Barrick Gold, Thunder Gold, MicroStrategy – Precious metals and digital assets as an investment in uncertain times

Barrick Gold - Good key figures and solid financial position

The Canadian mining company Barrick Gold reported decent results for 2024. In the third quarter, adjusted earnings per share rose by 33%, while free cash flow grew by 24% to USD 444 million. These figures are based on stable gold production and a strong 12% increase in copper production. Barrick also managed to reduce its net debt by 27% to USD 500 million. Nevertheless, analysts remain cautious in their valuations of the stock due to short-term uncertainties such as fluctuating commodity prices and the complex corporate structure.

Despite its economic success, Barrick is struggling with problems in Mali. Disputes with the local government over the Loulo-Gounkoto mines have led to blocked gold exports and the detention of employees. The Company has initiated international arbitration proceedings and is threatening to halt mining operations if no agreement is reached. If operations are suspended, this could significantly impact Mali, as the mines account for around 10% of the country's annual economic output. However, the conflict could also have a short-term negative impact on the share price.

Barrick is looking to the future despite these hurdles. Production at strategic mines such as Pueblo Viejo in the Dominican Republic and Lumwana in Zambia is expected to increase in the fourth quarter. Mega projects such as the development of Reko Diq in Pakistan and the expansion of Lumwana also offer growth potential. With a virtually debt-free balance sheet and a dividend yield of 2.6%, Barrick remains attractive, especially for long-term investors, even if short-term risks exist. These risks have pushed the share price down to USD 15.46.

Thunder Gold - Gold price provides a tailwind

In addition to the major gold producers, smaller exploration companies such as Thunder Gold are also benefiting from the boom in the gold price. These companies have the advantage of being able to advance their projects more easily and attract investors in a strong market environment. Thunder Gold is based in Canada and focuses on the discovery and development of gold deposits. With four of its own properties and five joint venture interests, the Company is broadly positioned.
The Tower Mountain project in Ontario is their absolute highlight. It covers an impressive 2,500 hectares and is 100% owned by Thunder Gold. Particularly exciting: the gold mineralization extends through all rock types and is very consistent throughout the property with an average grade of about 1 g/t Au. One of the factors that would make the property of interest to a major mining company is that this seems to be a large deposit which can lead to a potentially long mine life without immediate concerns about depletion. In addition, the location scores well, with excellent infrastructure: directly off the Trans-Canada motorway (as well as being next to the National rail lines) making transport efficient and cost-effective. And with the hydro lines right beside the property, Tower Mountain is well-situated for year-round activity, being just 45 minutes from the international port city of Thunder Bay, Ontario.
Thunder Gold recently created a lot of interest with new channel sample results. Impressive gold grades were measured at the so-called 'P-Target', such as 9.12 g/t over 12.66 m and 4.93 g/t over 24.87 m – two of the best results the project has produced to date. In addition, soil tests indicate that the mineralization extends even further to the southeast.
The next drilling program will hopefully further highlight the potential in the ground. With an attractive share price of just CAD$0.05 and a market capitalization of CAD 10.3 million, the stock is a classic small cap. While there is always some risk associated with smaller cap companies, those who invest in companies with promising fundamentals could hit a real jackpot.

MicroStrategy – The go-to for Bitcoin Investment

While gold shines in the analogue world, the digital world has its own star in Bitcoin. And here, there is no getting around MicroStrategy. The US company has completely focused on Bitcoin and brought more than 439,000 Bitcoins onto its books – a portfolio currently valued at over USD 43 billion. This not only makes the Company the largest holder of Bitcoin of any publicly listed company, but also makes it a proxy for the cryptocurrency in the corporate sector.

It is interesting to note how MicroStrategy has financed the whole thing: in addition to convertible bonds, the Company relies on fixed-income financial markets to secure capital independently of the whims of the stock market. While this provides stability, it also increases the dependency on the extremely volatile Bitcoin price. It is, therefore, a balancing act – one that has worked quite well so far.

A highlight was: on December 23, MicroStrategy was addes in the Nasdaq-100 index. This inclusion is not only an honour but could also open the door to further institutional investors. With a current price of USD 346.20 and a market capitalization of almost USD 89 billion, the share has come a long way – it has increased by more than 500% in 2024.

Of course, the whole thing is not without risk. MicroStrategy's share price is heavily dependent on Bitcoin. However, for those who believe in the long-term future of the cryptocurrency, this Company offers an exciting opportunity to profit from it.

Whether traditional gold or digital cryptocurrencies – in uncertain times, both have their place. While major producers such as Barrick Gold score points with stable figures and growing projects, exploration companies such as Thunder Gold offer the chance of higher returns – albeit with a corresponding risk. For those who want to get involved in the digital sector, MicroStrategy may be a fitting choice. So, the decision depends not only on personal preference but also on how much risk one is willing to take.