Close menu




May 10th, 2023 | 09:20 CEST

Barrick Gold, Globex Mining, Deutsche Bank - Gold in rally mode

  • Mining
  • Gold
  • Silver
  • Banking
  • Investments
Photo credits: pixabay.com

The turmoil in the banking industry has recently hit Western Alliance Bancorporation. With the demise of Silicon Valley Bank, the gold price gained momentum and is heading for its all-time high. The constant increase of the money supply by the central banks and the threatening insolvency of the US support the gold price just as much as the gold purchases from China. In April, China collected another 8.1 tonnes of gold, about 10 tonnes less than in the previous month. In Q1, gold purchases by central banks were at record levels. Good for gold producers and explorers. We look at two today and see if Deutsche Bank has recovered after the turmoil.

time to read: 4 minutes | Author: Armin Schulz
ISIN: BARRICK GOLD CORP. | CA0679011084 , GLOBEX MINING ENTPRS INC. | CA3799005093 , DEUTSCHE BANK AG NA O.N. | DE0005140008

Table of contents:


    Justin Reid, President and CEO, Troilus Gold Corp.
    "[...] Troilus has the potential to be an entire gold belt. All of our work to date points to this, and each drill hole makes the picture we have of the Troilus project much clearer. [...]" Justin Reid, President and CEO, Troilus Gold Corp.

    Full interview

     

    Barrick Gold - Disappointing first quarter

    Rising gold prices play into the hands of one of the largest gold producers Barrick Gold, especially when looking at the figures for the first quarter. Gold production fell to 952,000 ounces compared to both the last quarter and the previous year. While production declined, the cost of an ounce of gold rose to USD 1,370, compared to USD 1,164 last year. A similar picture is shown by copper, where 88 million pounds were produced, and there too, the costs rose to USD 3.40. In the previous year, 101 million pounds were produced at USD 2.85. Adjusted earnings were USD 0.14 per share.

    Despite the weak figures, management is sticking to its forecasts. Production will pick up again, especially in the 2nd half of the year. The Pueblo Viejo expansion should be completed soon. The Porgera mine is expected to resume operations, and the optimization of the Wangima mine will also ensure higher production. As inflation is also declining and energy costs are currently falling, these effects will positively impact costs. The completion of a solar project should also reduce costs.

    Margins should improve, and production should increase from the second half of the year. CEO Mark Bristow recently said that the Company is looking for gold and copper deposits but that these do not necessarily have to come from acquisitions. There is currently little reason for investors to worry, especially thanks to the higher gold price. The Company will pay a dividend of USD 0.10 for the first quarter. The share has hardly suffered from the weak quarterly figures and is trading at USD 19.85.

    Globex Mining - Annual revenues from the Silidor Gold Project

    Globex Mining (Globex) acquires mineral properties and increases their value through exploration, options or joint ventures. The Company owns over 200 land parcels with a broad portfolio of precious metals, base metals and specialty metals and minerals in Canada and the US with resources, mineralized drill intercepts and untested geophysical targets. By optioning the properties for cash and shares, Globex also receives future royalties when the deposits are mined. The beauty of the business model is that the option partners assume the exploration risk, while Globex either benefits from potential future production revenues or receives more accurate data on the project.

    On May 4, the Company announced that it had contracted Geotech Ltd to conduct a 171 km aerial electromagnetic and magnetic survey on the Tyrone property in Quebec. The Tyrone property is located between Azimut Exploration's and KGHM International's properties. Azimut describes its Kukamas property as a promising area of copper-gold mineralization. Globex's Tyrone project contains surface showings of up to 47.2 g/t gold, 108 g/t silver, 10.96% copper, and iron. A further exploration programme is planned this summer. If the results are positive, the property could be considered for acquisition.

    There is good news from the Silidor Gold Project. The local company Agrégat RN Inc. has started mining material there. Globex will receive an advance of CAD 150,000 on the first 300,000 t, after which CAD 0.25 per t will be due. CEO Jack Stoch expects annual revenues of between CAD 400,000 and 500,000 per year. Due to the large number of projects being worked on, there is constant newsflow. Now that gold is rising in price, Globex's assets automatically become more valuable. At the beginning of the year the share price was still at CAD 0.68; now it is priced at CAD 0.83 per share.

