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February 16th, 2022 | 13:29 CET

Gazprom, Alerio Gold, ThyssenKrupp: Ukraine conflict resolution as a door opener?

  • Gold
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At the moment, the world is holding its breath. Not since the end of the Cold War have so many soldiers come together on European soil as is currently the case on the border between Russia and Ukraine. While German Chancellor Olaf Scholz is focusing on diplomacy, Kiev and the Baltic states would like to see more signals of deterrence. We will see which path is the better one or whether, in the end, a combination will once again avert the worst-case scenario. However, the fact is that the threat of war is rattling the markets. We profile three stocks.

time to read: 3 minutes | Author: Nico Popp
ISIN: GAZPROM ADR SP./2 RL 5L 5 | US3682872078 , Alerio Gold Corp. | CA01450V1040 , THYSSENKRUPP AG O.N. | DE0007500001

Table of contents:

    Justin Reid, President and CEO, Troilus Gold Corp.
    "[...] Troilus has the potential to be an entire gold belt. All of our work to date points to this, and each drill hole makes the picture we have of the Troilus project much clearer. [...]" Justin Reid, President and CEO, Troilus Gold Corp.

    Full interview


    Gazprom: Will all be well in the end?

    Gazprom has been an investor darling for years. The stock promises high dividends, plenty of energy reserves in the ground, and a unique strategic position. Gas giant Gazprom operates pipelines to both the east and west, making it ideally positioned to satisfy the world's hunger for energy. Gazprom's share has always been relatively cheap compared to Western energy companies. That was due to the ever latent threat of sanctions surrounding Russia. But what is the current situation regarding the value?

    Since Russia has been massing troops on the border with Ukraine, the share has lost around 20% of its value. However, it is noticeable that the selling pressure seems to have completely disappeared over the last few days. The market is hoping for a diplomatic solution. Part of such a diplomatic solution could also be Russian gas. In the end, a foreign policy agreement could even pave the way for a rapprochement and minimize many of the difficulties that have weighed on Gazprom's stock in recent years. While the worst-case scenario still cannot be ruled out in the upcoming showdown, the urgency and international focus on the conflict also opens up opportunities. However, if the guns on the border with Ukraine really do start thundering soon, Gazprom's stock is certainly not a buy in the short to medium term.

    Alerio Gold: Surprise potential lies dormant here

    Whenever uncertainty grows on the stock market, papers from the gold sector come increasingly into focus again. The gold price has already risen significantly recently. In the case of smaller companies, such as Alerio Gold, such euphoria usually arrives with a delay. Such companies develop gold projects, which means that concrete business activities are more important than with established gold producers. Alerio Gold, while still largely unknown, offers some interesting key data: Alerio Gold operates the Tassawini Gold project in Guyana. Gold has already been mined on the property in 2010. A historical resource of 499,000 ounces also dates from this time. To date, CAD 34 million has been invested in the project, which can be expanded in several directions.

    Guyana is located on the American continent north of the equator. It is characterized by its membership in the Commonwealth, a democratic government and laws based on Anglo-Saxon legal principles. Compared to other companies in the precious metals sector, Alerio Gold is still comparatively undervalued. In recent months, the Company has attracted new personnel in the form of consultants, successfully completed a smaller financing round, and successfully presented at investor fairs. The share has recently been quiet, but news should soon follow that will boost the value. CEO Jonathan Challis has repeatedly emphasized that the Tassawini project is much further developed than the market capitalization would suggest. In 2022, further exploration work is expected to uncover additional potential. If the gold market gains sustained momentum, this should help raise the profile of Alerio Gold's investment story.

    ThyssenKrupp is its own trouble spot

    Whenever there was a threat of war in the past, steel producers also benefited. But ThyssenKrupp's stock is currently suffering from a completely different, home-grown conflict. The steel division is in deficit. What the future holds for the former flagship is uncertain. Last week ThyssenKrupp published good figures, but the prospect of a lengthy stand-off over the steel business put investors off. It seems ThyssenKrupp wants to wait for government support and possibly restructure the unit. A swift separation would most likely go down better on the market. Even though the share price shot up significantly yesterday, things do not look good for ThyssenKrupp in the medium and long term.

    ThyssenKrupp also has little to do with the situation in Ukraine. Gazprom is, of course, much more involved. As political risk has always been priced into the St. Petersburg-based company, the coming days will be interesting. Alerio Gold could also attract more attention if the market situation remains uncertain. The Company has an advanced project with potential and, contrary to what one might hastily assume at first glance, does not operate in a politically unstable region. The stock could become a surprise candidate.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Nico Popp

    At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

    About the author

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