July 16th, 2021 | 11:31 CEST
Barrick Gold, Triumph Gold, Standard Lithium: Get in relaxed with stragglers
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"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Barrick Gold: When will the liberation strike follow?
Those who want to invest in gold and shy away from bars or coins often bet on the shares of Barrick Gold. The second-largest gold producer in the world is considered a solid gold investment. The Company operates mines around the globe and produces some silver and copper in addition to gold. If you compare Barrick Gold's share price performance to the gold price, you get the impression that the stock always staggers a bit. Last year, shareholders were bothered by Barrick's failure to invest in growth. Instead, Barrick paid out a special dividend in the end, which investors happily pocketed, but which also acted a bit like an indictment. After all, big mining companies have to think about the growth of tomorrow.
Still, nothing has happened at Barrick in terms of acquisitions on a larger scale. The share has even posted a loss on a one-year horizon. Such a development does not put us in a good mood. Although Barrick has made progress on costs in recent years, the stock lacks a liberating blow - It could be a spectacular takeover or a merger. The opportunity currently appears favorable: the pandemic is taking a break, and travel is possible again. At the same time, the gold sector is a bit out of focus - the premiums on potential takeover candidates are not likely to be that large.
Triumph Gold: Low valuation + takeover fantasy
One Company that would fit well in Barrick Gold's portfolio is Triumph Gold. Triumph Gold operates in the Yukon district of Canada and is developing a gold-copper project there. Last year, Barrick thought out loud about wanting to expand its stake in copper. Triumph stands for the Freegold Mountain project and has been working there since 2006. A resource estimate shows 2 million ounces of gold. Copper was also found in high grades. Triumph's immediate neighbor is Newmont, the world's largest gold producer. Since the group already holds 12.8% of Triumph, there is also a takeover fantasy in this direction.
Triumph Gold recently expanded its property by acquiring an adjacent property. This year's exploration program has been underway since the end of June and may produce initial results in the coming weeks. The share has scored with some dynamic breakouts to the upside this year and appears solidly supported in the year's lows. Given a market capitalization of around EUR 15.5 million, the share is suitable as a speculative portfolio addition.
Standard Lithium: The calm is deceptive
Shares such as Standard Lithium are also suitable as speculative and future-oriented portfolio additions. For some time now, the share price has been rising steadily and attracting more and more investors. The Company is moving to a higher stock market segment in North America and wants to become a lithium supplier to the USA. Investors expect this to lead to a rapid increase in the share price and are betting on further price rises. As the Company is already ambitiously valued, although it is still far from production, investors should be cautious. The recent sideways trend is deceptive, the drop height correspondingly high.
While Standard Lithium is currently the darling of investors and thus already valued accordingly, Triumph Gold is still trading near its previous lows. A look at the price trend of 2020 shows how dynamically stocks like Triumph Gold can rise as soon as the market turns accordingly. Speculative investors can take advantage of this. Barrick Gold is also likely to profit in such a case, but the share will not make giant leaps.
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