19. July 2021 | 11:05 CET
Barrick Gold, GSP Resource, SMA Solar - Buy Prices?
Raw materials and energy are central prerequisites for our life as we know it not to stand still. Often it is only when there are supply bottlenecks and significant price jumps that we become aware of the importance of what is suddenly no longer readily available. Due to their fundamental importance, commodities and energy are therefore forward-looking investment themes. We present three exciting companies. Who will win the race?
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ISIN: BARRICK GOLD CORP. | CA0679011084 , GSP RESOURCE CORP. | CA36249G1090 , SMA SOLAR TECHNOL.AG | DE000A0DJ6J9
"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
BARRICK GOLD CORP - Preliminary production data: On track
Barrick Gold announced its preliminary production results for the second quarter of the current fiscal year a few days ago. The world's second-largest gold producer, which owns numerous copper projects, produced 1.04 million ounces of gold and 96 million pounds of copper in Q2. In addition, the Canadians were able to sell 1.07 million ounces of gold and 96 million pounds of copper. The average market price for gold during the quarter was USD 1,816 per ounce, while the average market price for copper was USD 4.40 per pound.
The preliminary key figures put the Group fully on track to achieve its 2021 guidance. Business was particularly good in Africa, the Middle East, Latin America and Asia-Pacific, where the upper range of guidance looks set to be achieved. Only the North American region is currently expected to reach the lower end of the Company's guidance range.
Preliminary second-quarter gold production was down from the previous quarter's 1.1 million ounces, with planned maintenance shutdowns at Nevada Gold Mines' processing facilities further impacted by a mechanical mill failure at Carlin's Goldstrike roasting plant and planned maintenance at Pueblo Viejo. However, Barrick expects gold production in the second half of 2021 to be higher than in the first half. Analysts, on average, recommend buying the stock with an upside potential of 38%. The 2022 P/E ratio of the stock is currently 16. It is interesting to compare the stock to competitors and the price of gold over the past 12 months. The price of the precious metal is almost unchanged. While competitors lost about 18% within the last 12 months, Barrick shares lost 22%.
GSP RESOURCE CORP - First tranche of private placement closed
GSP Resource is a Canadian mineral exploration and development company focused exclusively on southwestern British Columbia. It wholly owns the Olivine Mountain Project and holds an option to acquire 100% of the Alwin Mine. Advantageously, both projects are geographically close to already producing mines. In addition, management has a good track record and has proven in the past that it has been able to achieve noticeable increases in value for shareholders. Currently, shareholders can still get involved with the Canadians at a very early stage. The Company is currently a real stock market minnow with prices around CAD 0.24 and a market capitalization of CAD 5 million. Recently, GSP announced that it had closed the first tranche of the private placement of approximately CAD 350,000 at a price of CAD 0.35 and a half warrant with a 3-year term and strike price of CAD 0.50.
A major value enhancement lever for GSP shareholders could be the option to acquire 100% interest in the Alwin Mine, a copper-gold-silver project. The 575-hectare property features a historic underground mine. The mine was developed to a depth of 300m over a length of 500m and a width of 200m. It produced approximately 233,100 tonnes of material between 1916 and 1981, which in turn produced 3,786 tons of copper, 2,729 kilograms of silver and 46.2 kilograms of gold! The Alwin mine is adjacent to the Highland Valley mine of industry giant Teck Resources to the west. The Highland Valley mine is considered the most effective copper mine in Canada at a grade of less than 0.5%. Recently, a 3D model was created for the Alwin property, which showed that quite a few underground structures exist. The results were used to define the drill targets. The drill program was started in early June, and GSP Resource expects results by August at the latest. The Olivine Mountain project also has great potential. The 3,020-hectare property is located just 25km from Copper Mountain's copper mine and less than 50km from Westhaven Ventures' Shovelnose project and Kodiak Copper's MPD project. GSP is still in its infancy. For investors willing to take risks, the stock is worth a look. The risk should be rewarded handsomely in the case of success. Drilling results are expected in a few weeks.
SMA SOLAR TECHNOLOGY AG - Analysts: Solar expert's valuation too low
And how does SMA Solar fit into the picture at this point? When looking at the big picture, there are several intersections between precious metals such as gold and silver, industrial metals (especially copper) and renewables. SMA Solar plays a special role in the value chain. SMA's portfolio includes a wide range of efficient solar inverters and holistic system solutions for photovoltaic systems of all power classes, intelligent energy management systems and battery storage solutions, and total solutions for PV-diesel hybrid applications. As one of the few globally leading specialists for photovoltaic system technology, the Group is thus creating the basis for the decentralized and renewable energy supply of tomorrow. Digital energy services and comprehensive services up to the assumption of operation management and maintenance services for photovoltaic power plants are also part of the range of products and services. SMA inverters with a total output of more than 100 GW are installed in over 190 countries worldwide. At prices around EUR 43, the TecDAX Company is currently valued at EUR 1.5 billion. On average, analysts believe the stock has an upside potential of 25%.
Billion-dollar company or micro-cap? Either or, or both? The answer to these questions is up to each investor. Each of the three stocks discussed is full of opportunities. If you want to invest in an established gold and copper producer to profit from higher commodity prices in the long term, Barrick is the right stock for you. Speculative natures, on the other hand, could get the right kick with GSP Resource. SMA Solar is a promising investment in the field of solar energy, with analysts' upside potential set at 25%.