October 7th, 2021 | 13:38 CEST
Deutsche Telekom, Troilus Gold, Barrick Gold - Time for the safe haven
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"[...] Both the geology and the infrastructure around the project make for a very attractive cost structure. We expect to be able to produce at 50% of the current gold price. [...]" Bill Guy, Chairman, Theta Gold Mines Limited
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.
Barrick Gold - Target zone within reach
As already written several times, the general conditions for gold are better than ever in the long term. Nevertheless, the precious yellow metal, which historically acted as a safe haven or inflation hedge especially in times of crisis, is in correction mode. Since the high in August of last year at USD 2,69.70, it went down. An interim low was reached in early December 2020 at USD 1,676.92 per ounce, which was confirmed again in June.
Gold is currently trading at USD 1,755.00; a sustained slide below the USD 1,750.00 mark will likely result in another test of the low as mentioned above, around USD 1,680.00. Should this critical mark fall, our target zone between USD 1,620.00 and USD 1,650.00 should be reached. In the long term, this represents a more than attractive anti-cyclical entry opportunity to participate in the expected upward movement, which should push the precious yellow metal into significantly higher realms in the long term.
The chart situation of the second-largest gold producer in the world, Barrick Gold, is similar. Should the support around USD 18.00 fall, the next price target would be at USD 16.00. Here is the 78.6% Fibonacci retracement of the upward movement that has been underway since March 2020.
Troilus Gold - The good into the potty
There is something good about the ongoing correction in gold mining stocks, especially if investors can view the falling share prices from the sidelines. The entire sector, whether fundamentally strong or weak, is collectively falling. Bucking the trend, like Cinderella, one should start picking favorites for the next upward wave. Troilus Gold should be at the top of the watch list and not just for retail investors. Despite consistently excellent drill results and the ever-closer goal of becoming a gold producer by 2023 at the latest, the share price has fallen in the last 12 months and by almost 50% to CAD 0.73.
The eponymous project, the Troilus mine, is located in the leading mining district of the Canadian province of Quebec, where the Company owns strategic properties on a footprint of 1,420 sq km. Between 1996 and 2010, 2 million ounces of gold and around 70,000t of copper were already produced there. Since the acquisition of the project in 2017, continuously successful exploration has uncovered the enormous size potential of the gold system at the project site with tremendous mineral resource growth. The resource estimate increased over a total of 250,000m to over 8.1 million ounces of gold following the 2020 drill programs.
New results from the J Zone have further confirmed and extended a parallel zone of mineralization on the west side of the primary ore body by up to 50m along dip. This expanding parallel zone will positively impact the overburden ratio and overall economics of the project in the upcoming Preliminary Feasibility Study, particularly as the majority of the 850m zone defined to date is located in areas of the PEA pit model previously considered to be stockpile material.
Since the 2020 Mineral Resource Estimate, over 81,450m have been drilled. The Company intends to continue drilling at a rate of approximately 10,000m per month until year-end. Following the results, several analyst firms commented positively on Troilus Gold's valuation. Laurentian Bank Securities assigned a "buy" rating with a price target of CAD 3.30, while analysts at Stifel also see a buy candidate with a target of CAD 4.00. Since May, Troilus has been on the list as a top pick at Cormark Securities with a price of CAD 4.50.
Deutsche Telekom - SoftBank gives up
A bang for the T-share. The stock fell 5% to EUR 16.77 in response to a Bloomberg report that SoftBank is selling a block of shares it recently received. Goldman Sachs acquired around 90 million Deutsche Telekom shares at a price of EUR 16.95, equivalent to EUR 1.5 billion.
The Japanese had received a package totaling 225 million Deutsche Telekom shares in return for reducing their stake in Deutsche Telekom subsidiary T-Mobile US, which enabled Deutsche Telekom to increase its stake in the US subsidiary. Despite the somewhat negative news, major Swiss bank UBS maintained its buy rating with a price target of EUR 24.20.
Fears of an imminent correction on the stock markets are increasing, and the framework data for the precious metal gold could hardly be better in the long term. Troilus Gold should be among the favorites in the next upward movement. The gold standard Barrick is also slowly becoming interesting. At Deutsche Telekom, the SoftBank partial sale changes little; the share is also promising after the price has calmed down.
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