Barrick Gold, First Nordic Metals, Commerzbank – The gold rally is fueled by falling interest rates

Barrick Gold – Challenges in Mali weigh on operations

Barrick Gold is struggling with problems in Mali that could affect the Company's operations. Relations with the Malian government remain tense due to allegations of tax evasion. In addition, the Company has had USD 250 million in gold reserves seized, and an international arrest warrant has been issued for CEO Mark Bristow. Since January 28, negotiations between the two parties have resumed. Analysts expect that this situation in Mali could cost Barrick around 11% of total revenue. If the new negotiations do not lead to a result, the Loulo-Gounkoto mine, one of the Company's most profitable projects, could be placed into care and maintenance indefinitely.

Despite the difficulties in Mali, Barrick is showing its strong side in other areas. The Company is investing in sustainable solutions through local education and health projects and the expansion of renewable energies. In addition, the gold price boom is improving financial stability. Dividends are paid consistently; last year, they yielded a return of around 2.42% with a payout of EUR 0.37. The price-to-earnings (P/E) ratio is around 17, while the average for stocks traded on the NYSE is over 26. For the coming year, P/E estimates are only around 14.4.

With a clear strategy for the future and production increases, Barrick is optimistic about 2025. Increased gold production, particularly from projects in stable regions such as North America, should drive growth. At the same time, a stabilization of the political situation in Mali could provide positive impetus. Analysts continue to rate the Company as undervalued and expect the share price to rise, especially if the gold price remains at a high level. Revenues are expected to reach USD 15.3 billion, and EBITDA is expected to climb to over USD 6 billion. The share is currently trading at USD 15.96.

First Nordic Metals – Scandinavian gold project

First Nordic Metals (FNM) was formed from the merger of Barsele Minerals and Gold Line Resources and focuses on the Nordic countries in Europe, where large gold deposits are located. The Company owns several properties in Sweden and Finland, benefiting from attractive tax models and a secure jurisdiction. The flagship "Barsele" project in Sweden has 2.4 million ounces of gold indicated & inferred categories and is explored in collaboration with Agnico Eagle. The property is the largest undeveloped gold deposit in the country. The simple metallurgy and the ability to extract up to 96% of the gold should reduce costs. In addition, the deposit remains open in all directions, which is why there is significant upside potential.

The Company intends to conduct deeper drilling and expects the mineral resource to increase by at least an additional 1.5 million ounces. Further upside potential is offered by the Company's adjacent Storjuktan and Paubäcken properties, which lie along the same gold-line belt as the Barsele project. Slightly apart from the flagship project, there is also the Klippen property.

In addition to the projects in Sweden, FNM's Oijärvi project in Finland also offers opportunities. The Kylmäkangas deposit is based on high-grade gold-silver mineralization along a 1.5-kilometer-long shear zone corridor and has so far only been developed superficially. Previous drilling achieved remarkable results, including peak grades of 23 g/t gold and 126 g/t silver over 11 m. Geophysical surveys and potential extensions along parallel shear zones could unlock further resources. With an experienced management team and a strong investor base, the Company has the long-term opportunity to become a gold producer. The stock recently broke the 2024 annual high and is currently trading at CAD 0.45.

Commerzbank – In the takeover battle

It is well known that Commerzbank is interest-sensitive, as these revenues are traditionally its primary source of income. Further interest rate cuts in the US do not directly affect Commerzbank, but it is likely that the European Central Bank (ECB) will also lower key rates. Analysts warn that the lower interest rates could weigh on net interest income. Due to these uncertainties, the bank is striving for stability in this area, supported by strategic adjustments and the diversification of its revenue sources. Currently, however, the share is mainly in the spotlight because of the takeover rumors.

The major Italian bank UniCredit has increased its stake in Commerzbank to around 28%, making it the largest shareholder. After the German government has so far rejected a sale, the outcome of the federal election on February 23 could be decisive for further developments. UniCredit's CEO Andrea Orcel recently emphasized that his company would not pursue a takeover at any price. Clarity should prevail by the end of 2025. The management of Commerzbank recently even declined an invitation to talks from UniCredit and classifies a potential offer as "hostile". However, if the Italians have a formal proposal, they are willing to talk.

Commerzbank is planning far-reaching measures to ensure its independence. Costs are to be reduced through job cuts and greater use of digitization, with the possibility of relocating individual tasks abroad. In addition, the bank is counting on a sharper increase in fee income, which is to play a central role in the new strategy. A key step will be the presentation of medium-term improvements at the Capital Markets Day on March 13, when forecasts for the period after 2027 will also be published. Investors are buying the stock, which is currently trading at EUR 18.45, in anticipation of a takeover bid from UniCredit.

Falling interest rates should strengthen the gold markets, favoring gold producers like Barrick Gold. Although Barrick Gold is facing challenges in Mali, the outlook for the future is positive. First Nordic Metals benefits from rising gold prices, as this makes existing gold resources more valuable. If the acquisition of the Barsele project is successful, there is high upside potential. In the banking sector, Commerzbank is the focus of attention due to takeover rumors by UniCredit. Possible interest rate cuts are not important at the moment.