May 27th, 2021 | 11:11 CEST
Bitcoin Group, SUSE, Barrick Gold, Troilus Gold - Gold is back!
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"[...] In our experience, the local communities are supportive and friendly. [...]" Steve Cope, President, CEO and Director, Silver Viper
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Bitcoin Group - A shot across the bow
The trading book was briefly halved in value. Some media reported the high cash coverage of Bitcoin Group SE's stock market value in recent weeks. It helped the share price rise a few notches, which were driven to lofty heights by the spot price of Bitcoin. The management itself had still pointed this out in April.
Bitcoin Group SE's cryptocurrency holdings reached a new high at the time, as the value of digital assets held in treasury more than doubled from the level as of Dec. 31, 2020, to around EUR 210 million, meaning that treasury holdings in coins covered around 70% of the market's capitalization.
With the recent correction, these ratios have probably changed to the disadvantage of Bitcoin Group, which also explains the share price crash from EUR 60 to below EUR 40. Despite the current turnaround in the crypto market, the share price does not want to recover. Therefore, we can be curious about the next Ad Hoc of Bitcoin Group because trading will continue to flourish even with weaker prices.
SUSE - Restrained start on the stock market, but at least it made it
IPOs are booming in Germany right now, but many investors have nevertheless become more cautious recently. The strong fluctuations in the capital markets and the cancellation of the new issue of the Internet car dealer MeinAuto had also caused uncertainty for the Nuremberg Linux software provider SUSE S.A. in the run-up.
And so, the Company's entry onto the trading floor was somewhat bumpy. At the debut in Frankfurt, the first price of EUR 29.50 was even below the offer price of EUR 30, set after several reductions of the bookbuilding spread. Although SUSE waived a top-up option, it was able to rely on solid anchor investors. The US investor Capital Research and the Singapore sovereign wealth fund GIC alone subscribed to SUSE shares for around EUR 340 million. The Company, founded in 1992, will receive more than half a billion euros from the IPO, which it will use to reduce its debt of around EUR 1.2 billion.
SUSE owner EQT will receive a lavish payout of EUR 570 million from the IPO but will remain on board as a 75% shareholder. CEO Di Donato initiated the IPO of the Linux specialist, symbolically subscribing shares for more than EUR 8 million herself. Overall, we are positive: SUSE SA is an enrichment for the German stock market with a good long-term story.
Barrick Gold - Gold shines again
Anyone betting on gold should also keep an eye on the "new gold." The run on cryptocurrencies, which we could observe in recent months, was also a consequence of the enormous liquidity provided by the US Congress and the Federal Reserve. However, the M2 money supply has declined from 27% growth in February to 24% in March. That could explain why the Bitcoin rally has stalled in recent weeks alongside the ban in China.
Gold, on the other hand, is buoyed by inflation concerns and political uncertainties. Fundamentally, the precious metal owner wants the value to be preserved in difficult times. This objective can be achieved with solid gold stocks such as Barrick Gold. The world's second-largest gold miner was still burdened with a debt mountain of more than USD 13 billion until 2013, but now the net debt is down to zero. The current balance sheet has strong liquidity of over USD 5 billion, and the quarterly dividend has been tripled.
Once the EUR 20 mark is overcome, further gains to the 2020 high of EUR 25 beckon. Whether the all-time high of EUR 40 will be seen again will certainly depend mainly on the gold price, but it has also broken out upwards at the USD 1,850 mark.
Troilus Gold - Area expansion through acquisition
In the middle of Quebec, we come across an interesting precious metals project, which has been owned since 2017 by Canada's Troilus Gold Corp. The former Troilus mine, located northeast of the Val-d'Or district, produced a full 2 million ounces of gold and nearly 70,000 tons of copper between 1996 and 2010. It is now coming back into focus.
Several points put this project in a good light. The infrastructure on site is excellent, as the mine has been open pit for many years. Recent measurements indicate that gold grades are 0.84 to 0.87 grams per ton, indicating open pit exploitation. Management has also made an impeccable impression to date.
Troilus Gold Corp. has broadened its scope somewhat with this shrewd acquisition. The complete acquisition of all outstanding common shares of UrbanGold Minerals Inc. leads to an expansion of the exploitation area from 35,000 to more than 140,000 hectares. In 2020, Troilus significantly expanded its land package to over 107,000 hectares, making it the largest claim holder in the Frotet-Evans Greenstone Belt. Drill-ready targets across the consolidated land package now offer further growth potential, with feasibility study work to follow in the second half of the year.
The combination of UrbanGold with Troilus will be of significant benefit to shareholders of both companies, as the development of the combined property can now be undertaken more efficiently. Troilus shares reacted positively to the deal, swinging upward from CAD 1.14 to CAD 1.30. The new share count is 151.7 million, representing an aggregate market capitalization of approximately CAD 192 million. The Troilus story encourages entry even at the elevated level.
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