April 26th, 2023 | 08:30 CEST
Deutsche Bank, Tocvan Ventures, Barrick Gold - Turbulence in the financial system and rising gold price
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"[...] Our projects are at the initial, high reward exploration stage. [...]" Humphrey Hale, CEO, Managing Geologist, Carnavale Resources Ltd.
Deutsche Bank - Ahead of the quarterly figures
Even before the FED decision, Deutsche Bank will present its Q1 figures on April 27. Good figures could reassure shareholders who have been sleeping uneasily since the jump in credit default swap spreads (CDS). On March 24, there was panic that Deutsche Bank might also run into turbulence. Fortunately, the super disaster did not happen. Deutsche Bank's derivatives portfolio stands at EUR 49.6 trillion, and a collapse probably could not have been absorbed.
In any case, expectations for Deutsche Bank are high after its best year in over a decade. They want to further increase their pre-tax profit of EUR 5.6 billion. At least, that is how analysts see it, assuming pre-tax earnings of around EUR 6.4 billion. The main driver here is likely to remain DWS's asset management. 10.7% of last year's pre-tax profit is attributable to DWS, which accounts for only 3.6% of assets. By 2025, the bank's CEO, Christian Sewing, wants to increase earnings further while raising the return on equity by more than 3%.
The virtual annual general meeting is scheduled for May 17, when shareholders can vote on the dividend proposal of EUR 0.30. At a current share price of EUR 9.63, this would mean a dividend yield of 3.1%. That means the share has also pulled back significantly from the low of EUR 7.945. In April, 5 of 7 analysts issued a Buy recommendation with price targets between EUR 15.00 and EUR 19.50. Only Berenberg and Barclays put the stock on Hold.
Tocvan Ventures - High gold recovery rates
Canadian company Tocvan Ventures recently extracted more than 1,400 tonnes of gold and silver material from its Pilar gold-silver project in Mexico. The material is being recovered using a heap leach process by grinding and screening the rock. The leach pond was sealed to prevent soil contamination. On April 11, the Company announced the results of the diagnostic precious metal leaching study. Five composite samples were taken from different zones and showed high recoveries of 95-99% for gold and 73-97% for silver. The samples contained up to 24.9 g/t gold and 290 g/t silver.
The bulk of the precious metals can be extracted via the gravity enrichment process. Gravity concentrate grades ranged from 35.6 to 290.3 g/t gold and from 53 to 1,152 g/t silver. On April 20, there was an update on the operating plans. The bulk sample had been crushed by this time. The first 15 samples averaged 1.64 g/t gold. 101 additional samples were sent to ALS. In the new drilling programme, 83 holes are to be drilled with a total length of at least 10,000 m. The aim is to investigate zones parallel to the Main Zone in more detail. The El-Picacho project is also scheduled for a 14,000 m drill programme and 2,000 m of prospecting.
Further information can be found at researchanalyst.com. (https://researchanalyst.com/en/updates/stock-news-tocvan-ventures-on-the-rise) So the Company is getting closer to production. Some investors have already recognized this, and due to the high demand, the share price has more than doubled since the end of November. Since the beginning of March alone, the share price has increased by more than 75%. The share is currently quoted at CAD 0.72, giving it a market capitalization of CAD 27.9 million. The management has a stake of about 10% in the Company, which is a good sign. Further tailwind could come from positive analysis results.
Barrick Gold - Production declines in Q1
Since April, the gold price has been hovering around USD 2,000. One of the largest gold producers, Barrick Gold, reported a 4% YOY decline in gold production and a 12% decline in copper production for Q1. The decline in gold production was due to a weak start to the year at its Nevada joint venture and a slow start to the year at Kibali, while copper production was impacted by a weaker quarter at Lumwana. The Company's Nevada operations recorded lower output due to maintenance.
The Company's Pueblo Viejo expansion is expected to boost production, and Cortez, Turquoise Ridge and Hemlo will show significantly higher production compared to last year. The Company's full-year copper production will also be higher. All-in sustaining costs are likely to be most important when Barrick releases its official quarterly figures on May 3. Experts expect that costs have increased and will only start to decrease in the second half of the year.
Investors who want to protect their money from inflation can turn to Barrick Gold instead of physical gold. When the gold price rises, the share price rises, and in addition there is a performance dividend as well as a standard dividend. Last year, shareholders received USD 0.65. With a current share price of USD 19.07, the dividend yield is 3.4%. In the past 90 days, there were 26 analyses. Only 1 analyst recommended Sell, 8 recommended Hold and 17 recommended Buy. On average, the price target was USD 22.88.
Higher interest rates and the FED's predicament are impacting the markets, including financial institutions. Deutsche Bank has the chance to reassure investors with its quarterly figures. The turmoil in the financial system is driving the gold price. Tocvan Ventures recently reported high gold recovery rates at its Pilar project in Mexico. The Company is nearing production. Barrick Gold had a weaker first quarter. Here, when the quarterly figures are presented, one should keep an eye on the total costs.
Conflict of interest
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