June 21st, 2021 | 14:19 CEST
Barrick Gold, NSJ Gold, First Majestic Silver- Buy and stay patient
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"[...] Our projects are at the initial, high reward exploration stage. [...]" Humphrey Hale, CEO, Managing Geologist, Carnavale Resources Ltd.
Barrick Gold - In the wake of the weaker gold price
Precious metal and commodity prices set the pace for the share price performance of mining companies. Last week, there was a damper. On Wednesday evening, the sharp rise in inflation was the focus of discussion at the meeting of the US Federal Reserve. In May, US consumer prices showed an increase of a high 5%! The ultra-loose monetary policy will continue, and a growing number of committee members expect a first interest rate hike as early as next year, which weighed on the stock markets last week. But the gold price also came under pressure and has since lost around USD 100 to currently USD 1,763.
The shares of the world's second-largest gold producer were unable to decouple themselves from these negative developments. The papers lost about 10% to CAD 25.80, giving the Canadians a stock market value of CAD 46 billion. According to analyst consensus, the upside potential of the shares is currently calculated at around 40%. The group owns many of the world's most productive gold areas and also several copper projects. In the current fiscal year, the Company aims to achieve a production volume of 4.4 to 4.7 million ounces of gold and a copper output of 410 to 460 million pounds. Barrick operates in 13 countries worldwide, particularly in North and South America and Africa.
NSJ Gold Corp. drill results released
Canadian gold exploration Company NSJ Gold Corp. holds an option to acquire a 100% interest in the Golden Hills project in the US state of Arizona, which produced gold back in the 1940s. On June 14, the Company reported initial results from the ongoing drill program at the 8.5 sq km project. The campaign included 16 drill holes and targeted structures believed to be defined by north-northwest trending geophysical anomalies.
The highest gold grades were encountered within a known high-grade gold-bearing structure, but several low-grade zones were also discovered, particularly at depths below high-grade gold mineralization. Two intercepts totaling 10.7 meters averaging over 1.5% copper were also encountered. Overall, however, the zones were too broad to interpret the structures fully. These points will be addressed in the next drill program.
Located in close proximity to the Kay Mine (distance: 100 miles, owned by Arizona Metals Corp.) and the Moss Mine (distance: 80 miles, owned by Northern Vertex Mining Corp.), the Golden Hills area sits on the Walker Lane Gold Trend, a formation that has prospective gold and copper deposits. One of the people responsible for the development of the Moss mine, Richard Kern, now serves as NSJ Gold's vice-president of exploration, overseeing the exploration drilling currently underway. Currently, the Company is valued at CAD 5.3 million. The market has seen many success stories and has shown that stock market minnows can grow quickly and make shareholders very happy if the results are right.
First Majestic Silver - Silver producer on the wayside
The Canadians operate several producing silver mines in Mexico. At the beginning of the year, the stock benefited from short squeeze speculation, which pushed the share up to CAD 28. Currently, the stock is trading at CAD 20, which values the Company at a market capitalization of about CAD 5 billion. In total, the stock analysts see an upside potential of just 2% for the title. The reason for this could be that the three mining projects in Mexico all have theoretical remaining lifetimes of less than six years. In addition, silver and gold reserves and resources are steadily declining.
Early in the second quarter, First Majestic took an unusual step and acquired a gold project for the first time in its history in the absence of attractive silver projects in the market. With the acquisition of the Jerritt Canyon Mine in Nevada, the Canadians acquired a first-class gold project in the US state with a size of 308 sq km and a production in the last 20 years of about 9.7 million ounces of gold. Thus, First Majestic is now operating outside Mexico for the first time. A few weeks ago, First Majestic bought shares of the exploration Company Blackrock Silver in the volume of CAD 1.25 million as part of a private placement; the funds are to advance the Tonopah West silver-gold project in the US state of Nevada. There are indications that the Canadians will gradually expand their footprint in Nevada.
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