Gold Expert Turns Bullish! Is Now the Time to Buy Barrick Mining, Desert Gold, and First Majestic Silver?

Gold Expert Bullish: Buy Barrick Mining Now?

Markus Bußler sees the recent weakness in the gold price primarily as a consequence of shifting rate expectations. In the Moneytrain podcast, he explains that the conflict in the Middle East did not weigh directly on the gold price, but rather via the detour of rising energy prices. The temporary restriction of passage through the Strait of Hormuz drove oil prices up, thereby intensifying inflation concerns. In the markets, this created the expectation that the US Federal Reserve might, instead of rate cuts, even carry out rate hikes again. This shift in sentiment put gold under pressure and temporarily pushed the price below USD 4,000 per troy ounce.

However, the gold expert sees little reason for a sustained series of rate hikes. As an important signal, Bußler points to the bond market. Yields on ten-year US Treasuries have eased again after their May high. This points more to falling inflation expectations and a weaker economic trajectory than to a permanently more restrictive monetary policy. As soon as the market recognizes that no aggressive rate hikes are imminent, gold and other precious metals could turn upward again. In his assessment, one or two rate hikes are likely already largely priced in.

This could make now the right moment to add gold stocks to the portfolio. For many investors, Barrick Mining is a core investment in the sector. The group has a broad portfolio of high-quality mines and benefits directly from a rising gold price. However, its strategic direction is currently raising question marks. Barrick intends to take its North American assets public this year. In addition, there is speculation about possible changes to its activities in Mali. Also on the table is a possible merger of Barrick's African assets with Endeavour Mining. For investors, this raises the central question of which assets will remain within the group over the long term and what future growth will look like. Markus Bußler had already criticized this unclear direction a few weeks ago. By contrast, at Desert Gold investors can speculate on the short-term start of a rally.

Desert Gold: Is the Rally Starting Now?

At Desert Gold, the chances of a short-term rally are good. In GBC Research's view, the gold explorer's stock has plenty of upside potential. The analysts estimate the fair value at CAD 0.93. The stock is currently trading at around CAD 0.11.

Yet the rally could start as early as this month. On the SMSZ project in Mali, gold production is set to begin shortly in the Barani East area. The planned entry via a comparatively small gravity plant looks strategically sensible. Instead of investing large sums in a major project, the company can first gain experience in mining, processing, logistics and cost management. At the same time, production could deliver initial operating cash flows with which further drill programs and resource expansions can be financed more from the company's own strength. GBC analysts assume that Desert Gold could raise throughput to around 1,200 tonnes per day by the end of the year. At estimated production costs of about USD 1,110 per ounce and a conservatively assumed gold price of USD 2,850 per ounce, they see revenues of around USD 33 million and EBITDA of more than USD 20 million for 2027. Measured against that, the current market valuation of around CAD 40 million looks anything but expensive.

Because Barani East is only a first building block within the significantly larger SMSZ project, with the production start, Desert Gold could not only achieve the transition from explorer to potential producer, but also increase the appeal of the entire project. The company is thus working on expanding the resource. The reverse-circulation drill program of around 4,250 m across five prioritized target areas is intended, among other things, to further define the mineralization near Barani East. The extensions along strike as well as higher-grade structures are to be investigated. SMSZ holds a resource of around 1.2 million ounces of gold. Yet management repeatedly points out that the resource is likely to be considerably larger.

In the immediate vicinity are large mines operated by Allied Gold, B2Gold and Barrick Mining. This shows that the area is an excellent gold region. In addition, the neighbours create takeover fantasy. And should SMSZ be sold for a substantial sum, the Desert Gold story would not be over yet.

Indeed, Desert Gold already began to diversify last year. For this, the Tiegba Gold project in Côte d'Ivoire was acquired. In this mining-friendly jurisdiction in West Africa, the project covers around 297 km². It features several kilometre-long geochemical anomalies that have not yet been systematically drilled. Particularly interesting is a large-scale gold-in-soil anomaly with an extent of about 4.2 kilometres in length and 2.1 kilometres in width. Historical samples returned attractive gold values. Desert Gold is likely to explore the area more closely soon.

https://youtu.be/MK7Gjlfn0jg?si=TP5wJJQq2lK5tWGz

First Majestic Silver

And what about silver? For gold's little brother, the hangover after the mega-rally has turned out even greater. After the metal briefly exceeded the USD 120 per troy ounce mark early in the year, the halving followed. The silver price is currently battling the USD 60 mark. It should not be forgotten that, over a one-year horizon, the price is still up more than 50%.

First Majestic Silver is a core investment in the silver sector. Like the metal, the Majestic share has also roughly halved. Operationally, however, the company keeps pushing ahead. Among other things, it is advancing the expansion of the Santa Elena mine in Sonora, Mexico. First Majestic has received the regulatory permits to construct access roads to the high-grade Santo Niño and Navidad areas. For this, the silver group is providing an additional USD 12 million in 2026. The work is scheduled to start in the second half of the year and to lay the groundwork for incorporating both zones into the mine plan in the future.

The ongoing drilling continues to deliver strong results. At Santo Niño, intervals of up to 1,474 g/t silver equivalent were reported, among others, while Navidad reached peak values of 2,128 g/t silver equivalent. Both areas already show considerable extents and are to be converted from the "Inferred" category into higher-quality resources through further infill drilling.

Together, Santo Niño and Navidad contain an estimated 10.5 million tonnes of inferred resources with 90.7 million ounces of silver equivalent. The new underground accesses could enable First Majestic to process higher-grade ore in the future, rather than material from weaker parts of the deposit. Santo Niño could deliver its first production contributions from 2027. Santa Elena is thus increasingly developing from a purely exploration focus into an important growth driver within the First Majestic portfolio.

Precious metals are currently not in investors' focus. Yet it is precisely in such phases that opportunities arise for investors. If Markus Bußler is proven right, gold and silver prices should soon head higher again. Desert Gold has several drivers at once for outperformance. The rally could start as early as July. Among the major gold producers, Barrick is not a compelling pick at present. Its strategy appears unclear. In silver, First Majestic remains a core investment.