    Deutsche Bank - Strong start to the year

    Turbulence in the banking sector? Germany's largest bank, Deutsche Bank, has had its best start in 10 years, according to its Q1 financial results. Pre-tax profit rose 12% to EUR 1.85 billion, the bank's best quarterly result in a decade. Net interest income also rose sharply by almost 20% to EUR 3.4 billion, while total revenues increased by 5% to around EUR 7.7 billion despite a decline in investment banking revenues. In addition, Deutsche Bank set aside EUR 372 million for potential credit losses, over 25% more than in the previous year.

    Despite the good results, Deutsche Bank CEO Christian Sewing wants to push through further cost reductions of EUR 2.5 billion. Among other things, about 5% of management staff will be cut. Last week, the group announced the takeover of Numis, a company broker from Great Britain, for USD 500 million. This is intended to strengthen investment banking and secure access to the corporate client network of the British.

    The annual general meeting will take place on May 17. Here, the management will undoubtedly give an update on the year to date. With the early repurchase of 6 bonds, the bank is sending a signal of strength. The quarrels surrounding Western Alliance Bancorporation have also put Deutsche Bank shares under pressure, but the support zone at EUR 9.21 has held. The stock is currently trading around EUR 9.63. At the beginning of May, Goldman Sachs issued a 'Buy' recommendation with a target price of EUR 19. Barclays, on the other hand, recommended 'Hold' with a target price of EUR 12.


    Due to the exponentially increased money supply since the financial crisis in 2008, money is perceived to be worth less, which is also evidenced by the current inflation. For many investors, gold is a safe haven in times of uncertainty. Barrick Gold is benefiting from this, even though costs have risen recently and production has even declined. Globex Mining alone has 114 precious metal projects that could yield royalties in the future. Another 107 properties offer everything needed for the energy turnaround. There is potential here. Deutsche Bank also appears undervalued compared to the competition, with a price-earnings ratio of 5.


    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.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided 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 Juliane Zielonka on May 17th, 2024 | 07:00 CEST

    Almonty, Rheinmetall, Super Micro Computer - Commodity rally for defense and cloud

    • Mining
    • Tungsten
    • AI
    • Defense

    AI and defense stocks are setting the stock market on fire. Investors worldwide seem to have acquired a taste for artificial intelligence and defense. Wall Street is expecting a four-digit price target for Super Micro Computer soon. Rheinmetall is also enjoying full order books. Since the takeover of a Spanish ammunition manufacturer, production has also increased in this segment. Meanwhile, tensions between the largest economies, the USA and China, are growing enormously, which is reason enough for investors to take a look at Almonty Industries. The tungsten producer is on course for growth thanks to the restart of a mine in South Korea. Tungsten is rising in value as the increase in AI, and armaments are directly boosting demand for the rare earth metal. Who will win the stock market race?

    Read

    Commented by André Will-Laudien on May 16th, 2024 | 07:00 CEST

    Attention: Here we go! Hydrogen and uranium on the rise: Plug Power, Nel ASA, Kraken Energy and Siemens Energy in focus

    • Mining
    • Uranium
    • Hydrogen
    • renewableenergies
    • Energy

    It has finally happened! After months of sell-offs in hydrogen shares, there was a sigh of relief across the sector the day before yesterday. The reason: industry leader Plug Power received a government guarantee of USD 1.66 billion as backing for the construction of six-megawatt sites nationwide to create an initial hydrogen infrastructure. The Department of Energy (DOE) is thus demonstrating that the US is serious about investing in alternative energies. The decision boosted the entire energy sector, with uranium also continuing its recent upward trend. Where do the opportunities lie for investors?

    Read

    Commented by Juliane Zielonka on May 16th, 2024 | 06:45 CEST

    Saturn Oil + Gas, RWE, thyssenkrupp - Full speed ahead in energy and heavy industry

    • Mining
    • Oil
    • Gas
    • renewableenergies

    The oil and gas industry has evolved significantly thanks to technological developments. The Canadian energy company Saturn Oil & Gas has already completed four successful wells in southeast Missouri, USA, in the first quarter of 2024, with promising results. Further strategic investments, such as the acquisition of assets and financing commitments, strengthen Saturn Oil & Gas as an industry leader. RWE reports positive quarterly results. Despite lower earnings in the 'Flexible Generation' segment, the Company is optimistic due to the expansion of renewable energy projects. Thyssenkrupp reported stable results in the second quarter, although order intake and sales were down compared to the previous year. CEO Miguel López emphasizes the progress made in Marine Systems. Despite challenges, thyssenkrupp is sticking to its forecasts. Where is an investment worthwhile?

    Read