September 22nd, 2021 | 13:59 CEST
Barsele Minerals, Mutares, SoftBank - Spoilt for choice
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"[...] 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
BARSELE MINERALS CORP - Is the game changer coming?
The Canadians own 45% of the high-potential Barsele gold project in northern Sweden. Joint venture partner Agnico Eagle Mines holds the remaining shares and will take over the exploration and development of the property. In May, both parties agreed on a letter of intent under which Barsele Minerals can acquire Agnico's shares. Now the deadline to complete the deal has been extended again and set for October 31.
The transaction would be a game-changer for the Company and its stock. The Barsele project is located in the mining region of Västerbottens Län in northern Sweden, 600 km north of Stockholm, and covers 33,500 hectares. It is located at the western end of the Proterozoic "Skellefte Trend", which intersects with the "Gold Line" in northern Sweden. The main gold-bearing system remains open in all directions. According to the 2019 NI 43-101 compliant resource estimate, the project has approximately 2.4 million ounces of gold. Management sees the potential to increase the resource to 3.5 million ounces of gold over the medium term.
The proposed transaction includes a cash payment of USD 45 million, but Barsele may also partially pay in shares and warrants. The Canadians plan to carry out a capital increase and debt financing to stem the purchase price. Upon completion of the capital measure, Agnico would then hold around 15% of the shares.
At the moment, the share is in waiting mode. If the transaction is successfully completed by the end of October, the Canadians will be playing in a different league. Currently, the Company is valued at only CAD 71 million. Of course, there will be a significant dilution due to the capital increase that will then be necessary. However, this will be offset by a company valuation that should be significantly higher and advantageous for shareholders given the gold resource.
MUTARES SE & CO KGAA - Medium-term targets significantly increased
The Company's business is buying, developing and selling companies. Recently, Mutares gave a detailed insight into its ambitious growth plans during a capital markets day. At the beginning of September, Mutares raised its guidance for 2023 with the tailwind of record revenues in the first half of the year. The bar is now set at consolidated revenues of at least EUR 5 billion, which is an increase of more than 50% compared to the previous group guidance.
The significant sales growth is mainly based on the high transaction activity with seven completed acquisitions in the first half of the year. Group sales in the first six months increased from EUR 620.5 million to EUR 1,093.9 million. Net income improved to EUR 19.9 million, mainly due to the sale of the shares in STS Group AG, after a loss of EUR 4.8 million had previously been posted. The Management Board further informed about plans, according to which a rights issue and an uplisting to the Prime Standard are currently being discussed. Analysts believe that the share has an average upside potential of 16%.
SOFTBANK GROUP CORP - Large NAV discount
The group's stock has a broad portfolio of listed companies from, among others, the technology, telecommunications and Internet sectors. The largest position is the Chinese group Alibaba. Recently, these and other positions from the Middle Kingdom have come under considerable pressure. Artificial intelligence is a central field of investment for the Japanese, which is made primarily through their own Vision Fund. Due to China's state intervention in various business fields of Chinese companies, SoftBank announced to stop such investments in the People's Republic for the time being. Recently, SoftBank announced the launch of another Latin America Fund with a target volume of USD 3 billion. The shares were quoted well below net asset value. Analysts formulate an average price potential of almost 60%.
All three companies presented have potential. Whether it is investment companies like Mutares or SoftBank or the unique situation at Barsele Minerals is a matter of taste. We find the investment story of the Canadians the most exciting. If Barsele succeeds in taking over the shares in the Swedish gold project, the stock should move significantly upwards in the medium term.
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