26. March 2021 | 06:35 CET
Barrick Gold, Triumph Gold, Yamana Gold: This is how investors get their foot in the door with gold
Anyone who believes in rising prices for gold must be strong at the moment. For months, companies in the sector have not been getting off the ground. But for experienced investors, this is nothing new - especially in the gold market. Chart technology and gut feeling often reach their limits with precious metals. The market is unpredictable. But the general conditions are good; the major central banks continue to see no inflation and open the floodgates. Investors with patience could be rewarded.
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ISIN: CA0679011084 , CA8968121043 , 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: No potential in the short term
Patience is needed by shareholders of Barrick Gold, among others. The major producer has generated solid returns in the past year but could not emancipate itself from the gold price. As a result, the price gains of the first half of 2020 have gradually melted away. There is even a loss of almost 6% for the year. Barrick was recently traded as a potential buyer of other gold companies. If a purchase succeeds in the current phase, this could be the Company's liberating blow - in the long term.
In the short term, skepticism is likely to prevail among many investors. Only when the gold price picks up again will a large company like Barrick be in demand again. Should a takeover materialize and the acquired assets complement Barrick's portfolio, it will further expand its position as a market leader. As soon as gold again dominates the headlines, Barrick will become interesting again. Until then, however, the stock is only an issue when there is weakness.
Triumph Gold: Solid small-cap stock with leverage guarantee
While at Barrick Gold every correction of the gold price is immediately extrapolated to the next quarterly figures, investors of Triumph Gold can be more relaxed. The Company operates in Canada's Yukon and continues to develop a gold project there. Another project is located in the US state of Arizona. The market values the deposits in the ground at Triumph at a significant discount - that's how it is with gold projects where it is not yet clear whether or not production will ever occur.
Nevertheless, the shares of Triumph Gold could be an attractive alternative for all those who expect rising prices for gold. The reason: The share is currently at the bottom and hardly gets any attention from shareholders. It also looks as if all remaining shareholders are keeping their feet still at the current level from a chart perspective. Triumph Gold recently put together a full-time team for the upcoming exploration work and expanded its property in the Yukon.
There, it operates near Newmont, which also has a 12.8% stake in Triumph. The stock is like a warrant on the price of gold. It is ideal for anyone who wants to put their foot in the door with gold with little capital investment.
Yamana: Advantage thanks to commodity mix?
Yamana Gold offers a different approach. The Company mines copper in addition to gold and silver and should thus be robustly positioned - after all, silver and especially copper are very much in demand in the field of electromobility.
However, despite good company figures, the share is not gaining momentum. Over three months, the share price has lost almost 20%. The share price trend shows that Yamana cannot profit from its broad raw material mix. Moreover, since Yamana is already a producer, the big growth phase is over. Producers are often viewed differently by the market and have to deliver quarter after quarter. The many potential uncertainties in the mining sector quickly weigh on the share prices of smaller producers in particular.
Good arguments for small caps
Those who want to bet on gold with stocks can take two approaches: Small-cap producers usually outperform the gold price in the event of rising gold prices. In return, dividends and a comparatively calm price trend beckon. However, the current market situation also offers opportunities for small stocks: Many promising companies are trading near their long-term price lows. If you have patience, you can get your foot in the door with a small capital investment and be in immediately when the precious metal bull market returns. With a market capitalization of around EUR 16 million, Triumph Gold is highly speculative but offers the chance of dynamic development as gold prices rise.