05. October 2020 | 11:02 CET
Franco Nevada, Bitcoin, Silver Viper: What is still stable today?
It could not have come more bizarre. Donald Trump leaves for medical care because of a positive Covid-19 test; the capital markets promptly go diving. The most significant protagonist in terms of trivialization is himself subject to infection, a showpiece of presidential role model function. Now we hear that the cool head of state will soon recover - he must, because the U.S. election is already casting its shadow. In the search for stability, precious metals were able to succeed in the face of falling stock markets. Gold reached the USD 1,900 mark again, and silver touched the USD 24 mark. In Friday's late trading, the situation for stocks normalized after the 2% decline in Europe, and the Dow Jones regained the significant 27,700 point mark.
time to read: 2 minutes by André Will-Laudien
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.
Franco Nevada - A rock in the surf
If you are looking for stability, Franco-Nevada is the right place for you. The Canadian company, which is based in Toronto, generates annual sales of over USD 800 million with royalty and streaming revenues. The company has interests in silver, gold, platinum metals, oil and gas, and other resources.
It focuses on inventory revenues from land and concession leases and acquisitions in the resource sector. Franco Nevada now owns more than 70 properties worldwide and generates ample cash flows from various resource sources through contracts with the mining companies. This business model may sound boring at first glance, but in our turbulent times on the stock markets, it is highly stable and profitable. Profits are rising continuously, and so is the chart. Since the beginning of 2020, Franco-Nevada has grown by over 30% and has paid a regular quarterly dividend. Very easy on the nerves.
Bitcoin - 10% weekly volatility is normal
The Bitcoin owner has always been confronted with increased fluctuation intensity. Thus the prominent cryptocurrency per annum could increase by a good 25%, but the range provided extreme values from USD 5,000 to 12,000 - that is far over 100% volatility. Although the fever curve in the polls for the U.S. election shows greater stability, the outcome of the election still remains an open race and whether the results will ultimately be recognized is also up in the air.
In 2020, the index of political uncertainty surveyed by the U.S. Federal Reserve reached its highest level since the beginning of the financial crisis in 2008. Bitcoin is still almost USD 9,500 away from its high of USD 20,000 in January 2018, so it would have to double. However, supporters of the crypto world see gold-like qualities in the digital currency. For speculative investors and fans of alternative forms of investment, Bitcoin is undoubtedly worth a look.
Silver Viper - Gold and Silver from Mexico
Silver Viper is a Canadian-based junior exploration company with properties in the northwestern Mexican state of Sonora. Silver Viper's share price lost approximately 30% from its recent high of CAD 0.75. This was due to a sharp drop in the price of silver from USD 29 to a low USD 22 in September 2020, as well as the mandatory exercise of over 7 million warrants until October 8th. If all warrants are exercised before this expiration date, the company expects total gross proceeds of approximately CAD 2.8 million - good money for new drilling and further development.
The market value, even after the capital increase, is only CAD 35 million, not too high a price given the recent drilling results in July and August of this year, as the price of silver has also risen by 80% since the March sell-off. Drilling at the El Rubi Zone returned average gold and silver grades of 38 g/t Au and 0.76 g/t Au over 110 metres, with maximum values astounding 854 g/t Au and 20.7 g/t Au.
As political and economic uncertainties continue to rise, the fluctuations in the capital markets will continue. Anyone with the right nerves of steel and a speculative stance can undoubtedly get involved in the Silver Viper share. Compared to Franco-Nevada and the volatile Bitcoin the risk here is in the middle range. After all - some commodity experts still expect a century's rally in the silver price. That there will continue to be considerable fluctuations is pre-programmed in an election year.