28. July 2020 | 07:55 CET
Desert Gold, NetCents, SolGold, Triumph Gold - the big push is yet to come
Since the beginning of 2017, Bitcoin has been trading at over USD 1,000.00 and the establishment of this psychological mark has been celebrated by the crypto community as a historic breakthrough of a new system. A system that will continue to exist as an alternative to fiat money and as a new currency. The main argument for the Bitcoin was and still is that the number is finite. During 2017, more and more people became interested in the digital currency and the price escalated to USD 19,738.00. Even gold, as the oldest currency in the world, is almost finite, because it cannot be printed and must be found and mined at great expense. Since the beginning of the week, the price of gold has been trading at a historical level of around USD 1,940.00 and the question arises as to how much further the value of the precious metal can increase.
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ISIN: CA64112G1054 , CA25039N4084 , CA8968121043 , GB00B0WD0R35
"[...] I wouldn't be surprised if the project ends up showing more than 5 million ounces. [...]" Gary Cope, President and CEO, Barsele Minerals
Is the Bitcoin about to have a renaissance?
Payment provider NetCents has made numerous announcements in recent weeks, which may indicate that the interest in crypto currencies is currently experiencing a small comeback. More and more people want to use their balance in Bitcoin and other currencies in their everyday lives, and payment options are needed for this. After the drastic price slump after 2017, the air was out of the industry - the community decimated. It remains to be seen whether the increase in the money supply by the central banks will help Bitcoin experience a renaissance. At the current level of around USD 10,800.00, the old high is still far away.
Gold is only at the beginning
The situation is different and clearer now for gold. While the price of the precious metal has reached new territory, the trend has not yet reached the broad investment community. At the moment hydrogen and vaccines still enjoy the attention of a large part of the interested investors. Although the money supply is increasing significantly every day, due to the effects of the Corona Pandemic, the circle of gold investors is still relatively small.
After all, central bank measures will soon be ten times as high as in 2008 and 2009, when the price of the troy ounce rose from less than USD 800.00 to over USD 1,900.00. It is well known that profit lies in purchasing, and therefore a good time to invest in the area of the gold industry that promises the highest returns - exploration.
Precious metal with potential
The largest gold producers around the globe are in a dilemma. On the one hand, they can sell gold at a high price, but on the other hand, not only are reserves shrinking, but future access is becoming increasingly complicated. For example, the reserves of the largest producers have shrunk by 34% since 2012. In 2000, it took ten years for a discovery to be in production. It is now expected that it will take up to thirty years before major discoveries can be mined. No wonder then, that Bank of America believes a gold price of USD 3,000.00 is possible in 2021.
Potential in West Africa
Because gold cannot be printed, but must be discovered through exploration, this area is of particular importance for the industry. Usually successful exploration companies come into the focus of large producers and are taken over if an attractive amount of reserves is available. Desert Gold Ventures plans to discover up to six million ounces of gold on its over 400 km2 projects in West Africa. The market value of Desert Gold is approximately CAD 32 million. With positive news about further discoveries from the recent drilling program, interest in the company and the share price should continue to increase. B2Gold, Barrick Gold and Iamgold with mines are already positioned in the neighborhood. There is therefore no shortage of solvent potential buyers.
Successful giant with expertise
SolGold is a major market player in Ecuador and has explored around 10% of the world's newly discovered gold reserves in the last ten years. In addition, SolGold claims to be the only mining company in the world with a gold and copper pipeline of opportunities with the same geology, regulatory, fiscal and social environment. This is an advantage over other companies that have to do a lot of development work every time they decide to pursue a different project in a different country. SolGold's market capitalization of approximately CAD 800 million is far below the value of the Alpala project alone, not counting the value of the 13 other projects.
Till freshly filled
Triumph Gold is looking for more gold deposits in the Canadian Yukon to make the bride pretty. The company has raised around CAD 6.3 million in fresh capital in recent weeks and has thus successfully completed the financing of further drilling. Newmont is already the largest shareholder of the company and already active in the neighborhood. With a market value of around CAD 50 million, a takeover with a decent premium for the major shareholder would be easy to make. However, the results of the next drilling operations will probably be awaited.