May 19th, 2022 | 14:01 CEST
Barrick Gold, MAS Gold, Deutsche Bank - Patience leads to wealth
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"[...] I wouldn't be surprised if the project ends up showing more than 5 million ounces. [...]" Gary Cope, President and CEO, Barsele Minerals
Historic entry opportunity in gold mining shares?
The supporters of the precious metal gold are truly not to be envied at the moment. While the conditions for strongly rising quotations are better than ever, the gold price is again bobbing around USD 1,800 per ounce. From a chartist's point of view, even further short-term disaster could threaten if the base price breaks through the level of USD 1,760 per ounce. Should such a scenario occur, and a move towards USD 1,600 per ounce takes place, this should mean an excellent anticyclical entry opportunity for the long term. Especially shares of producers such as Barrick Gold or exploration companies such as MAS Gold corrected more strongly than the broad market in recent weeks. In contrast, the Canadians were able to shine with excellent drilling results from the winter drilling program.
At Barrick Gold, one of the largest producers in the world, the lights for an entry are currently on red. A sell signal was triggered by the abandonment of the 200-day line and the break of the upward trend at USD 21.23. This trend has existed since December. The psychological mark at USD 20 is now important; should this be broken, a relapse to the horizontal support line at USD 18 threatens. This scenario does not seem unlikely, as shown by the negative diverging trend indicators, which would confirm a relapse, at least in these regions.
MAS Gold with further steps
MAS Gold currently has a market capitalization of EUR 10.39M. The main focus of the experienced team around mining veteran Jim Engdahl is on the La Ronge gold belt in the Canadian province of Saskatchewan. MAS Gold's current projects include the North Lake, Greywacke North, Bakos (Contact Lake) and Point gold deposits, and the historically defined Elizabeth Lake volcanic massive sulphide copper-gold deposit on four properties totalling 34,703.4 hectares. The world-class deposit is believed to contain over 1 million ounces of gold.
In addition, MAS Gold recently finalized the purchase of the 843-hectare Preview SW property from Comstock Metals, adjacent to Preview North. The Preview SW property perfectly complements the current portfolio of the hub and spoke properties. The concept is that mineralized material from various satellite deposits will be consolidated into a centrally located processing facility at Preview North. The acquisition was paid for with treasury shares, and Comstock Metals has become a proud major shareholder with a 16.2% equity interest.
In addition, positive drill results from the winter drill program were recently announced. MAS released results from SRC Geoanalytical Laboratories for an additional 7 holes drilled in North Lake. Results from these holes show an extension of mineralization down-dip of the northernmost historic drill hole and an upgrade of the near-surface resource in the northern extension of the deposit. According to management, the results showed that mineralization near surface occurs in previously untested locations and that the North Lake deposit continues to expand along strike. In addition, these contribute to the ability to increase resources further. To support the advancement of the portfolio of prospective projects and meet working capital requirements, the Canadians announced a private placement of up to CAD 3 million.
Deutsche Bank with the next run to the top?
Banks and financial services providers, in particular, were able to benefit from the change in strategy of the US Federal Reserve and the abandonment of the ultra-loose monetary policy. At the beginning of the year, for example, Deutsche Bank went above the magic mark of EUR 10 to a new four-year high of EUR 14.64. However, this was followed by drastic profit-taking after Russia's invasion of Ukraine. Fears of high credit exposures in Russia and Ukraine caused the share price to implode to a low of EUR 8.16 within days.
After a rebound to EUR 12.14, there was another slide towards the intermediate low, which was not undercut. A bullish sign, with the indicators also turning positive. Overcoming the downward trend formed since June at currently EUR 9.51 would generate a prominent buy signal.
The general conditions for a rising gold price are still favorable, but the precious metal is in correction mode. In the long term, this offers good anticyclical entry opportunities in stocks such as Barrick and MAS Gold. Deutsche Bank could leave its downward trend in the short term.
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