17. February 2021 | 10:45 CET
Barrick Gold, Triumph Gold, Yamana Gold - All good things come in threes - and gold!
Since the summer of 2020, the majority of gold stocks have been correcting. The precious metal price reached a peak value of USD 2,074 at that time but then switched into reverse gear - apart from a brief upward movement at the beginning of the year - and is currently quoted around the USD 1,800 mark. For anti-cyclical and long-term investors, but also for short-term traders, the current situation offers exciting opportunities. The broad-based bull market on the stock markets and in the area of cryptocurrencies is brimming with optimism. Despite a - and also shared by us - positive assessment of the capital market environment, corrections will continue to occur in the future. The trigger, duration and massiveness are written in the stars. However, one rule of thumb has almost always proven itself: in phases of fear and uncertainty, gold gains value as a crisis currency. With good quality gold stocks, investors are then on the winning side. Where is it worth investing now?
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ISIN: CA8968121043 , CA0679011084 , CA98462Y1007
"[...] Both the geology and the infrastructure around the project make for a very attractive cost structure. We expect to be able to produce at 50% of the current gold price. [...]" Bill Guy, Chairman, Theta Gold Mines Limited
BARRICK GOLD CORPORATION - Q4 figures to be published on February 18
In mid-January, Barrick Gold had already published production data for the final quarter and achieved the advised target range in gold and copper production. But the output of 4.8 million ounces of gold and 457 million pounds of copper still says nothing about profitability. The Company will complete the picture tomorrow with the complete data for Q4 and the past fiscal year.
The Company's announcements in recent weeks are positive, as the group reported several projects and holdings that posted better-than-expected numbers for the past year, as well as a continuation of positive trends.
Barrick Gold is the world's second-largest gold producer and owns many of the world's most productive gold properties. Thus, investors benefit from rising quotations of the precious metal. Additionally beneficial is the group's involvement in several copper projects. The industrial metal has performed very well in recent months. Market experts expect the price increase to continue in the wake of rising demand from the electromobility sector. Barrick shares have fallen by around a third since the summer of 2020. In our opinion, this is a good level for (new) engagements.
TRIUMPH GOLD CORP - Acquisition of acreage near the Freegold Mountain project
Canadian exploration Company Triumph Gold is focused on developing the Freegold Mountain gold-copper project in the Yukon Territory, a very mining-friendly jurisdiction in northwestern Canada.
Earlier this month, the Company announced it was acquiring 258 claims adjacent to the zones of the 200 sq km Freegold Mountain project in an attractive transaction. Not only does this increase Triumph's footprint in the region, but it also brings a new high-profile major shareholder to the table, namely, Teck Resources. The multi-billion-dollar corporation is Canada's largest diversified resource Company. Teck invests, in particular, in the copper, steel, coal and zinc sectors. Teck will receive 1.25 million Triumph shares as part of the transaction. With an eye on potential production in the future, the giant has secured a 1.5% net smelter return on copper production from the divested Big Creek project. This deal is a win-win for both buyer and seller, in our opinion.
To date, the market has not adequately priced in Triumph Gold's potential. The stock market value of CAD 25 million in no way reflects the project's opportunities, with a now even larger area.
YAMANA GOLD INC - Analysts see more than 50% price potential
Yamana is a mid-tier producer of gold, copper and silver. Last week, the Canadians published excellent Q4 figures. However, these were largely ignored by the market in the wake of the falling gold price. Yet an increase in profits from CAD 14.6 million to CAD 103 million is no mean feat. Also, Yamana increased its quarterly dividend by 50%.
In the past, Yamana has not only grown organically but also through a series of transactions. Currently, the Company's market capitalization is CAD 5.7 billion. Since the high last summer, the share price has lost about a third and is now at about CAD 6.
The majority of analysts following the Company see the stock as undervalued and recommend the shares as a buy with an average price target of CAD 9.15. This number corresponds to a price change of more than CAD 6 billion, which corresponds to a price opportunity of over 50%.