Close menu




July 16th, 2021 | 10:20 CEST

Gazprom, Desert Gold, Orocobre - Raw materials remain on course for growth

  • Commodities
Photo credits: pixabay.com

Raw materials are an important industrial commodity. If there are no raw materials, there are no industrial goods. When you think about this, it quickly becomes clear why commodities will always remain an important investment topic. Of course, there are phases in which some commodities are more attractive than others. The following three stocks can be used to take advantage of precisely this circumstance. Which stock has the greatest potential?

time to read: 5 minutes | Author: Carsten Mainitz
ISIN: GAZPROM ADR SP./2 RL 5L 5 | US3682872078 , DESERT GOLD VENTURES | CA25039N4084 , OROCOBRE LTD | AU000000ORE0

Table of contents:


    Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
    "[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG

    Full interview

     

    Gazprom - Nord Stream 2 expected to be completed by the end of August, record dividend

    As of last week, Gazprom is once again Russia's most valuable company. After the 40% slump in February 2020 as well as the further loss of almost 25% of the value in the further course, among other things due to the difficulties with the Nord Stream 2 project, the share has slowly but steadily fought its way back and last week replaced Sberbank as the most expensive Russian Company. The current weakness of Sberbank, which like almost all European bank stocks, is currently exposed to increased price pressure, helped, but Gazprom's rally is still quite impressive. Currently, the share price is only 13% below the highest price of the last five years. There are probably two main reasons for the current strength of the world's largest natural gas supplier: 1 - Excellent quarterly results and 2 - The reduced interference from the USA regarding the completion of the Nord Stream 2 pipeline.

    There is not much to say about the quarterly figures for Q1/2021 presented in mid-May. The quarterly surplus of about 362.6 billion rubles was the highest in nine quarters, and gas production increased by about 15% (exports to non-CIS countries: +28%). Concerning the construction of Nord Stream 2, the USA seems to have changed course under the new Biden administration. The US is no longer trying to prevent construction but is urging Germany, in particular, to provide security guarantees for the Eastern European countries bordering the pipeline, such as Ukraine or the Baltic states. For Gazprom, these are rosy prospects. And it should also pay off for investors. The analysts at Bloomberg Dividend Forecast expect a sharp increase in the dividend now due in July to the equivalent of EUR 0.53 per ADR traded in Germany (comprising two regular Gazprom shares). The dividend yield would thus reach more than 8%. Analysts also expect a similarly high dividend for the next few years.

    Desert Gold Ventures - Drilling program fully on track, completion imminent

    Desert Gold Ventures is a Canadian gold exploration and development company focused on deposits in the West African nations of Mali, Ghana and Rwanda. Currently, the focus is on two exploration projects in Mali, the fourth-largest gold producer on the African continent. The smaller Djimbala project is located in southern Mali on the border with Guinea. There are several producing mines in the vicinity. Initial drilling has encountered gold grades of up to 12.65 g/t at 3m depth. The larger project is located in the west of the country on the border with Senegal. Named after the shear zone between Senegal and Mali, the SMSZ project (Senegal-Mali Shear Zone) covers 410 sq km. It is the largest contiguous non-producing land package in the region. It also has quite a few producing Tier 1 gold mines in close proximity.

    Initial SMSZ sampling indicates a gold grade of 6.28 g/t over 13 meters. In addition, more than 100 magnetic and/or geological anomalies have been discovered in the area to date, which will be further investigated. To this end, Desert Gold has initiated a 20,000m drill program. The objective is to discover a Tier 1 gold deposit associated with the regional gold-bearing structural systems that run through the SMSZ project. As of mid-June, the Company has already reported 82% drilling progress. To date, more than 230 drill holes covering 16,400m have been completed. Results for the approximately 14,000 samples taken are expected in a timely manner. Completion of the program is scheduled for late July/early August. In Q4/2021, the Company aims to have prepared a NI 43-101 compliant resource estimate. By then, the share, which last year corrected to around 50% of its all-time high and has since been stuck in a sideways movement, should show more movement again.

