Close menu

November 26th, 2021 | 12:37 CET

Barrick Gold, Sierra Grande Minerals, Yamana Gold - False breakout in gold?

  • Commodities
Photo credits:

On November 5, it seemed gold had finally broken out of its established triangle in the chart. However, since November 19, the bears have retaken the helm for the time being. Investors, who have otherwise relied on gold for inflation and other hedges, are still reacting hesitantly. One reason is the expansion of the money supply, which is displacing people's fear. Nearly all central banks see inflation as temporary. Another reason is the cryptocurrencies, which are also used as capital protection and thus represent competition. If interest rates rise, that would be a bad sign for gold. If inflation remains, global gold demand could increase, with demand from India and China already picking up. The newly formed uptrend in gold is only broken below USD 1,721.1 on a daily basis, so we currently expect gold prices to rise. We, therefore, analyze three gold companies.

time to read: 3 minutes | Author: Armin Schulz
ISIN: BARRICK GOLD CORP. | CA0679011084 , Sierra Grande Minerals | CA82631L1085 , YAMANA GOLD INC. | CA98462Y1007

Table of contents:

    Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
    "[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG

    Full interview


    Barrick Gold - Waiting for an acquisition

    Anyone who does not want to buy physical gold looks around at the shares of the major gold producers. One of them is Barrick Gold, but this year's share price performance will have disappointed many investors. Things are, however, going well for the Company operationally, as the latest quarterly results on November 4 showed. Earnings per share were USD 0.20, and the war chest is well stocked for acquisitions. The CEO has announced plans to buy more mines in North America, but there have been no completions so far.

    Maybe that is also one of the reasons why the share has performed less well than the benchmark index. There are rumors of an acquisition of Great Bear, but they are not confirmed. A major acquisition could be a jumpstart for the stock. A rising gold price also helps the share immediately, as the Company boasts production of 1.09 million ounces of gold and 100 million pounds of copper in the quarter. On the other hand, as the price of gold fell, the stock also sold off immediately.

    Currently, the share is trading at USD 19.39 and established an upward trend in mid-October. It remains intact as long as there is no closing price below USD 18.19. The Company pays about a 4% dividend this year, and this rate is not expected to fall for the time being. As an investor, if you are positive about the future price of gold, you can not go far wrong in the long term at current prices.

    Sierra Grande Minerals - Copper trend found

    Sierra Grande Minerals, headquartered in Surrey, Canada, operated under the name Sierra Growth until July. The Company is a junior explorer that has its focus on gold, silver, copper and molybdenum. Currently, it owns three prospective projects in Pershing and Nye, Nevada, totaling more than 2,023 hectares. The projects are surrounded by Tier-1 mines and exploration properties, i.e. large, long-lived deposits that can be mined at relatively low cost.

    Soil geochemical sampling has been conducted at all projects this year. The Company announced the first results on the B&C Springs-Mildred project on October 6, and the other two results are still pending. On the property, 544 samples were collected, showing an extensive copper trend, grading up to 1,190 ppm copper, over a width of nearly 1 km and a length of 4 km. Previous grab samples have already found up to 667 g/t gold, 78.6 g/t silver, as well as copper, zinc and lead on the project area.

    As a next step, the Company plans to conduct an airborne magnetometer survey. The results will be used to plan the upcoming drill program. The two other projects, Glitra/Sat and Betty East, also boast gold and silver deposits. Since July, the share price has moved between CAD 0.06 and 0.14. Currently, the stock is trading at the lower end at CAD 0.085. With new positive news, momentum could come back into the share.

    Yamana Gold - Operationally, things are going well

    Toronto-based Yamana Gold produces gold, silver and copper in Canada and South America. After the gold peak in 2020, the sky was hanging full of violins, but as the gold price fell, so did the share price. Since the recent breakout in the gold price, the stock has been able to break out of its downtrend and is currently consolidating with the falling gold price. A look at the operating business suggests potential.

    The figures for the third quarter are impressive. Sales were USD 452.2 million, and operating profit increased by 8% to USD 154 million YOY. It was also encouraging that production costs fell from USD 1,096 to USD 1,041. The forecast of 1 million ounces of gold equivalent was confirmed, so there should be no more nasty surprises at the end of the year.

    In the long term, the Company intends to increase production further. Fundamentally, the stock appears too cheap, as the market capitalization is about USD 100 million below equity at the current price of USD 5.19. The dividend yield is currently about 2.9%, sweetening the wait for investors until prices rise. As long as the share does not fall below USD 4.83 on a closing price basis, the stock has further upside potential.

    A rising gold price helps all three companies. Barrick Gold is popular with investors and has a bulging war chest, with the help of which takeovers can be easily managed. Sierra Grande Minerals can show initial results but is still in the early stages of exploration. Positive news can boost the share at any time. Yamana Gold has a price-to-book ratio of below 1 and is thus fundamentally too cheap.

    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 in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.

    The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.

    Der Autor

    Armin Schulz

    Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.

    About the author

    Related comments:

    Commented by Armin Schulz on May 21st, 2024 | 07:15 CEST

    K+S, Globex Mining, Barrick Gold - Commodity stocks: Make money now

    • Mining
    • Gold
    • Commodities
    • fertilizer

    The commodities market in 2024 is characterized by high volatility, driven by strong demand, supply bottlenecks, and technological shifts to renewable energy, which make lithium and copper, for example, more expensive. In addition, inflation concerns make precious metals attractive as a hedge against inflation, while the central banks' interest rate policy is also a factor. Geopolitical tensions further disrupt supply chains and drive up prices. In this context, investments in commodity shares are becoming increasingly important. This form of investment allows investors to benefit indirectly from price fluctuations and the increase in the value of commodities without having to physically invest in the commodities themselves. We are, therefore, looking at three commodity companies today and analyzing their potential.


    Commented by Stefan Feulner on May 13th, 2024 | 06:30 CEST

    Rheinmetall, Power Nickel, Bloom Energy - Will the rally continue?

    • Mining
    • Gold
    • Lithium
    • Commodities
    • Defense

    After a brief pause in recent weeks, the rally in Germany's leading index, the DAX, has continued unabated, with the target of 19,000 points already in sight. Defense stocks remain the undisputed top performers. Another sector that has taken center stage in recent weeks is commodities. In addition to gold, silver and copper, the industrial metals lithium and nickel are also forming solid foundations for the next upward impulse. Corresponding companies were already running ahead of the base value.


    Commented by Fabian Lorenz on May 2nd, 2024 | 07:00 CEST

    Profit more than doubled! Barrick Gold, Nel shares, Globex Mining ripe for take-off

    • Mining
    • Gold
    • Commodities
    • renewableenergies

    While defense and AI stocks have already performed brilliantly this year, there are also stocks with catch-up potential. One of these is Barrick Gold. Despite a record gold price, the shares of one of the world's leading gold producers are trading at 2019 levels. Will the latest quarterly results bring a breakthrough? In any case, profits have more than doubled, exceeding analyst estimates, and the Company continues to expand. Also gaining momentum in recent weeks is the share of Globex Mining. The mining incubator offers a unique diversification opportunity in the commodities sector. The news flow is convincing and could continue to drive the share further. The Nel share also needs a boost. The hydrogen pioneer can look forward to a major order. Could this trigger a turnaround in the share price?