November 28th, 2024 | 07:15 CET
Barrick Gold, Desert Gold, Novo Nordisk - How political decisions and market opportunities drive prices
The capital markets are again demonstrating how closely intertwined political decisions, external market factors, and entrepreneurial skills are. The planned expansion of Medicare and Medicaid coverage of obesity drugs could open up new growth prospects for the Danish pharmaceutical giant Novo Nordisk in the US. However, the wind of change is blowing in the direction of a new administration with a strong reputation in the US healthcare sector. Industry giant Barrick Gold shines with impressive numbers, with operating cash flow alone at USD 23 billion. Meanwhile, explorer Desert Gold is securing fresh capital through clever financing for its promising SMSZ gold project in Mali, Africa. Here is what investors should be looking out for now.
time to read: 4 minutes
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Author:
Juliane Zielonka
ISIN:
BARRICK GOLD CORP. | CA0679011084 , DESERT GOLD VENTURES | CA25039N4084 , NOVO NORDISK A/S | DK0062498333
Table of contents:
"[...] We have built one of the largest land packages of any non-producer in the belt at over 440 sq.km and have made more than 25 gold discoveries on the property to date with 5 of these discoveries totaling about 1.1 million ounces of gold resources. [...]" Jared Scharf, CEO, Desert Gold Ventures Inc.
Author
Juliane Zielonka
Born in Bielefeld, she studied German, English and psychology. The emergence of the Internet in the early '90s led her from university to training in graphic design and marketing communications. After years of agency work in corporate branding, she switched to publishing and learned her editorial craft at Hubert Burda Media.
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Barrick Gold impresses with a strong balance sheet and growth projects
The gold mining and production company Barrick Gold is in excellent shape. At an investor conference in New York, CEO Mark Bristow gave an extremely positive summary of the past few years. Since the last major merger, the Company has generated an operating cash flow of USD 23 billion and invested USD 15 billion in the Company's future.
The solid financial policy is paying off: net debt fell by almost USD 4 billion, while shareholders shared in the success with distributions of more than USD 5 billion. Bristow emphasizes that the investments made will secure production for at least ten years – an important aspect for long-term planning.
A particular highlight is the Fourmile project, which is wholly owned by Barrick. Initial economic analysis indicates that operational cash flows could exceed those of the already successful neighboring Goldrush project by at least 70%. The other mine expansions in Nevada, including Leeville, Hanson, Robertson, Swift and Turquoise Ridge, are also developing well.
Desert Gold secures millions in financing as gold prices rise
Desert Gold Ventures Inc. is securing a significant inflow of capital in a market environment characterized by record gold prices. The Company has raised CAD 1.26 million through the exercise of 15,728,571 warrants to raise CAD 1.26 million. These funds will be used primarily for the development of the flagship SMSZ project in West Mali and for general working capital.
The timing of the financing appears favorable as the gold price has performed remarkably well this year. In the eurozone, gold is up 33% year-to-date and recently reached a new all-time high at EUR 2,607.99 per troy ounce. This development is mainly driven by the weakness of the euro and geopolitical uncertainties.
Under the incentive program that Desert Gold Ventures previously announced in September and October 2024, participating holders received additional warrants in the same amount. These new warrants can be exercised at CAD 0.08 per share for a period of three years. A special clause allows the Company to accelerate the maturity with 30 days' notice if the share price on the TSX Venture Exchange is at or above CAD 0.20 for ten consecutive trading days.
Desert Gold Ventures Inc. controls the 440 km2 SMSZ project in western Mali. Measured and indicated mineral resources total 8.47 million tonnes, grading 1.14 g/t Au for a total of 310,300 ounces. Inferred Mineral Resources are estimated at 20.7 Mt grading 1.16 g/t Au for a total of 769,200 ounces.
The successful completion of the warrant program strengthens the Company's financial position in a market environment characterized by rising gold prices and robust demand.
Biden plan boosts Novo Nordisk - Shares rise sharply
Pharmaceutical companies Novo Nordisk and Eli Lilly are seeing significant share price gains following a landmark proposal by the US government to cover the costs of obesity drugs. According to Reuters, Novo Nordisk's shares rose by 4.9% at times, while Eli Lilly's shares rose by more than 3%.
Outgoing US President Joe Biden plans to significantly expand coverage of obesity drugs in the state health programs Medicare and Medicaid. For millions of Americans, co-payments for these drugs could decrease by up to 95%. The new regulations could take effect in 2026. However, this measure does not address the root of the problem: unhealthy diets, lack of exercise and portion sizes have led many Americans to obesity.
The stock market, on the other hand, is pleased. Even at the expense of the competition, the positive market reaction was further strengthened by disappointing study results from competitor Amgen. Its experimental drug MariTide only achieved an average weight reduction of up to 20% in a phase II study – a figure that fell short of market expectations.
Alexander Jenke, Portfolio Manager at Medical Strategy in Munich, sees the planned expansion of coverage as a logical consequence of the positive study results, particularly regarding the cardiovascular benefits of Novo Nordisk's Wegovy. However, he points out the uncertainty regarding how future US governments will deal with this policy. What also remains in the dark: long-term studies. These do not yet exist due to the approvals of the two active ingredients. US President-elect Donald Trump has also appointed the health economist Dr. Jay Bhattacharya, a critic of pandemic lockdowns and vaccine mandates, as Head of the National Institutes of Health, the country's leading medical research agency. This appointment will undoubtedly shake up the US pharmaceutical market.
I am honored and humbled by President @realDonaldTrump's nomination of me to be the next @NIH director. We will reform American scientific institutions so that they are worthy of trust again and will deploy the fruits of excellent science to make America healthy again! https://t.co/FrLmYznhfw
— Jay Bhattacharya (@DrJBhattacharya) November 27, 2024
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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