    Orocobre - And the rally continues

    Orocobre Limited, based in Brisbane, Australia, is one of the most important suppliers of lithium, which is required in the production of rechargeable batteries. Lithium is thus one of the essential raw materials for electromobility. In April, Orocobre decided to merge with one of its main competitors, Galaxy Resources. After the merger, which has a volume of around AUD 4 billion and should be completed by August at the latest, Orocobre will have a share of around 13% in the global lithium market and become one of the top 5 lithium suppliers. The Company, which will then have an annual capacity of about 40,000t of lithium carbonate p.a., produces in Argentina, where the raw material is extracted from both rock ("rock") and leach ("brine"). Given the unbroken trend towards electric mobility, the price of lithium has risen sharply in recent months. Both this development and the general view of analysts that a merger will have a positive impact on the company's market power have strongly boosted Orocobre's share price. Recently, the shares hit another all-time high after analysts at Australian asset manager Ord Minnett raised their price target for the stock by 14% to USD 8.45 and recommended a buy.

    In view of the declarations of the automobile manufacturers that the production of internal combustion engines will be discontinued in the foreseeable future and also the political guidelines that have now become known (the EU does not want to allow new internal combustion engines by 2035 at the latest), the price of lithium is not expected to fall any time soon. Although efforts are being made in many places to develop procurement alternatives, the production of battery-grade lithium carbonate is not trivial. Orocobre increased the share of battery-grade material in June from 33% to 66% compared to the same month last year and thus belongs to a class of producers that will certainly be relevant for a long time to come.


    All three shares currently represent attractive investment alternatives. With its natural gas product, Gazprom stands for the transit period towards sustainable energy production, without which it will not be possible to achieve the climate protection goals. Therefore, the Company is currently still quite favorably valued. Desert Gold Ventures is certainly the riskiest of all securities and the one that offers the best opportunities. At the latest, with the NI 43-101 resource estimate, the price should move upwards again. Orocobre stands for the future. Electromobility without lithium will - probably - not exist in the foreseeable future.


    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 in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on news.financial. These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.

    The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.


    Der Autor

    Carsten Mainitz

    The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.

    About the author



    Related comments:

    Commented by André Will-Laudien on March 27th, 2024 | 08:30 CET

    Watch out: DAX record chase! Automotive stocks in the fast lane: Mercedes-Benz, Globex Mining, VW and Tesla

    • Mining
    • Commodities
    • hightech
    • Electromobility

    The DAX 40 index is chasing from one high to the next, surpassing the 18,400 mark yesterday. In addition to artificial intelligence, it is primarily high-tech and defense stocks that are moving the market. The automotive stocks are still in the doldrums, as an expected decline in GDP also means smaller household budgets. Nothing is worse for the industry than the postponement of new car purchases until next year. The stockpiles are getting bigger, and dealers are plunging into desperate discount battles. However, the market is changing noticeably. Currently, there are clear buying candidates; we analyze the current situation.

    Read

    Commented by Juliane Zielonka on March 22nd, 2024 | 07:45 CET

    BYD, Globex Mining, Mercedes-Benz shares: The energy transition is picking up speed with these companies

    • Mining
    • Commodities
    • Electromobility
    • renewableenergies

    BYD in China is regarded as innovative and successful with its wide range of models and brands. The Company has become one of the top ten car manufacturers and is the global leader in the production of new energy vehicles (NEVs). In the fourth quarter of last year, BYD even overtook Tesla with over half a million electric vehicles sold. BYD is now pushing further into international markets in order to maintain its growth trajectory. The increasing demand for electrification also means a higher demand for the corresponding raw materials. Globex Mining is well positioned in this regard; with 247 different projects and over 40 years of industry experience, investors benefit from the unbeatable expertise of the experienced management team. Mercedes-Benz leadership has reason to rejoice. The figures from the last financial year are solid, and the salaries of the Executive Board have been generously increased. Who is really picking up speed now?

    Read

    Commented by Stefan Feulner on March 5th, 2024 | 08:55 CET

    Globex Mining, Rheinmetall, Fisker - Correction nearing its end

    • Mining
    • Commodities
    • Gold
    • armaments
    • Automotive

    The German economy is shrinking, and there is no sign of an end to the downward spiral in the current year. Only the defense industry, which was dubbed socially harmful before the Ukraine conflict, is acting as a growth engine, with shares in the sector rushing from one high to the next. The growing and likely continuing demand for defense goods is increasing the need for critical metals. After a prolonged correction, copper, lithium, and others may now have completed their bottoming out.

    Read