October 19th, 2021 | 13:44 CEST
Barrick Gold, Standard Lithium, GSP Resource: Commodities booming
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"[...] 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
GSP WITH CONVINCING DRILLING RESULTS
The shares of GSP Resource are currently worth a look. At the end of last week, the share went under the wheels and fell to CAD 0.195. At the same time, the final results of the summer diamond drilling program of the Alwin project in the Canadian province of British Columbia were promising. "The final results from GSP's summer drill program support the model of a shallow deposit with large tonnages at Alwin. The summer program also delivered a new exploration target by discovering a new zone of mineralization beneath the western portion of the Alwin Main Zone at the bottom of holes AM21-02 and AM21-04. GSP is now in the final stages of preparation for a follow-up drill program to further expand the Alwin large tonnage model with additional holes to the north of the Alwin Main Zone. The results of the upcoming drill program, in conjunction with GSP's previous exploration results, will form the basis of an expanded large tonnage exploration model for the area previously considered a historic underground deposit," commented Simon Dyakowski, CEO of GSP.
However, GSP is not only exploring for diamonds. The Alwin project also has copper, gold and silver. Alwin operated as a copper mine with gold and silver content until 1981. However, 40 years ago, the copper ore grade of 1.5% was no longer economically mineable. But with today's technology and prices, the mine is once again very lucrative. In addition, a potential buyer with deep pockets is located in the immediate vicinity. That buyer is Teck Resources. The Company operates the Highland Valley Copper Mine in the region. It is one of Canada's most effective copper mines and is effectively exploited at a copper grade of less than 0.5%. Teck Resources has safely recorded the latest drill results at Alwin of 0.21% to 4.43% copper grades.
STANDARD LITHIUM BENEFITS FROM TAKEOVER FANTASIES
Exploration companies in the lithium sector are currently benefiting from takeover fantasies. Following the purchase of Neo Lithium - which owns a project in Argentina - by Zijin Mining for almost CAD 1 billion, Standard Lithium is one of the few still "free" explorers. Thus, the Standard share also marked a new all-time high a few days ago. No Chinese buyer comes into question for political reasons for the US company, but there is no lack of financially strong groups. Albemarle, for example, is repeatedly mentioned as a potential buyer. The specialty chemicals group is already one of the world's largest lithium producers and could further increase its reserves with a takeover. Standard Lithium has just published an update on the SWA Lithium Project. According to this, 30,000 tons of lithium hydroxide could be produced there within 20 years.
BARRICK DOES NOT (YET) CONVINCE INVESTORS
Barrick, the number 2 in the gold sector, has published figures for the third quarter. The Canadians were able to increase gold production by around 5%, from 1.05 to 1.09 million ounces.
On this basis, Barrick considers itself on track to achieve its guidance for the current year. The Africa & Middle East and Latin America & Asia-Pacific regions are at the high end of the forecast, while North America is closer to the low end, the group said. And the Canadians are earning well at the moment: break-even is at a gold price of around USD 1,040 per ounce, but the current price is around USD 1,798. The outlook is also good: The fourth quarter is expected to be the strongest in 2021. So optimism is high, unfortunately, only with the Company and not the investors. The share continues to trade near its low for the year. However, with a bit of patience, this offers a good buying opportunity.
Commodities - except for precious metals - are currently in demand. Standard Lithium is benefiting from high prices and takeover fantasy. If drilling results continue to be positive, this could soon become more concrete for GSP as well. Provided that the gold price does not collapse massively, one can probably not go wrong with purchasing the Barrick share in the medium term.
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