May 18th, 2021 | 11:10 CEST
Barrick Gold, Kinross Gold, Sibanye Stillwater, Goldseek Resources - The Gold breakout!
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"[...] Both the geology and the infrastructure around the project make for a very attractive cost structure. We expect to be able to produce at 50% of the current gold price. [...]" Bill Guy, Chairman, Theta Gold Mines Limited
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Barrick Gold - The EUR 20 mark is made
During the Corona Crisis, many investors fled to the safe haven of gold. As a result, the price of an ounce of the precious yellow metal rose sharply again in May 2021. The all-time high from 2020 is now within reach. Mining can currently be driven again with slight restrictions, even to a new all-time high at over USD 2,000. On a twelve-month view, the gold price is now clearly in the focus of investors.
Although Barrick shares are currently among the best-performing gold stocks, CEO Mark Bristow complains that mining company investors appear to be "hysterically" chasing a quick buck. He sees the gold price currently supported by "irrational" behavior as a reaction to a pandemic-plagued economy. From this perspective, he should be pleased that his Company is in the gold investor spotlight.
Perhaps, after all, Mark Bristow's statements are intended as a side-swipe at Warren Buffett, who first euphorically jumped in and then dumped all his shares again in the fall of 2020. In any case, the Barrick share was able to regain the EUR 20 mark yesterday.
Kinross Gold - Small decline in production in Q1
Another well-known gold miner is Kinross Gold, a Canadian-based leading gold mining Company with mines and projects in the United States, Brazil, Russia, Mauritania, Chile and Ghana. Production reached over 2 million ounces in the 2020 pandemic year at a sustainable cost rate of USD 975, making Kinross one of the lowest-cost mid-tier producers in the world.
There was a bit of disappointment in the first-quarter numbers, however. Q1 US GAAP earnings rose 22% year-on-year to USD 149.5 million, or USD 0.12 per share, compared to USD 122.7 million, or USD 0.10 per share, in the same quarter of the previous year. Production decreased 2% year-on-year to 558,777 gold equivalent ounces due to lower production at the Tasiast and Round Mountain mines. Free cash flow fell 30% year-on-year to USD 75.6 million in the first quarter. We do not think that is a deal-breaker in a pandemic environment.
Kinross is currently on track to meet its fiscal 2021 production guidance of 2.4 million gold equivalent ounces, primarily due to expected higher production at Paracatu and Tasiast. The stock has turned around at EUR 6.17 and is now at EUR 6.54 - resistance at EUR 7.0 currently limits the chart to the upside.
Sibanye Stillwater - Another record result presented
The mining Company Sibanye Stillwater is active in precious metal mining in South Africa, the USA, Zimbabwe, Canada and Argentina. It is the world's largest producer of platinum, the second-largest producer of palladium, and the third-largest producer of gold. Sibanye was founded in 2002, and although it has a global presence, it has retained its headquarters in Weltevredenpark, South Africa.
The Company has undergone a significant balance sheet horse race over the last 4 years. Now, equity has been restored, and the Company is posting record quarterly results. Solid operating results from all segments were delivered with adjusted EBITDA up 78% to ZAR 19.8 billion or USD 1.3 billion. Q1 2020 pre-COVID production levels were slightly exceeded, with gold production up 5% to 249,392 ounces.
Sibanye Stillwater's fundamentals continue to be compelling at the start of the year. With the current trends in gold, silver, palladium and platinum, the outlook for the current year remains very positive. The share is currently trading stable at EUR 3.8 - the chart shows a quadrupling in 24 months. In our opinion, the story should continue to run well.
Goldseek Resources - Historic properties in top locations
In the slipstream of the big producers is the explorer Goldseek Resources. Explorers are currently gaining a lot of interest because they can quickly become the focus of larger interested parties in the upswing of precious metals. In a potential takeover, the buyer only pays the price for the resource estimate in the ground and does not have to take over any equipment or production facilities.
Goldseek has already announced excellent drilling results for this purpose. It currently owns five prospective projects, four of which are in the gold stronghold of Quebec and one property in Ontario. The Hemlo camp in Ontario is located just 4 km north of the Hemlo mine operated by Barrick Gold. One of the claims is also near Wallbridge Mining, which is following the Detour Gold trend.
Just 30 kilometers away from Fenelon is the Beschefer advanced exploration zone where drilling will now begin. The data review and 3-D modeling work will allow Goldseek to conduct the 5,000-meter "maiden" drill program in 2021, with the goal of resource definition in 2022. The B-14 zone is a large-scale structure located in a favorable gold environment with good continuity and high-grade mineralization. To date, it has only been tested by wide-area historical drilling with holes spaced 75 to 100 meters apart. Exciting results should be announced here in the coming months.
Goldseek Resources is currently valued at just under CAD 6 million. With appropriate announcements, it should give a jump in price. Those who do not want to miss the trend can buy an initial position now at CAD 0.18.
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