February 11th, 2025 | 07:00 CET
Barrick Gold, First Nordic Metals, MicroStrategy – Profiteers in the bull market
The gold price is unstoppable and reached the USD 2,800 per ounce mark for the first time in its long history during the past trading week. In comparison, gold producers such as Barrick Gold or Newmont are trading well below their highs. However, should the underlying asset remain at this high level, the profits of precious metals companies are likely to skyrocket. By then, producers, as well as exploration companies, should start to catch up.
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Stefan Feulner
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Author
Stefan Feulner
The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
He is passionate about analyzing a wide variety of business models and investigating new trends.
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MicroStrategy – New name, new Bitcoins
MicroStrategy is now operating under the name "Strategy," and its logo has been updated with a Bitcoin symbol to emphasize the Company's clear business focus. Originally founded by Michael Saylor as a software manufacturer, the Virginia-based company has shifted its focus to investing in the world's largest cryptocurrency, Bitcoin. With the latest purchase of an additional 10,207 BTC at the end of January, 471,107 BTC are currently in the Strategy wallet, with an equivalent value of around USD 46 billion. However, the Company's market capitalization is USD 82.32 billion, representing a significant overvaluation.
In the case of rising crypto prices, Bitcoin enthusiasts are currently unconcerned; the stock often performs like a leveraged product in relation to the underlying asset. However, should a prolonged crypto winter with sharply falling BTC prices sweep the land, it wouldn't just be investors who get cold feet. Even crypto guru Saylor would face a serious problem here in saving his purchases, some of which were made with borrowed capital.
Currently, however, all is still well in the Strategy heaven. The weak quarterly figures with a loss of minus USD 3.03 per share could not dampen the mood. In the same period last year, the Company generated a split-adjusted profit of USD 0.58 per share.
Not only retail investors trust the world's largest Bitcoin hodler. Blackrock also increased its stake from 4.09% to 5%. Between September and December of last year, the world's largest asset manager acquired a further 1.78 million shares.
First Nordic Metals – New drilling program started
First Nordic Metals was one of the few companies to outperform the gold price in recent months. Since the interim low in May 2024, the Company, valued at CAD 137 million, has surged by over 400% and had a 181% share price appreciation in 2024 or a 368% in 2024 market cap growth. While it is still some distance away from its all-time high from 2017, given the Company's plans and vision, reaching that level in the medium term does not seem impossible.
The goal of the Canadian gold exploration company is clearly formulated: to create the next gold district in Europe, and the assets promise considerable potential. The main focus is on the Barsele project in northern Sweden, the country's largest undeveloped gold deposit with an indicated and inferred resource of 2.4 million ounces of gold, which First Nordic operates with a 45% stake in a joint venture with Agnico Eagle. A total of 165,936 meters in 453 holes have been drilled on the property to date, with Agnico Eagle investing USD 55 million in exploration so far.
In the immediate vicinity, also in the Gold Line belt, First Nordic Metals owns three further prospective projects, Paubäcken, Storjuktan, and Klippen, covering an area of 104,000 hectares. A drilling program of up to 180 drill holes has now been started at Paubäcken, during which extensive geochemical information is to be collected at the Harpsund and Brokojan target areas.
The drilling program at Paubäcken is of strategic value for the further development of First Nordic Metals, as the 100%-owned property lies between the Barsele project and the Svartliden mine and the Faboliden development project, both operated by Dragon Mining Ltd. The Svartliden mine was in operation from 2005 to 2015, and a total of 3.18 million tons of material with a gold content of 4.1 g per ton were processed there.
Barrick Gold – Increase in gold reserves
While the gold price is hitting one high after another, the share of the world's second-largest gold producer is trading at USD 17.04, around 83% off its all-time high from August 2020. However, this discrepancy is not unusual from a historical perspective. After an underperformance in the first upward cycle, gold producers and exploration companies only catch up after a prolonged bull market.
At the end of the week, Barrick Gold reported a 23% increase in its proven and probable gold reserves, which reached 17.4 million ounces at the end of 2024. This increase is primarily due to the Reko Diq copper-gold project in the Chagai district of Balochistan, Pakistan.
In the Africa and Middle East region, the Company's reserves increased slightly by approximately 1.1% to 19 million ounces in 2024, with contributions from the Loulo-Gounkoto mine in Mali and the Bulyanhulu mine in Tanzania. Barrick replaced more than 180% of its depleted gold reserves and added nearly 46 million ounces of attributable proven and probable reserves to its managed assets since the end of 2019.
Under its new name, Strategy, the Company continues to expand its Bitcoin holdings. Barrick Gold reported a 23% year-on-year increase in its gold reserves. First Nordic Metals launched another drilling program at the Paubäcken Project.
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.
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