October 29th, 2021 | 13:10 CEST
Gazprom, Osino Resources, Deutsche Telekom: Will 2022 be another crisis year?
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"[...] Both the geology and the infrastructure around the project make for a very attractive cost structure. We expect to be able to produce at 50% of the current gold price. [...]" Bill Guy, Chairman, Theta Gold Mines Limited
Gazprom: Good business to the east and west
When people talk about a brutal winter in Germany given rising gas prices, the name of the Russian oil giant Gazprom comes up in the second sentence, if not earlier. Germany is still dependent on Russia - and thanks to the Nord Stream 2 pipeline, it will remain so for quite some time. The dispute over the pipeline's completion has been settled. Russia is now trying to smooth the waters in the aftermath and dispel any fears that Germany has become susceptible to blackmail because of Nord Stream 2. Only recently, Russian President Vladimir Putin gave assurances that he would expand gas supplies to Germany if necessary.
Gazprom, which plays a decisive role in the export of gas, is likely to profit in this case. But Gazprom is not dependent on Germany alone. In parallel, it is currently working on a pipeline to the east to sell its energy in China as well. Since Gazprom accounts for 18% of the world's gas production, the Company is perfectly positioned for the current situation. In particular, its business with China, for which it recently commissioned a gas processing plant that also produces helium, has great potential. The share is and remains promising - but the value will not be a multiplier.
Osino Resources: Things can go very fast here
Osino Resources has more potential to become a multiplier. The Company operates in Namibia and is advancing the Twin Hills gold project there. While there are many smaller gold developers in the investment universe that have their appeal but must also be considered highly speculative, Osino Resources offers a more balanced risk-reward profile. That is because the Company is already turning a much bigger wheel compared to many smaller companies. Currently, they are planning a 75,000-meter drill program. In the second quarter of this year, they published a resource estimate of 430,000 ounces (indicated) and 1.47 million ounces of gold (inferred) at grades of around 1.0 g/t. With the new drill program, the resources are expected to increase significantly once again.
The fact that the team around Osino CEO Heye Daun in the Damara belt in Nambia knows precisely what it is doing is also proven by the fact that the team was already responsible for the neighboring Ojikoto mine and sold it to B2Gold for CAD 180 million a few years ago. With Twin-Hills, this feat should succeed again, as Heye Daun confidently presented at the International Investment Forum a few weeks ago. (Click here for the video of the presentation). Since the analysts at Sprott Equity Research are also positive about the stock and are calling out a price target of CAD 2.55, which currently corresponds to more than a doubling, investors should take a closer look at the share given possible upheavals in the market. Gold can play an essential role in a portfolio as inflation protection and crisis insurance.
Deutsche Telekom: Share fails to perform
If you already have gold and oil in your portfolio, you could also add a cash cow. The idea is obvious: Companies that provide people with basic services generate regular income and usually have the pricing power to pass on inflation. One such company is Deutsche Telekom. The Bonn-based Company has long been more than just a German company - it has recently been doing particularly well in the USA. As a result, the Group also raised its forecast for 2021 and now expects an EBITDA of EUR 37.2 billion. This outlook has caused the share price to rise by around 24% on a one-year horizon. Most recently, however, the share price fell, contrary to the market as a whole. The stock is not really picking up speed given rising prices.
There are many beneficiaries of the energy crisis. Shares like Gazprom should continue to benefit from the market environment. However, some of the situations are already priced in, especially for the major companies in the oil sector. While classic cash flow stocks, such as Deutsche Telekom, have not yet benefited from the market environment, smaller gold companies with promising projects and a foreseeable roadmap to sale or production could be an interesting niche. Osino Resources is a gold stock with potential.
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