December 29th, 2022 | 09:32 CET
Infineon, Manuka Resources, Barrick Gold- The acquisition wave is underway
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"[...] I wouldn't be surprised if the project ends up showing more than 5 million ounces. [...]" Gary Cope, President and CEO, Barsele Minerals
Infineon - Further acquisitions likely
The world's leading supplier of semiconductor solutions for power systems and the Internet of Things continues to drive decarbonization and digitalization with its products and solutions and, according to CEO Jochen Hanebeck, intends to continue growing inorganically in the future. As the Group CEO revealed to the "Frankfurter Allgemeine Zeitung", acquisitions for several billion euros could also be considered in the future. However, he limited "that any addition must fit culturally and make financial sense, in addition to the strategic aspect."
Infineon already has a very good position in power semiconductors, "but nothing is so good that it cannot be improved." He said an acquisition is also conceivable in the sensor division, as well as in microcontrollers, connectivity or in software and artificial intelligence. In the meantime, a certain normalization has occurred in the stock market valuation of the semiconductor industry. "It is quite conceivable that, for example, start-ups that are not sufficiently thoroughly financed will want to join a group," he said.
From a chart perspective, the shares of the Neubiberg-based company are in a consolidation phase after an interim high at EUR 33.65 in early December and are trading at EUR 28.37. The 200-day line, currently at EUR 26.83, should provide the necessary support.
Manuka Resources - Unique opportunity
Despite a transformative acquisition and emergence as one of the essential players in the green economy, the share price of the Australian mining and exploration company lost about three-quarters of its value since the beginning of the stock market year, trading at AUD 0.086 on the Australian Stock Exchange ASX. One reason for the latest dip was the announcement of the completion of a placement to institutional investors for AUD 4.1 million. As part of the placement, the Company issued approximately 39 million new shares at AUD 0.105 each. In addition, each participant received a free option for every two placement shares subscribed.
The funds raised are to be used for Manuka Resources' three high-potential projects. With the Mt. Bobby gold project, the Company from Down Under owns one of the historically most prosperous gold mines on the continent, where 500,000 ounces of gold with an average grade of half an ounce per ton of ore were mined in earlier production. In 2020, this was put back into production with a target of producing 24,000 ounces of gold, which was exceeded by a factor of 2. Management believes that the resource has further significant potential at depth. In this regard, management led by CEO Dennis Karp is currently advancing a plan for resource development.
In addition, the Wonawinta Silver Project is one of Australia's largest silver producers, with a mineral resource estimate of 51 million ounces. Currently, the 515,000 t stockpile is being processed, which is located adjacent to the existing processing plant. A resumption of silver production is now being substantially advanced.
In addition, with the fourth quarter acquisition of the South Taranaki Bight (STB) project, Manuka Resources could become an essential part of the green economy in the future. The STB project, located off the west coast of New Zealand, is a VTM iron sands project with vanadium titanium and magnetite. The critical mineral vanadium plays a crucial role in improving energy storage and battery life through the vanadium redox flow battery.
The STB project has a granted mining license and a large JORC resource of 3.8 billion t. With a vanadium grade of 0.5%/t based on initial estimates of annual mining rates for the STB project, the estimated annual production of vanadium would be approximately pounds 55 million. That would make Manuka Resources the third largest vanadium producer after China and Russia, capable of producing 15% of the global supply annually.
As such, the low prices could represent a unique opportunity for disproportionate share price gains over the long term. Manuka Resources' market capitalization is AUD 44.70 million.
Barrick Gold - Rosy prospects
Due to the uncertain political and economic conditions, experts agree that gold should be quoted beyond USD 2.000 per ounce. Nevertheless, the precious yellow metal is still struggling to bottom out and sustainably exceed the USD 1,800 mark. Analysts also consider the silver price to be too low. Thus, Avi Gilburt, the founder of ElliottWaveTrader.net, reckons that gold and silver should prepare for the next upward wave after several years of consolidation. The chartist sees prices for gold well above USD 2,000 per ounce. For silver, he even considers a doubling within the realm of possibility.
For the second largest gold producer in the world, Barrick Gold, the forecast prices would be equivalent to a profit explosion. In order to be prepared for the next upward movement, the Americans are tinkering with optimizing their portfolio. The Company reported that the restructuring of the Reko Diq project in Pakistan could be completed after the Supreme Court of Pakistan issued a positive opinion and the necessary legislation came into force. Reko Diq is one of the largest undeveloped copper-gold projects in the world and is 50% owned by Barrick, 25% owned by three state-owned companies, 15% owned by Balochistan Province on a fully funded basis and 10% owned by Balochistan Province on a freely carried basis. Barrick President and CEO Mark Bristow said the completion of the legal proceedings is "an important step in advancing the development of Reko Diq into a world-class long-life mine that significantly expands the Company's strategically important copper portfolio." First production is scheduled for 2028.
The challenging economic environment of rising interest rates and runaway inflation with skyrocketing commodity and energy costs is making it increasingly difficult for small companies to stand on their own two feet. Thus, acquisition activity is likely to increase significantly in 2023. Manuka Resources and Barrick Gold are ideally positioned, and Infineon will likely announce its first acquisitions soon.
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