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November 1st, 2021 | 13:20 CET

Bayer, MAS Gold, Salzgitter - Positive turnaround

  • Gold
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At chemical and pharmaceutical giant Bayer, the mood continues to brighten following the important decision of the European Patent Office. Also, the number season, which has been running for weeks, gives the markets an additional boost with solid figures and forecast increases. New highs in the most critical global stock indices are the result. On the other hand, the high inflation rates are a cause for concern, although they continue to be underestimated by the monetary watchdogs. The still weak precious metals markets could therefore experience a boom in the coming months.

time to read: 4 minutes | Author: Stefan Feulner
ISIN: BAYER AG NA O.N. | DE000BAY0017 , MAS Gold Corp. | CA57457A1057 , SALZGITTER AG O.N. | DE0006202005

Table of contents:

    Substantial deposits

    Inflation as far as the eye can see - whether oil, gas or chips for the automotive and entertainment industries. Everything is becoming more expensive, and price increases have society under their spell. Those who subscribe to the central banks' view that this is only a temporary phenomenon can rest easy. However, the vast majority, economists and analysts included, see a permanent problem rolling towards us here. Even if gold and silver are still correcting after the past year's highs, the precious metals offer protection against further monetary devaluation in the long term. Both gold in physical form and shares in gold producers or mining explorers is a proven antidote here.

    A small exploration company at the beginning is MAS Gold. The conditions that the experienced management around CEO Jim Engdahl has built up are promising, especially if one considers the current stock market valuation of a manageable EUR 7.50 million. They are promising primarily because MAS Gold is focused in one of the best mining regions in the world, the La Ronge greenstone belt in Saskatchewan. Over 1 million ounces of gold are still believed to be in the ground in the area, which is equipped with world-class infrastructure. Since the 1940s, exploration has outlined numerous gold deposits and showings, including past producers such as the Komis, Jolu, Star Lake, Contact Lake, Roy Lloyd, Golden Heart and Jasper mines. The 100% owned Preview-North Lake and Greywacke Lake and Point Advanced properties operated by MAS Gold Corp. may host similar gold deposits.

    Exploration work always proceeds in consultation with the community and partners, including Sprott Securities, to create economic, social and environmental benefits. The strategic approach is what is known as a "Hub And Spoke" model. The concept is based on the idea that mineralized material from various satellite deposits will be consolidated into one centrally located facility near North Lake, creating the opportunity for efficient operations and thereby generating significant cost savings.

    In addition to a small private placement of just under CAD 40,000, MAS Gold successfully completed its early warrant exercise incentive program. A total of 23,517,353 common shares of the Company were issued due to the exercise of 23,517,353 previously outstanding share purchase warrants, raising total gross proceeds to the Company of CAD 2,565,199.60. MAS Gold intends to use the net proceeds to continue the recent successful drill programs at Greywacke North and North Lake gold deposits. Be sure to put this exciting Company on your watch list.

    Important decision

    The attack by several generic drugmakers regarding the revocation of patent protection for the anticoagulant Xarelto has been fended off, at least for now. According to the pharmaceutical and agrochemical group, the European Patent Office overturned a decision in the first instance, upholding the disputed patent on the once-daily administration of the anticoagulant, the Company announced in Berlin on Friday. It covers most indications, a Bayer AG spokesman said.

    The next step for the generic competitor would be to challenge that decision at the state level. As a result of the decision, the patent now remains valid until mid-2026. This decision is significant for the Leverkusen-based Company, as Xarelto is considered an absolute cash cow at Bayer headquarters. In 2020 alone, the blood thinner generated sales of EUR 4.5 billion, which corresponds to a share of more than 10% of total sales.

    Following the decision of the European Patent Office, analyst Richard Vosser of JP Morgan came forward. He said the decision was positive for the DAX-listed Group. So far, he had only taken into account the patent protection for Bayer's anticoagulant until 2024 in his model for Bayer. Therefore, he now sees room for improvement in his valuation of the DAX group. The price target was left at EUR 67.00, and the rating also remained at "overweight".

    Fully on course

    Following the solid key data on the nine-month figures, investment bank Jefferies sees Salzgitter AG on a good track. The rating was left at "buy," and the price target of EUR 36.00 was also confirmed. Considering that sales have already reached EUR 605 million after three quarters, analyst Alan Spence considers the confirmed annual target of EUR 600 million to EUR 700 million to be a very conservative estimate. He views the key data as very positive.

    The main sales drivers from January to September were the flat steel and trading divisions. As already mentioned, the annual forecasts were confirmed. However, the supply chain disruptions and their effects, which have also affected some of the Group's companies since the end of the summer quarter, could be a hindrance. Sales are still expected to rise to EUR 9.0 billion in the course of the year. The complete set of figures will be announced on November 12.

    Positive reports enabled Bayer to recover from its lows in recent weeks and still have significant upside potential, while Salzgitter shone with solid figures. The mining explorer MAS Gold also has considerable potential if the results continue to be positive, especially given a possible rise in the precious metals markets.

    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 in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

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    Der Autor

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

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