Close menu




April 9th, 2022 | 07:30 CEST

Barrick Gold, Ximen Mining, First Majestic Silver - Do precious metal stocks belong in the portfolio now?

  • Gold
  • Silver
  • PreciousMetals
Photo credits: pixabay.com

Crises like the current Ukraine war or the steadily rising inflation are good for precious metals like gold and silver. According to the German Association for Precious Metals, demand for physical precious metals increased by at least 25% in the first three months of this year. Demand had already climbed by 31% last year. But not everyone can store precious metals safely. The alternative is to invest in precious metals companies listed on the stock exchange. We take a closer look at three candidates today.

time to read: 4 minutes | Author: Armin Schulz
ISIN: BARRICK GOLD CORP. | CA0679011084 , XIMEN MINING | CA98420B2003 , FIRST MAJESTIC SILVER | CA32076V1031

Table of contents:


    Bill Guy, Chairman, Theta Gold Mines Limited
    "[...] 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

    Full interview

     

    Barrick Gold - Search for investments expanded

    After the gold companies could not profit from inflation for a long time, the outbreak of the Ukraine conflict gave the starting signal for a rally in the gold price, which shot up by USD 150 within a short time. This breakout is helping the world's second-largest gold producer Barrick Gold grow its earnings. At the beginning of the year, the Barrick share could still be obtained for USD 18.00. By March 8, the share price had risen to over USD 26, without any fundamental change.

    The 2021 annual report, published on March 18, provided insights into the group's future plans. After no major acquisition could be made last year, the search for high-quality gold deposits will be expanded globally. The Asia-Pacific region, North Africa, the Middle East and Latin America were mentioned. But the Company also wants to become more involved in Canada. CEO Mark Bristow wrote, "A significant exploration portfolio has been secured in the country's Uchi belt, and the team is also reviewing other opportunities in the country."

    He also reiterated the ESG approach Barrick is taking and attaches critical importance to it on its way to becoming the world's most valuable gold and copper company. The stock is currently trading at USD 24.61 and is in a clear uptrend. In addition, the 50-day moving average was able to break through the 200-day line, which is to be seen as bullish. The dividend yield is around 1.6% at the current price level.

    Ximen Mining - On the way to becoming a gold producer

    Ximen Mining is a Canadian precious metals explorer that owns various projects in British Columbia. Here, the Company is pursuing different approaches. The projects "Gold Drop" and "Treasure Mountain Silver" have been optioned. That means that other companies take over the exploration of the property, and Ximen receives cash, share payments or royalties in return. Other projects are 100% owned by the Company, such as the "Brett Epithermal" project or the "Amelia Gold Mine" project. However, the Company's flagship project is the "Kenville Golde Mine" property, which is on its way to becoming a producing mine.

    On April 1, the Company announced a private placement of 10 million shares at 0.15 Canadian dollars (CAD). In addition, there is one warrant per share at CAD 0.25, valid for 2 years. This corporate action is one of the conditions for obtaining the USD 5 million financing for mine development. The permitting process is already underway, and an end is in sight; on March 15, the Company announced that it expects to receive a draft permit from the Ministry of Mines within 30 days. On March 31, it was reported that all supplies and equipment needed to develop the mine had been secured.

    However, progress was made not only on the flagship last month but also on the Providence and Bud-Elk properties, where a VTEM geophysical survey was carried out. The data was used to identify drill targets at Bud-Elk to further explore the copper-gold deposit. Drilling was announced to begin on March 24. Despite the prospect of the producing gold mine, the share has not yet made gains and has been trending sideways since the start of the year. Currently, the share is quoted at CAD 0.20. Due to the capital measure, pressure could arise once again, which could move the share in the direction of CAD 0.15. Nevertheless, it is possible to get a foot in the door of a future gold producer at an early stage.

    First Majestic Silver - Record in the 4th quarter

    Annual silver consumption is about 1 billion ounces, of which 80% comes from mining and 20% from recycling. The industry uses 57% of silver as it has unique properties. Over the past 10 years, the silver industry has experienced a deficit of 500 million ounces. A good reason then to look at First Majestic Silver, especially since the price of silver has also picked up with the Ukraine crisis. The Company's focus is on silver and gold production in North America.

    After production declined in 2020 due to Corona, 2021 sales climbed above 2019, and the Company expects sales to increase about 30% this year. On March 10, the Company announced its Q4 numbers and posted a new quarterly record of USD 204.9 million. A whopping 64% increase over Q3, despite a 5% drop in the realized average silver price. Cash is well-filled at USD 237.9 million.

    Mineral reserves were announced on March 31. Due to the acquisition of the Jerritt Canyon Gold Mine, gold reserves increased by 118% to 1.32 million ounces. Silver only reported a 1% increase to 63 million ounces. Nevertheless, this is a significant increase overall compared to 2020, when resources were expected to fall. From the low for the year of USD 9.29 on January 28, it went up to USD 14.49. Currently, the stock is trading at USD 13.03, and the 50-day moving average has pierced the 200-day line quite freshly to the upside.


    Conclusion
    Precious metals belong in every portfolio for diversification. Whether you prefer to bet on gold or silver, everyone must decide for themselves. Barrick Gold is a safe bank in the gold and copper sector. Ximen Mining is about to become a gold producer. As soon as gold is mined, the share price should rise. First Majestic Silver is a good alternative for all silver lovers.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    Armin Schulz

    Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.

    About the author



    Related comments:

    Commented by Armin Schulz on February 21st, 2024 | 07:30 CET

    Barrick Gold, Desert Gold, Renk - Golden times everywhere?

    • Mining
    • Gold
    • Defense

    The world is full of economic uncertainty and geopolitical tensions. These are ideal conditions for gold, which is still considered a safe haven. There are now several factors that point to a sustained upswing in gold prices. One factor is the increased involvement of central banks, which are increasing their reserves to an extent not seen for decades. Another factor is the discussion within the BRICS nations about introducing a new currency backed by gold as a counterweight to the dominant US dollar. Therefore, today, we look at two gold companies and shed light on Renk, a representative of the defense industry, which is also experiencing golden times.

    Read

    Commented by Fabian Lorenz on February 21st, 2024 | 07:00 CET

    Top news: BYD, Bayer and Globex Mining

    • Mining
    • Gold
    • Commodities
    • Electromobility
    • chemicals

    Bayer shocked investors yesterday with the announcement of its dividend cut, which shouldn't have been much of a surprise. The Company is burdened with high debt, endless legal fines, and an empty pharmaceutical pipeline. In an initial reaction, analysts have lowered the share price target. BYD, on the other hand, is doing well operationally. Only the share price is not picking up. Will a share buyback turn the share price around? For those who want to profit from the commodity boom with reduced risk, then Globex Mining's stock is attractive. The news flow is strong, and those who act quickly can still register and follow the live presentation of the mining incubator at the 10th International Investment Forum, IIF, today.

    Read

    Commented by Stefan Feulner on February 19th, 2024 | 07:00 CET

    Renk, Manuka Resources, and Airbus with explosive news

    • Mining
    • Gold
    • Vanadium
    • Batteries
    • renewableenergies

    Germany's leading index, the DAX, managed to surpass the 17,000-point mark significantly this week, reaching a new all-time high at 17,198.50 points. After a weak IPO year in Germany in 2023, in which only three companies dared to go public, the Renk Group set an exclamation mark with a rocket launch. Whether the high level of the DAX can be maintained will also depend on Allianz, Fresenius and Heidelberg Materials, which will publish their figures for the past financial year in the coming week.

    Read