 38%.

In addition to the rising oil prices, a continuing flourishing business was the main reason for the positive sentiment at Deutsche Rohstoff AG. In the latest forecasts, the Heidelberg-based company expects revenues of between EUR 188 million and EUR 198 million. Previously, the target was EUR 150 million to EUR 185 million. In terms of EBITDA, Deutsche Rohstoff now expects EUR 138 million to EUR 148 million, compared to the previously estimated EUR 115 million to EUR 140 million.

In the coming year, revenues of between EUR 190 million and EUR 210 million are planned, with EBITDA of between EUR 145 million and EUR 180 million. Due to the positive developments, the analysts of Alster Research increased their price target from EUR 47.10 to EUR 52.50. Based on the forecasted EV/EBITDA for 2023 and 2024, the discount to the peer group is now more than 50%, further supporting their "Buy" recommendation.

The quarterly figures of the second largest gold producer, Barrick Gold, increased compared to the previous quarter. Deutsche Rohstoff also fared much better, raising its forecast for 2023 and 2024. Blackrock Silver delivered a 135% increase in its updated mineral resource estimate and is likely to be one of the favorites among exploration companies as gold and silver prices rise.