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February 23rd, 2022 | 12:55 CET

Barrick Gold, MAS Gold, Gazprom - The conflict and its consequences

  • Gold
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The next level of escalation in the Ukraine conflict has been ignited, and the consequences are severe. Oil prices moved close to the USD 100 mark, posting their highest levels since the end of 2014, and the precious metal gold shot above the important USD 1,900 mark. The stock markets buckled dramatically in the first hours of trading, only to start a rally and price fireworks in the course of trading. Despite the still acute concerns about an expansion of the conflict, a trend reversal may already have been heralded in the German benchmark index.

time to read: 3 minutes | Author: Stefan Feulner
ISIN: BARRICK GOLD CORP. | CA0679011084 , MAS Gold Corp. | CA57457A1057 , GAZPROM ADR SP./2 RL 5L 5 | US3682872078

Table of contents:

    Gold as a safe haven

    In the past year, it was often mentioned that an investment in gold should serve as the best inflation protection in the long term. Due to the high inflation rates, which are now also seen by central banks as longer-term, the low interest rate level, and the high indebtedness of several countries, gold should continue to count as a long-term alternative to fiat money. Should the central banks implement the announced interest rate hikes this year, this would not change anything. In addition, the precious metal is now also back on the table as a crisis currency due to the Ukraine conflict that is currently taking place. Currently, a sustainable break of the resistance at USD 1,916.35 would be important for a consolidation formation to follow.

    Gold mining stocks before the turnaround?

    While investments in physical gold would be a good idea, shares of gold producers and exploration companies are quite attractive at the current level. Last week, the second-largest producer Barrick Gold proved that business is flourishing with the figures it presented. At USD 3.31 billion, sales were around 17% higher than in the previous quarter, thus exceeding analysts' estimates of USD 3.147 billion. With net income doubling to USD 726 million and earnings per share of USD 0.35, the analyst consensus was also exceeded here. In addition to a share buyback program totaling USD 1 billion, shareholders will receive a dividend of USD 0.10.

    Due to rising energy and generation costs, production will be somewhat more costly for Barrick Gold next year. All-in sustaining costs rose 17.5% in copper production to USD 2.62 per pound from USD 2.23 per pound a year earlier. In the gold segment, costs rose about 6% from USD 967 per ounce in 2020 to USD 1,026 currently. For the next quarters, the Company plans costs between USD 1,040 and USD 1,1120. After the figures, the price rose sharply by around 6%. Currently, the Company, based in Toronto, Canada, is trading at USD 22.86. An overcoming of the mark of USD 25.37 should now take place promptly to be able to generate a new buy signal.

    MAS Gold with positive signals

    Of course, the Junior Explorer MAS Gold is not yet comparable to the big players in the industry. Still, the Company, which has a market value of only EUR 10.74 million, is attracting attention with a constantly positive news flow. MAS Gold announced the start of a drilling program in the 843 hectare Comstock Metals gold project. It is adjacent to the already owned Preview-North property in northeastern Saskatchewan's La Ronge Gold Belt. Together with parts of the Preview-North property, it is located within the Lac La Ronge Provincial Park Mineral Exploration Zone.

    The 8,000-meter program has commenced on the North Lake deposit and will include drilling on both the Preview SW and Point deposits as the program progresses. Drilling at the Preview SW property is the subject of the agreement with Comstock Metals.

    MAS Gold owns four properties totaling 34,000 hectares in the historic La Ronge Gold Belt mining district. In this area, which is well developed in terms of infrastructure and has very mining-friendly legislation, lies, among other things, the former Contact Lake gold mine, which was operated by Cameco until 1998 and whose rights MAS Gold was able to secure in 2021. In addition, the Company owns the properties Preview North, Greywacke Lake, Elizabeth Lake and Henry Lake. Preview-North alone is believed to contain resources of around 494,000 ounces, while Greywacke is estimated to host 156,000 ounces. In total, the Company anticipates gold deposits in excess of 1 million ounces. With the positive news flow and in anticipation of a summary resource estimate expected in the first quarter, the full potential of MAS Gold should become apparent.

    Pipeline on hold

    A moment of shock had to be experienced by Gazprom investors after the announcement of Russia's President last night. It was already known that sanctions concerning Nord Stream 2 would not be far behind. The German Chancellor Olaf Scholz had announced in a press conference that he had asked the Ministry of Economics to withdraw the existing report on the analysis of supply security at the Federal Network Agency. As a result, the pipeline could not be certified and consequently could not go into operation.

    Little surprised by the ongoing sanctions, Deputy Foreign Minister Andrei Rudenko told the Interfax news agency in Moscow on Tuesday: "Moscow is not afraid of anything." After the sell-off, the share is well supported in the EUR 5.50 range. In terms of valuation, it is also attractively valued again. Of course, the further course of the conflict is uncertain.

    After Corona and the inflation worries, the Ukraine conflict is currently coming to the fore. Gold stocks such as Barrick Gold and MAS Gold benefit from the uncertainties and the threat of war in Europe. In contrast, Gazprom is suffering from the sanctions concerning Nord Stream 2.

    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 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

    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.

    About the author

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