August 19th, 2021 | 12:35 CEST
First Majestic, Palantir, Silver Viper - Precious metals - The calm before the storm?
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"[...] Internally we expect the resource to significantly grow the deeper we mine. [...]" Dennis Karp, Executive Chairman, Manuka Resources
For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.
Palantir buys gold?
Until this week, nobody expected Palantir (ISIN: US69608A1088) to cause astonishment in the gold scene. But now the cat is out of the bag. The tech company, which specializes in data analysis, has announced the purchase of 100-ounce gold bars worth USD 50.7 million. To that end, Palantir published, "This purchase will initially be held at a secure third-party facility in the northeastern United States, and the Company will be able to take possession of the gold bars stored there at any time with reasonable notice." The Corporation did not provide further details on the background or intentions for the purchase.
Accordingly, speculation can run wild. After all, in addition to its core business - analyzing vast amounts of data (Big Data) to predict future events for the US military, intelligence agencies and corporations - it has so far only invested in companies in the tech sector. Recent investments include Tritium, a maker of electric vehicle chargers, and cloud specialist Fast Radius. So why buy gold now? Perhaps this will benefit the precious metals sector to finally take off again.
Is Silver Viper making itself pretty for takeover?
Rising gold and silver prices would be like the cherry on the cake for Silver Viper (ISIN: CA8283341029). The Canadian junior explorer is doing well operationally and is also well-financed. The Company is mining gold and silver in Mexico. For this purpose, the junior explorer, which the Belcarra Group manages, operates the 6,880-hectare La Virginia gold-silver project in the northwestern state of Sonora. This project formerly belonged to Pan American Silver.
Last year, Silver Viper expanded the project database acquired from Pan American Silver to 80,000m through a 27,000m drilling program - during which more than 100 holes were drilled. This significantly increased the resource estimate. The Canadian junior explorer now puts the potential resource at 154,300 ounces of gold and 6,929,000 ounces of silver and inferred resources of 246,300 ounces of gold and 12.49 million ounces of silver.
Further positive news flow from the Canadians this year should be guaranteed. The "El Rubi Zone" - located only about 5km north of the previous mining area - is to be explored. Moreover, Silver Viper expects that the El Rubi zone is open laterally and at depth and can be expanded with further drilling. Experienced management is optimistic and anticipates above-average high grade discoveries.
Also important: The capital necessary, especially for an explorer, to continue the already successful search has been secured. The successful entry into the capital market has brought Silver Viper a total of around CAD 6 million. If the success story continues, the Company could quickly become a takeover candidate.
First Majestic Silver - Big bang on Friday?
Majestic Silver is often active as a takeover target. The war chest is well filled after solid figures as the Canadians set a sales record in the second quarter of 2021. From April to June, the group mined a total production of 6.4 million silver equivalent ounces consisting of 3.3 million silver and 46,544 million gold. That represents an increase of 13% and 95% respectively compared to the previous quarter. Not only did the three mines in Mexico achieve double-digit increases in silver equivalent output, but the Jerritt Canyon mine in Nevada also contributed to growth from the end of April.
In line with the production volume, sales and profits also increased strongly. At EUR 154.1 million, First Majestic achieved record sales in the second quarter. Last year - when production was partially at a standstill due to the COVID-19 pandemic - the figure was only USD 34.9 million. Net income climbed to USD 15.6 million from USD 10 million in the previous year's quarter. Reasons for the increase included: production suspensions in the second quarter of 2020, higher metal prices, and impairment charges in the same quarter last year. First Majestic raised its quarterly dividend by 33% to USD 0.006 per common share.
Palantir's gold purchase has positively surprised the precious metals sector and is causing speculation. First Majestic Silver and Silver Viper would benefit from rising prices. With the latter, investors get a very likely positive operating newsflow and takeover fantasy.
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