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March 25th, 2020 | 08:04 CET

Barrick Gold, Desert Gold Ventures, Yamana Gold - all eyes on gold

  • Gold
Photo credits: pixabay.com

The decade without recessions in Canada, Germany and the USA was hardly over when a mixture of different problems and shocks hit the people, politics and economy. The price of WTI oil collapsed to a historic low of around USD 20.00 per barrel, the US dollar gained dramatically in strength and the corona virus caused curfews, disruptions in supply chains and a slump in demand. The central banks in North America and Europe are taking measures to increase liquidity and the Trump Administration is determined to help citizens with 'helicopter money'.

time to read: 2 minutes | Author: Mario Hose
ISIN: CA0679011084 , CA25039N4084 , CA98462Y1007

Table of contents:


    Panic causes a sellout

    The volatility on the stock markets has been as high in recent weeks as it was during the financial crisis. The power with which the spread of COVID-19 caused panic on the capital markets was unprecedented. Within a few weeks, the S&P 500 Index fell by 30%. During the financial crisis from 2008 onwards, the index of the largest 500 US companies needed around 250 days for a comparable correction.

    In the weeks following the Lehman bankruptcy, most asset classes sold out. The gold price also came under pressure, as did the share prices of producers and explorers. Only after a few weeks was the selling pressure over and the gold price rose from around USD 700.00 per troy ounce in October 2008 to over USD 1,900.00 in August 2011.

    Money supply is increasing

    Whether the financial institutions will continue to falter with their customers during the Corona Crisis will become clear in the coming days and weeks. The faster the pandemic can be stopped, the less damage will be caused.

    However, the measures taken by governments and central banks will lead to an increase in the money supply and inflation is likely to rise accordingly. For this reason, the price of gold is expected to rise in the coming weeks, as the precious metal is considered a safe haven by investors. As a result, the companies in the gold industry should also become the focus of investors' attention.

    Value creation of gold

    Well-known companies such as Barrick Gold and Yamana Gold are broadly based and often the first choice of investors. Barrick's market capitalization is approximately CAD 44.9 billion and Yamana is currently valued at CAD 4.0 billion. Investors who wish to invest in a gold company at the exploration stage to benefit from new discoveries should take a closer look at Desert Gold Ventures. The Company is active in Mali and holds exploration rights for approximately 400 square kilometres near the border with Senegal.

    The market value of Desert Gold is approximately CAD 7.5 million. Given that the Company has already discovered zones of 6.3 g/t Au over 13 metres, 3.03 g/t Au over 10 metres and 2.04 g/t Au over 30 metres, there is a possibility that the discovery of additional resources will increase the value of the Company. Once a critical mass of data on the gold occurrences in the areas is reached, a take-over by a major gold producer is likely.

    A region with great potential

    The West of Africa has extensive gold deposits. In 2018, Mali was the fourth largest gold supplier in all of Africa with a production volume of 2.14 million ounces. In total over 35 million ounces of gold reserves have already been measured or proven in Mali. Besides Desert Gold, the producers B2Gold, Barrick and Endeavour Mining are also active in Mali.

    At the beginning of the week Endeavour announced the acquisition of Semafo. The merger will now create a gold producer that will be among the top 15 worldwide, with a total of six mines in Burkina Faso and the Ivory Coast. This transaction puts the region once again in the spotlight. In 2020, the new Endeavour plans to produce 1 million ounces of gold. Desert Gold is obviously located in an interesting region.


    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.

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    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.

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    Der Autor

    Mario Hose

    Born and raised in Hannover, Lower Saxony follows social and economic developments around the globe. As a passionate entrepreneur and columnist he explains and compares the most diverse business models as well as markets for interested stock traders.

    About the author



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