04. August 2021 | 12:21 CET
Evotec, Barsele Minerals, Nikola - When will the starting signal follow?
It has become quiet on the gold market. After the emerging fears of possible interest rate hikes due to rising inflation, the precious yellow metal remains in the range of around USD 1,800 per ounce. The price should be significantly higher due to the continued ultra-loose monetary policy of the central banks and the highs in government debt. Given that a slowdown in bond purchases or even larger interest rate hikes is hardly possible, a rise in the gold price can barely be avoided in the long term. The opportunity for an anticyclical entry is still given.
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ISIN: EVOTEC SE INH O.N. | DE0005664809 , BARSELE MINERALS | CA0688921083 , NIKOLA CORP. | US6541101050
"[...] We quickly learned that the tailings are high-grade, often as high as 20 grams of gold per tonne; because they are produced by artisanal miners, local miners who use outdated technology for gold production. [...]" Ryan Jackson, CEO, Newlox Gold Ventures Corp.
Special situation in Northern Europe
An exciting opportunity is currently available in northern Sweden, about 500km from the capital Stockholm. Here lies the approximately 47,000-hectare Barsele project in the Fennoscandian Shield, which intersects the historically high-grade "gold line" and, from a geological perspective, represents two different mineral trends. To date, resources have been expanded from 1 million ounces to 2.5 million ounces. According to Barsele Minerals management, the project could eventually yield up to 5 million ounces of gold. In addition, there is the possibility of extracting other commodities such as silver, lead, zinc and nickel.
In addition to the exploration company Barsele Minerals, which owns 45%, the majority of 55% is currently owned by the gold producer Agnico Eagle. Agnico has also carried out exploration work over 160 km and over 400 drill holes in the past. The fact that Agnico will focus on developing new mining projects in North America in the future opens up a unique opportunity for the young company. A letter of intent was signed by Aug. 31 for Barsele to acquire the 55% of Agnico Eagle by paying USD 45 million to become the sole owner. Barsele Minerals will grant the other party 14.9% of its shares and 6 million warrants at the final closing. The project is to be financed by a convertible bond and a capital increase, which is also intended to strengthen the equity base of Barsele Minerals further.
A further 30,000 meters of drilling are now planned over the next two years. The target of the experienced management is then 3.5 million ounces. In the longer term, however, at least a doubling is expected internally. The reason is obvious. The Barsele project extends over a total of 8km. However, the resource estimate to date only covers about 3km of this section. In addition, the previous estimates are limited to a depth of 450m. However, deeper drilling has already identified further potential.
The Barsele Project is currently one of the most interesting mining projects on the market. Barsele Minerals, managed by the Belcarra Group, has many years of experience in project development. The project's development to the preliminary feasibility stage and the subsequent possible resale to larger producers promise enormous increases in the value of the shares.
You can read the full interview with Barsele Minerals CEO Gary Cope here
New blow for Nikola
The bad news continues at truck builder Nikola. Last week, the New York Attorney General's Office filed charges against founder and former CEO Trevor Milton. He resigned last September amid allegations of fraud, after which the stock exited trading with double-digit losses.
Now Nikola reported second-quarter numbers. Sales were not expected at the hybrid truck company. Earnings per share were negative USD 0.20, up from negative USD 0.16 in the same period last year. Although analyst firms were forecasting an even higher loss of USD 0.301, the stock lost more than 6% after the market opened at USD 10.40, near its low for the year at USD 9.65. Despite operational successes in recent weeks, an investment in Nikola resembles a gamble and is thus only suitable for hard-nosed investors.
Milestone payment in sight
In contrast, there is good news from Evotec. The research partnership with the pharmaceutical giant Bayer means that the M-DAX company can look forward to a milestone payment. Bayer announced that the primary efficacy endpoint was reached in a Phase IIb clinical trial with its development candidate Eliapixant for the treatment of chronic cough. The underlying compound is from Evotec.
According to company announcements, under the 2012 agreement, the next financial milestone payment would be triggered by the initiation of a Phase III clinical trial, as determined by Bayer. After the share successfully defended the support at EUR 34, the stock exited the trading session with a gain of almost 3%. In the long term, the news that the biotech company still intends to list its shares on the US technology exchange NASDAQ in 2021 should also be viewed positively.
In the long term, due to the current framework data such as national debt, low interest rates, and rising inflation, hardly anything passes an investment in gold. Barsele Minerals has the opportunity to create significant long-term value for its shareholders. The starting position of biotechnology Company Evotec is also positive. By contrast, Nikola is only something for extremely speculative investors.