19. October 2020 | 11:00 CET
Barrick Gold, SolGold and BP: is it worth to be invested?
For commodity producers, the price development of the underlying commodity often sets the pace for the share price development. Nevertheless, cost position and new potentials can cancel out this first rule. Diversification across several commodity classes can also prove advantageous. Project quality and the ability to adapt quickly to different conditions are a top priority. Who has done his homework well?
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ISIN: GB00B0WD0R35 , CA0679011084 , GB0007980591
Barrick Gold - on schedule
Barrick Gold reported preliminary third-quarter results at the end of last week. The Group will present its detailed quarterly report on November 5. According to the preliminary key figures, Barrick achieved sales of 1.25 million ounces of gold and 116 million pounds of copper in the third quarter. The corresponding production was 1.16 million ounces of gold and 103 million pounds of copper. The average market price for gold was USD 1,909.00/ounce, while the average market price for copper was USD 2.96/pound.
Primary gold production in Q3 was slightly higher than in Q2, despite the production shortfall in Porgera, Papua New Guinea due to maintenance work. Without this production stop, the output would have been 3% higher. The Carlin and Pueblo Viejo projects performed exceptionally well.
Gold production in the first nine months of the current fiscal year increased to 3.6 million ounces. The Canadians are therefore on track to meet the production forecast for the full year. Barrick Gold is and will remain a base investment in the commodity sector. The share price increased by over 60% within one year.
SolGold - good newsflow over many weeks
In the last four weeks, SolGold's shares have continued to perform well in the wake of good corporate news, gaining nearly 40%. The Company focuses on the discovery and development of world-class copper-gold projects in Ecuador. The Company has been active in the country since 2012 and focuses on the Ecuadorian portion of the world's most prosperous copper-gold belt, the Andean Copper Belt.
A few days ago, the Company announced that it suffered a setback in its efforts to clean up its shareholder structure. SolGold had attempted to increase its ownership interest in the flagship Alpala project from 85% to 100%. Alpala has a resource of 21.7 million ounces of gold, 9.9 million tonnes of copper and 92.2 million ounces of silver. According to a recent study (PEA), the project (NPV) has a valuation of USD 4.4 billion.
Although SolGold has not yet been able to realize its desire to increase its stake, the final word has yet to be spoken. In addition, the Company has a pipeline of 14 wholly owned and unencumbered projects covered by 75 issued licenses and covering 3,200 sqm throughout Ecuador. The share remains very promising.
BP - when does the sentiment turn?
The environment for significant oil and gas producers is extremely poor. The outlook for the global economy and the paradigm shift towards green energy sources are weighing on share prices. The sentiment is also depressed by reports that the OPEC states of Iraq and Libya are not adhering to production cutbacks and fears of a severe hurricane season.
It is, therefore, no wonder that BP shares were unable to escape the pull of the negative oil price trend. In the last 12 months, the share price has fallen by almost 60%, twice as much as the price of oil.
Much negativity has been priced into the price. Especially when sentiment is so bad, there are often opportunities for investors who swim against the current. On October 27, the Group will publish its quarterly results together with statements on dividend payments.