December 28th, 2023 | 07:10 CET
Barrick Gold, Desert Gold, Bitcoin Group - Currency revolution: Beyond the dollar
Table of contents:
"[...] As we look at four or more zones in more detail from the beginning, investors can expect a continuous news flow that will underscore our vision of the Holy Grail project as a giant opportunity. [...]" Nick Luksha, President, Prospect Ridge Resources
Barrick Gold - Growth ahead
An all-time high in gold prices marked in early December is particularly advantageous for one of the largest gold producers, Barrick Gold. The strong results from the third quarter already showcased gold production of over 1 million ounces, all while experiencing declining overall costs. A good result can, therefore, be expected in the fourth quarter, as the price of gold has risen significantly. However, gold equivalent production is also expected to grow by a further 30% by 2030. As recently as December, the Group announced that the Porgera gold mine in Papua New Guinea will resume production at the beginning of 2024 and has the resources to sustain operations for 10 years. At least 500,000 ounces of gold are to be produced annually.
On December 11, Nevada Gold Mines, a joint venture with Newmont, received approval for the Goldrush Mine. The mine is expected to start production in 2024 with 130,000 ounces and grow to around 400,000 ounces annually by 2028. In addition to gold, the Company primarily owns copper deposits. Copper production is to be doubled to around 1 billion pounds of copper over the next 6 years. The Reko Diq project in Pakistan and the expansion of the Lumwana Super Pit should contribute to this. The Company appears to be well-positioned for the coming years.
CEO Mark Bristow has reduced debt and put the Company back on track. The dividends and share buyback programs are helping the share price, yet the valuation ratios can be considered cheap compared to the competition. These include the price-to-book ratio of close to 1.0 and the price-earnings ratio. Analysts are also convinced. In the last 90 days, 24 analysts have issued their assessments. 17 recommend buying, 6 recommend holding, and only 1 recommends selling the share, which is currently trading at USD 18.14.
Desert Gold - Initiating gold production
Not only the established gold producers are benefiting from the higher gold price, but also the second-tier explorers. This includes Desert Gold, which has one of the largest non-producing projects in West Africa. The project is called SMSZ, which stands for Sengegal-Mali-Shear-Zone. The property covers an area of 440 sq km and is located in the vicinity of 4 large Tier-1 gold mines owned by producers such as B2 Gold, Barrick Gold or Allied Gold. The area is particularly attractive because gold deposits are close to the surface, resulting in low extraction costs.
To date, 24 gold zones have been identified on the SMSZ property. Only 5 of these identified zones are responsible for the current mineral resource of approximately 1.1 million ounces of gold. Planning for the next steps is underway. A strategic investor is being sought with whom initial gold production can be initiated in the Barani East Zone by means of heap leaching. The feasibility study should be completed in the first half of 2024. If this is successful, starting production in the second half of 2025 should be possible. At the same time, a 30,000 m drilling program is to be launched next year in order to increase the mineral resource to a suitable 2 million ounces of gold.
In the middle of the year, the Company appointed Doug Engdahl, an expert in the field of mineral exploration, to the Board of Directors. He will support the Company with his knowledge in the further development of the SMSZ project and can certainly open some doors with his extensive network. Further information on the Company can also be found in the latest study by researchanalyst.com. At a current share price of CAD 0.04, the Company has a fully diluted market capitalization of just CAD 10.3 million. This low valuation could prompt the major gold producers to launch a takeover attempt.
Bitcoin Group - Benefits from the new crypto boom
The world of finance has undergone a revolution with the emergence of cryptocurrencies, which are often compared to gold as a traditional store of value. This is why cryptos are often referred to as digital gold. The comparison between cryptocurrencies and gold is particularly fascinating, as both share certain characteristics that distinguish them from fiat money as potential stores of value. Ultimately, the potential returns, but also the risks, are higher for cryptocurrencies. Since the beginning of October, the Bitcoin price has peaked at 66%. This has also had a positive effect on Bitcoin Group's business.
The Company is active in the areas of cryptocurrencies and blockchain. The best-known business area is probably the trading platform for digital currencies, bitcoin.de. After the price of cryptocurrencies crashed in 2022, 2023 was a tough affair for a long time. This can also be seen in the half-year figures, where revenue remained virtually unchanged at EUR 5.62 million. EBITDA amounted to EUR -0.56 million and was significantly weaker than in 2022 at EUR 2.74 million. However, the key figure would have been positive had it not been for the extraordinary costs of EUR 2.62 million for the integration of "von der Heydt Bank".
The second half of the year is likely to be significantly better due to the high volatility of the crypto markets. The Company's crypto holdings are likely to be significantly higher than on June 30. At that time, the value was EUR 121.86 million. Assuming a conservative increase of 50%, the stocks should currently stand at around EUR 180 million. For a long time, the share traded below the value of its crypto holdings. Since December 19, the share price has risen by 56% within 4 days. The share has recently lost some of its high and currently stands at EUR 36.60. The analysts at GBC see a price target of EUR 55.
In times of geopolitical tensions, aggressive central bank policies, high inflation and other uncertainties, people seek safe havens. In this regard, gold is the primary choice. Barrick Gold is a blue chip among gold stocks, pays a dividend and can benefit from the rising copper price in the future. An alternative would be Desert Gold, which holds significant potential with its SMSZ project. The share price could quickly double if there is a takeover in the pipeline. Cryptocurrencies are an alternative for risk-averse investors. If one prefers not to bet on individual securities, the Bitcoin Group is worth considering, as it earns a share with every transaction through its crypto trading platform.
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 hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.
In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
For this reason, there is a concrete conflict of interest.
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