January 3rd, 2023 | 08:30 CET
Growing optimism at Deutsche Bank, Alerio Gold and Sartorius
Table of contents:
"[...] One focus will be on deposits near the surface. These would be good arguments for a quick production decision using the low-cost heap leaching method. [...]" Brodie Sutherland, CEO, Tocvan Ventures
Deutsche Bank - Still room for improvement
Despite the rather negative news, the share of Germany's largest bank in terms of total assets and number of employees continues to boom. Since the lows of early October, the performance amounts to a handsome 50% to now EUR 10.95. There is still room for improvement. The next short-term resistance zone is at EUR 11.51. If this is overcome, there is a good chance that the share price will rise again. Should this be overcome, price targets in the range of EUR 12.15 are already waiting. On the downside, the price should not fall below the upward trend since October at EUR 10.13. The analysts of the Canadian bank RBC raised the price target for Deutsche Bank from EUR 14 to EUR 15 in their latest study. The investment rating was left at "outperform".
Hardly surprising, on the other hand, was the ECB's call for a higher capital buffer, i.e. backing businesses with more equity. According to Deutsche Bank, capital requirements will rise by 20 basis points to 2.70% under the ECB's supervisory review and evaluation process (SREP). "The increase is due to the ECB's newly introduced separate assessment of risks from so-called leveraged finance transactions," the Company statement said. Stricter requirements from the ECB's banking supervisors for private equity financing had already become apparent in their statements from recent months. The supervisors' requirements for Common Equity Tier 1 (CET1) capital are at least 10.55% after the latest review - up from 10.43% as of September 2022. Deutsche Bank is unlikely to need to readjust here: As of the end of September, it had reported 13.33% for the Common Equity Tier 1 ratio.
Alerio Gold - Significant resource expansion planned
In contrast to the crisis-ridden stock market, the gold price remained almost unchanged year-on-year despite a high fluctuation range. Nevertheless, many experts see prices in the new stock market year beyond the previous all-time high of USD 2,074.70 per troy ounce due to uncertainties in the financial system and the continued high inflation. Smaller exploration companies, which perform like a lever both upwards and downwards, would benefit particularly from a sustained rise in the price of gold.
Guyana offers an extremely attractive investment opportunity. The state in the north of South America has a wealth of mineral resources such as bauxite, diamonds and gold. In the past, gold exports accounted for about 35% of the total export volume. The geological structures are similar to those of the West African continent, which is why global industry giants such as Reunion Gold, Troy, Omai Gold and G2 Goldfields have pitched their tents in Guyana.
A prominent player in the future could be Alerio Gold, which has three 100% owned properties. The Tassawini Gold Project clearly stands out. Here, CAD 34 million has already been spent in the past on constructing a camp, a runway and a jetty and investing in 47,509m of drilling in 1,279 holes. In addition, all necessary mining licenses have already been obtained for the approximately 499,000 ounces of gold, indicated and inferred, according to a 2010 resource study conducted by SRK. At this project, mineralization is open in several directions, which is why the area has already been expanded to 1,381 hectares.
Alerio Gold's new CEO, Allan Fabbro, is advancing fieldwork following the successful topographic survey that located several additional high-grade targets on the property. Remote sensing work conducted by Auracle Geospatial Science Inc. focused on locating and identifying subsurface features within the Tassawini project, as well as completing an updated topographic surface with the creation of a new digital elevation model (DEM). The DEM is an important component for the anticipated updated mineral resource estimate and for future exploration and drilling programs.
With a market capitalization of only CAD 5.13 million, the Company should have the potential to be an outperformer candidate if gold prices continue to rise on a sustained basis, based on the work already completed on the Tassawini project.
Sartorius - Further inorganic growth
Post-Corona is not only hitting vaccine manufacturers with all its force, but the laboratory and diagnostics sector has also been moving in a sharp correction since the highs at the beginning of 2022. Shares in DAX-listed Sartorius, for example, lost more than 40% in value YOY. Investors also acknowledged CEO Joachim Kreuzburg's announcement of further acquisitions with losses of more than 5%.
As he told the Deutsche Presse-Agentur, the strategy of making an average of two acquisitions per year is to be continued in order to gain further expertise. "After all, we are not buying big companies to buy market share, but we are aiming to add technologies that broaden our offering and make us even more relevant to our customers."
Kreuzburg revealed in another interview with dpa that Sartorius aims to reach the EUR 5 billion sales threshold in 2025. In contrast, he said that the lack of qualified workers is a concern that could limit future growth. He said that automation is therefore an essential factor in value creation. There is no reason to invest in Sartorius shares at the moment. Thus, the upward trend, currently at EUR 334.30, is expected to become important on the downside. Should this be breached, a further sell-off threatens.
Despite the rather negative news, the Deutsche Bank share still has significant upside potential, according to RBC. In contrast, the chart situation for Sartorius AG is tense. In the event of a comeback of the gold price, Alerio Gold is optimally positioned with three projects.
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.
Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.
The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.