February 24th, 2022 | 13:45 CET
Barrick Gold, Ximen Mining, Yamana Gold - Outperform with gold stocks!
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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
The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.
Barrick Gold - Debt-free
Buoyed by good production data and a rising gold price, the shares of the world's second-largest gold producer performed very well in recent weeks. The Canadians had slightly exceeded the production targets they had set themselves. Q4 earnings increased significantly to USD 0.41 per share. The free cash flow generated of USD 718 million was particularly strong.
This financial strength has multiple positive effects, gives great scope for further development of own projects and enables acquisitions. At the end of the year, the Group was debt-free, with a net cash position of USD 130 million. The mining giant allows shareholders to participate in its success with a quarterly dividend of USD 0.10. In addition, shareholders can look forward to a share buyback program of USD 1 billion. Despite the share price gains, analysts see further upside potential of 14% for the stock.
Ximen Mining - Accolade
The Company focuses on the acquisition of high-grade gold deposits in southern British Columbia (Canada), which are easily accessible and have good infrastructure. The Canadians aim to develop properties with a potential of several million ounces of gold.
Ximen Mining owns several 100% interests in precious metals projects. These are the two gold projects, Amelia and Brett. Also included in the portfolio is the Treasure Mountain silver project adjacent to the past-producing Huldra silver mine. Recently, the Company acquired the past-producing Kenville gold mine near Nelson, British Columbia, which includes surface and underground mining rights, buildings and equipment. Previous drill programs demonstrate the extent of high-grade vein structures. Half of the property is unexplored, and it is here where the potential lies.
The Company's future is also believed in by the much larger New Gold Inc., which recently acquired a 9.9% interest in Ximen. Christopher R. Anderson, President and CEO of Ximen, commented, "Building strategic relationships with active partners in our community and jurisdiction is essential to Ximen's long-term goals. Ximen looks forward to deepening its relationship with New Gold. Their initial decision to invest in Ximen's projects and development plans is an excellent starting point." Given the project quality, the Company, valued at CAD 23 million, is worth a closer look.
Yamana Gold - Records in Q4
Record fourth-quarter results and a positive outlook sent the Canadian precious metals producer's shares up 10% in recent days. The output in the final quarter of 281,388 ounces of gold equivalent exceeded the previously issued quarterly forecast of 270,000, allowing annual production to exceed the threshold of 1 million ounces of gold equivalent for the first time. High profits and high cash flows were achieved in combination with low costs (All-in Sustaining Costs, AISC) of USD 962.
Earnings increased to USD 109.7 million, or USD 0.11 per share. Q4 free cash flow nearly doubled to USD 119.6 million, up 47% from Q3. The Q4 increases were also based on significantly higher production. However, gold and silver selling prices were below Q4 2020 levels.
The production outlook also pleased stockbrokers. For the current year, the output is expected to be at least 1 million ounces and to increase by 30,000 ounces p.a. in each of the following two years. For 2022, costs (AISC) are calculated at USD 1,080 (previous year: USD 1,030). Yamana shareholders can thus look forward to a new record result in the current fiscal year. The average gold selling price in 2021 was USD 1,799. Higher prices in the course of the year should more than compensate for the anticipated cost increases. Analysts believe that the share price will rise by around 20%.
The general conditions for gold shares are good. Those who want to bet on the first and second-tier producers are doing well with Barrick and Yamana. For those who are not afraid of the higher risks of an explorer, Ximen is a good choice. Explorers usually develop much stronger than producers in phases of rising precious metal prices.
Conflict of interest
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