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01. November 2021 | 12:50 CET

Barrick Gold, Central African Gold, Gazprom - Gold becomes a fireball!

  • PreciousMetals
Photo credits:

The development of gold follows the inflation trend in our economies in the last 25 years. Before the turn of the millennium, the ounce was still below USD 200. Due to the real estate bubble after the dot-com boom and the devastating effects of the US subprime crisis, the precious metal reached its temporary peak in 2011 at USD 1,950. At that time, the ECB tried to prevent the collapse of Greece with emergency loans. With the deployment of EUR 336 billion, this European rescue experiment succeeded for the time being, but the gold price then lost value again in the following years until 2015, down to USD 1,120. Last year, there was then a new attempt in the direction of north. In May, the precious metal reached USD 2,050 - a plus of USD 600 since the Corona Crisis. Where does the metal go from here?

time to read: 4 minutes by André Will-Laudien
ISIN: BARRICK GOLD CORP. | CA0679011084 , CENTRAL AFRICAN GOLD INC. | CA1523761098 , GAZPROM ADR SP./2 RL 5L 5 | US3682872078



André Will-Laudien

Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.

About the author

Barrick Gold - Newmont drags down the industry

A major industry player with 200 tons of annual production and 14 active mines is Canadian mining giant Barrick Gold, based in Toronto. The precious metals miner's business activities include the production and sale of gold and copper, as well as capacity-renewing exploration activities. Optimizing the operational set-up naturally includes regular mine closures. About 90% of sales in 2021 will come from the precious metal gold and 8% from the industrial metal copper.

Last week, the share price of Barrick Gold went into reverse, which many would probably have imagined differently. Unfortunately, the world's second-largest gold producer is not having a good run on the stock market at the moment. However, the weakness within all gold shares was due to the figures presented for the third quarter of the number one: Newmont Mining. These turned out to be anything but good, as adjusted earnings for the third quarter were only USD 0.60, USD 0.13 lower than analysts' consensus estimate. Using US GAAP, there was even a small loss of USD 0.01 per share. Newmont also significantly lowered its guidance to 6 million ounces of production.

Now, expectations for Barrick Gold's upcoming numbers are also subdued. The Canadians will report next Thursday, November 4. The share price has already taken a dive at EUR 15.9 and has now lost a complete 23% within 5 months. Analytically, the Barrick share is now trading at a 2022 P/E ratio of 13, and of the current 24 analysts, 16 recommend entry. We are currently looking at the EUR 15.5 line from a chart perspective because a fall below this mark threatens trouble. Therefore, continue to observe only from the sidelines!

Central African Gold - Cancellation for the Zani Kodo project

For years, the Democratic Republic of Congo (DRC) in Central Africa has been a sought-after commodity industry location. The former colony of Belgium under the name of Zaire is today abbreviated as Congo and is the second largest state in Africa in terms of area, behind Algeria. The country is crossed by the equator and has a tropical climate throughout. The capital, Kinshasa, is considered Africa's third-largest city, with over 13 million people. Despite its wealth of raw materials, the state is one of the poorest countries in the world today due to decades of corruption and wars.

A future employer is currently being created under the name Central African Gold (CAGR). It is a company focused on acquiring, exploring, and developing cobalt and copper mineral properties in the DRC. The concession portfolio, which has grown over 7 years, includes prospective copper, nickel, tin, cobalt, and gold projects. Since its foundation, CAGR has pursued a sustainable corporate policy regarding climate targets and social and corporate governance.

Currently, the team led by CEO Yves Kabongo has terminated the agreement announced in September to acquire an interest in the Zani-Kodo gold project in Ituri Province, following the completion of preliminary due diligence. The Company will focus on its existing projects and explore new expansion opportunities. In doing so, implementing a carbon capture program to earn carbon credits will gradually complement the targeted mining operations.

With a market capitalization of just under CAD 11 million, the Company is not expensive given its good projects. As a future multi-metal supplier, the CAGR share is a good addition for risk-conscious commodity investors.

Gazprom - Price correction of 10% attracts new investors

Another top positioned commodity company from the energy sector is Gazprom PJSC. The Company is the world's largest gas and oil supplier and the most important contract partner for fossil energy supplies to Europe. Since the beginning of the year, German energy prices have increased by 50-70% in oil products and 200-500% in gas products.

Russian President Vladimir Putin has now ordered a further increase in gas supplies for November to ease the current energy crisis in Europe. He instructed state-owned Gazprom in the middle of last week to significantly increase reserves, specifically to Germany and Austria, as soon as Russia's underground storage facilities are filled. The start for the new supply volumes is to be in the second week of November. Russian state media already celebrated Putin as Europe's savior, but the concession is made based on sharply higher gas prices, which are still up a good 150% since the beginning of the year.

It is a mega-deal for Gazprom since it is, of course, possible to contractually fix the new production volumes at much higher prices. The irrationality in the price structure is the political discussions about the Nord Stream 2 pipeline; the Russian leverage seems to be working. The Gazprom share promptly fell into a corrective movement, losing a full 10% in just 5 trading days. With a dividend yield of 5.5% and a P/E ratio of 8, the energy giant is one of the cheapest commodity stocks on the price list. Medium-term investors are likely to return soon.

Not a good episode for precious metals; again, gold is under chart pressure. For Barrick and Newmont, these are challenging times, but at Central African Gold, the sought-after industrial metals are on board for diversification.


André Will-Laudien

Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.

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:

17. November 2021 | 13:11 CET | by Nico Popp

Barrick Gold, Triumph Gold, Newmont: Here is what matters for Barrick and Co.

  • PreciousMetals

The gold price has recovered in recent weeks. The increasingly strong inflationary pressure and the growing nervousness of professional market participants, such as banks, which see increasing pressure on monetary guardians to act in the fight against inflation, may have attracted some investors' attention to the precious metal again. But how can investors invest? Physical holdings involve incidental purchase costs and require a safe deposit box - bank safe deposit boxes are already in short supply at present. Financial products, such as ETCs, are more paper than precious metal and are certainly not suitable for crisis protection in the worst case. That leaves equities. We present three stocks.


08. November 2021 | 13:05 CET | by Carsten Mainitz

Triumph Gold, Barrick Gold, Rheinmetall - Precious metal stocks jump!

  • PreciousMetals

Despite persistently high inflation, the US Federal Reserve is still far from thinking about interest rate hikes. At least in the stimulus bond purchases, however, the central bankers will step on the brakes a little and, as of November, reduce the volume of currently USD 120 billion monthly by USD 10 billion each. The program will then end completely in the fall of 2022. In the wake of this decision, prices for precious metals rose. Gold rose above the important resistance of USD 1,800.


02. November 2021 | 12:59 CET | by André Will-Laudien

Newmont, Tembo Gold, First Majestic - The inflation bubble is filling up!

  • PreciousMetals

With the current climate debate and the parallel GreenTech hype, the development of precious metals is being ignored and left aside. Investment flows are going into the strong momentum stocks from the tech sectors, and gold and silver keep ending up on the sell lists after minor recovery attempts. The Federal Reserve is worried about dealing with the latest inflation data; after all, the economy is still laboring from broken supply chains and blocked sea routes. There will not be much growth in 2021 either, which does not seem to bother the stock markets. After all, shareholders like to hear the magic word "inflation," as it promises higher nominal profits and historically high asset prices. But the topic of gold and silver will come, so today, we look at interesting mining stocks.