Close menu




August 20th, 2021 | 12:44 CEST

Barrick Gold, Desert Gold, K+S - Dark clouds everywhere?

  • Gold
Photo credits: pixabay.com

Since the publication of the July minutes of the FED meeting, the indices have been going down. Investors do not like that the minutes held out the prospect of a possible end to the financial stimulus at the end of the year. The inflation rate in the US was 5.4%, as in the previous month, and currently remains high. Following the port closure in China, it can be assumed that supply chains will continue to be disrupted. In addition, the Delta variant is causing rising incidences. Therefore, the market is currently nervous and anticipates a possible correction. Gold is still popular as an inflation hedge. We look at three companies today and see if dark clouds are gathering there too.

time to read: 3 minutes | Author: Armin Schulz
ISIN: BARRICK GOLD CORP. | CA0679011084 , DESERT GOLD VENTURES | CA25039N4084 , K+S AG NA O.N. | DE000KSAG888

Table of contents:


    Jared Scharf, CEO, Desert Gold Ventures Inc.
    "[...] Our SMSZ project is the largest contiguous land package of any exploration company in the region at 400km2 and overlays a 38km portion of the prolific Senegal Mali Shear Zone. [...]" Jared Scharf, CEO, Desert Gold Ventures Inc.

    Full interview

     

    Barrick Gold - Currently in a downward trend

    At Barrick Gold, light and dark alternate. The quarterly figures were decent, with a net income of USD 513 million compared to USD 415 million year-on-year. Very positive considering that production was down by more than 100,000 ounces due to a machine failure. So the high gold price more than compensated for this decline. On a less positive note, the cost per ounce increased by USD 56 year-on-year to USD 1,087.

    The Company also owns large copper deposits, which puts it in a somewhat more diversified position for the future. In addition, Barrick is investing heavily in developing new gold deposits to build up its reserves for the coming decades. The results of the Brownfield project will more than compensate for the resources mined this year. The Company has also become more geographically diversified.

    For shareholders, there is a special dividend of USD 0.42 this year in addition to the regular dividend of USD 0.36. Management has raised the dividend sharply in recent years. Nevertheless, it was recently announced that billionaire Druckenmiller sold over 3.6 million shares. Perhaps one of the reasons why the stock has not taken off, despite the recent rise in gold. Currently, one should wait until the share leaves the downward trend channel.

    Desert Gold - Waiting for news

    2020 was the year for Desert Gold and its shareholders. The stock marched from CAD 0.05 to CAD 0.35. A consolidation followed this to CAD 0.12 by the end of October 2020. Since then, a sideways phase has formed between CAD 0.12 and CAD 0.23. Currently, the share can be bought for about CAD 0.14. People are eagerly awaiting the completion of the drilling program, which was targeted for the end of July.

    The Company has already located gold deposits with the SMSZ project in Mali with values of 6.28 g/t gold. At 410 sq km, the property is the only non-producing area. The project is surrounded by major mines and gold producers such as Barrick Gold and B2 Gold. With the completion of the drilling program, news can be expected, and if they turn out to be as good as last year in the approach, you know what potential lies in the stock.

    The last news on June 22 reported the completion of more than 82% of the planned drill program with over 230 holes. Since then, investors have been waiting for more news. We expect completion in the coming weeks. Once all results are in, a NI 43-101 resource estimate will be made, which will allow the Company's potential to be quantified even more precisely.

    K+S - Good figures and debt repayment

    Since the price of potash has been higher than it has been for a long time, K+S has been developing very well. With the announcement of the half-year figures, even the annual forecast was adjusted upwards. No wonder because EBITDA was increased by 50% compared to the same half of the previous year, and costs were reduced at the same time. CEO Dr. Lohr expects EBITDA to be between EUR 700-800 million at the end of the year. Looking at the EBITDA of EUR 267 million in 2020, one can see how good the results will be this year.

    The share recently came under pressure after BHP announced its intention to open a potash mine in Canada. However, production is not scheduled to start until 2027, so this news should not be taken too seriously. That is also the view of competitor Nutrien's CEO, who went on record saying, "It will take another decade for Jansen to have significant production." The industry expects growth of 2-3% per year through 2030.

    The main problem with the group remains its debt mountain. The sale of the salt business in the US brought in EUR 2.6 billion, pushing the debt-to-earnings ratio down to a factor of 2, which is a big step towards more relaxation. The share has lost more than EUR 2 from its high of EUR 13.35 for the year. A double bottom seems to be forming at EUR 10.92, which is a bullish sign. Kepler Cheuvreux considers the fair value of the share at EUR 22.


    The producers of commodities are doing well. As an investor, one should pay attention to the chart technique, as not all good figures result in a price gain at the same time. Barrick Gold looks undervalued at the current level. With Desert Gold, you have to keep an eye on the news to get in quickly if the results are promising. K+S is still in an uptrend; after the sell-on-good-news and the message of the competition, the rebound should succeed with a double bottom.


    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

    Armin Schulz

    Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.

    About the author



    Related comments:

    Commented by Fabian Lorenz on December 1st, 2022 | 11:55 CET

    Comeback stocks: Nel, Aurora Cannabis, Barrick Gold, Tocvan Ventures

    • Mining
    • Gold
    • Hydrogen
    • Cannabis

    Gold, cannabis and hydrogen could be among the top trends of the coming year - also on the stock market. Due to full order books, Nel could be poised for a comeback in 2023. At least sales are already secured until mid-2024. Now, all that is left is to cut the loss to reach analysts' price targets. Aurora Cannabis has largely completed its turnaround and is also hoping for legalization in Europe and the US. Driven by a strong gold price, mining stocks have already jumped. Now exploration companies should follow. Tocvan Ventures is one of them. And with the gold explorer, investors can look forward to a regular news flow in the coming year. Are the three candidates comeback stocks in 2023?

    Read

    Commented by Stefan Feulner on December 1st, 2022 | 09:46 CET

    BYD, Auxico Resources, Hensoldt, Rheinmetall - Prepared for the future

    • Mining
    • Gold
    • RareEarths
    • Defense

    Russia's invasion of Ukraine at the end of February this year changed everything. While global stock markets fell into a state of shock, shares in defense companies boomed. With the arms buildup in the Western world, the future looks bright for companies that were still viewed critically before the war of aggression. However, in order to produce enough tanks, aircraft and other war equipment, the industry needs a variety of critical metals for which demand already exceeds supply.

    Read

    Commented by Stefan Feulner on November 22nd, 2022 | 13:42 CET

    Favorable starting positions for Commerzbank, Desert Gold and BioNTech

    • Mining
    • Gold
    • Investments
    • Biotechnology

    The suspected downward pressure due to uncertainties in the economy and geopolitics has so far failed to materialize. Instead, the most important stock indices, such as DAX or Dow Jones, were able to leave their short-term downward trends and are sending signals for a further upward push. In addition to the stock market, the precious metals sector was also able to turn around. Here, in particular, entry opportunities beckon at a significantly reduced level with the chance of long-term, disproportionate price gains.

    Read