30. September 2021 | 14:07 CET
BYD, Barsele Minerals, GEA Group - The clock is ticking!
Rising inflation, the fear of rising interest rates and further exploding commodity prices. In addition, a looming crisis, triggered by the real estate group China Evergrande. The shadows over the partly excessively overvalued stock markets are getting bigger and bigger. Historically, a flight into crisis metals would be the logical consequence. But also, the precious metals are in the correction mode - still! In the long run, investors should think about building up positions in mining stocks.
time to read:
ISIN: BYD CO. LTD H YC 1 | CNE100000296 , BARSELE MINERALS | CA0688921083 , GEA GROUP AG | DE0006602006
"[...] The processes in Namibia are predictable and the country itself is very safe. [...]" Heye Daun, President and CEO, Osino Resources Corp.
The deadline is approaching
Will the shares of Barsele Minerals be revalued? There is still time until Oct. 31 to wrap up the promising deal with Agnico Eagle. In recent weeks, the large gold producers and the young exploration companies suffered in the course of the weak precious metals market. The share price of the Canadians, led by the Belcarra Group, fell from EUR 0.53 at the beginning of June to EUR 0.30 currently. A unique opportunity if one takes a closer look at the plans of Barsele Minerals.
Today, the Canadian Company holds 45% in the eponymous Barsele project in northern Sweden, which covers 47,000 hectares and, according to management, promises a long-term potential of 5 million ounces of gold. By-products such as silver, lead, zinc and nickel exist in the deposit. The remaining 55% belongs to the industry giant Agnico Eagle, which wants to pull up stakes sooner rather than later to put its complete focus on North America. The groundwork done by the major in the past is enormous. Over 160km and 400 drill holes have been completed. Another 30,000 meters of drilling are on the agenda for the next two years. As a result, the resource estimate is expected to increase to 3.5 million ounces.
A twice-extended letter of intent for the 100% acquisition by Barsele Minerals runs until the end of October. The purchase price of the remaining 55% is USD 45 million. In addition, Barsele Minerals will grant the other party 14.9% of its shares and 6 million warrants. In addition to the issuance of a convertible bond, the transaction is to be financed by a capital increase.
The market capitalization of Barsele Minerals is currently EUR 44.26 million. Already 5 years ago, when the resource estimates were significantly lower and the gold price was quoted in the range of USD 1,350, the analysts of RBC valued the Barsele project at USD 375 million. Should the deal be in the bag, the team around CEO Gary Cope will significantly accelerate the project planning up to the preliminary feasibility stage. A resale to a larger producer cannot be ruled out after that, but most likely at significantly higher prices than the current EUR 0.30 per share.
Deals without end
Things are going well at the Chinese electric car manufacturer BYD. Sales are running at full speed and are being expanded in all parts of the world. The latest deal is a distribution agreement with a dealer in the Greek capital Athens, which includes the delivery and service of battery-electric trucks in Greece.
A few days ago, the Company also announced the delivery of e-double-deckers to Leeds. In cooperation with the British partner Alexander Dennis Limited, 5 BYD ADL Enviro400EV e-double-decker buses were handed over to the West Yorkshire Combined Authority and bus operator First Bus. Two all-electric BYD Midi E buses also found their way to Ancona in Italy, which will now be operated by Conerobus, a public transport company in Ancona.
In contrast to many other Chinese technology stocks, the Build Your Dream Company shows relative strength. At the current level of around EUR 26, the share price is well supported. If the support holds, this offers good short-term entry opportunities.
Machinery and plant manufacturer GEA is planning a significant increase in sales of between 4% and 6% per year, with a rising operating margin of over 15%, when it presented its "Mission 26" at its specially organized Capital Markets Day in London. To achieve this ambitious goal, the Company intends to increase its spending on research & development by around 45% over the next few years.
In total, annual investments of EUR 200 million are to be made. The GEA Group could also grow through acquisitions. "We have set ourselves the goal of being at the forefront of the mechanical and plant engineering industry," Company CEO Stefan Klebert said in a statement. An increase in the distribution to shareholders is also under discussion, he added.
In addition to the stock market audience, who rewarded the statements with a price increase of 4%, various analyst firms were also impressed by the statements. The major Swiss bank UBS left its rating for GEA at "Buy" with a price target of EUR 48. JP Morgan left the stock at "neutral" with a price target of EUR 36.
Inflation worries, fears about possible interest rate hikes, and a looming real estate scandal worries the markets. Gold is in demand in the long term. Barsele Minerals could lift to higher valuation regions by completing the full purchase of the Barsele project. BYD and GEA Group remain interesting.