October 22nd, 2021 | 13:23 CEST
Infineon, Sierra Grande Minerals, Xiaomi - New attack
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"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Sierra Grande Minerals - At the beginning of the curve
In addition to the growing national debt, the inflation rate has also been climbing since the easing of the Corona pandemic. Inflation in Germany was plus 4.1% in September. That represents the highest monthly year-on-year increase in consumer prices in 28 years. The high price increase is a temporary effect, according to central bankers, who are therefore insisting on the ultra-loose monetary policy with low interest rates and further unlimited bond purchases. A quick tapering, i.e. a scaling back of the purchase programs or even quick, appropriate interest rate increases, would not be possible under the above-mentioned debt issues without causing the financial system to totter and plunging the states into bankruptcy.
Therefore, although the price has not yet completed its consolidation wave in the overriding upward trend, gold remains without alternative protection against inflation. An investment in gold mining stocks should pay off in the long run. At the moment, the price is again fighting for the 1,780 point mark. A test of the low for the year in the direction of USD 1,680 per ounce is possible but should be seen anticyclically as buying opportunities.
The situation is interesting with the junior exploration Company Sierra Grande Minerals, which has set its focus on deposits along the Walker Lane trend, historically known as high grade, in the prime mining region of Nevada. With four projects, Glitra, Sat, B&C Springs-Mildred and Betty East, covering a combined 1207 ha, it found its place alongside high-grade mines from majors such as Barrick Gold, Kinross, SSR, Hecla and Coeur. A total of 1,805 soil geochemical samples were collected from the four concession areas. The objective of the recently completed work was to conduct a complete soil geochemical sampling with extensive area sampling.
Recently, positive results have been received from Sierra Grande Minerals regarding the B&C Springs-Mildred project located in the southern Paradise Range in the Fairplay Mining District, not far east of the Paradise Peak open-pit gold mine. The results of the soil geochemical programs reconfirm the existence of mineralized structures on the Canadian properties. The potential for an intrusion-related system along the B&C Springs trend appears high. In the coming months, gold-bearing zones in the area of the Mildred Mine will now be investigated. In addition, management is considering expanding the claim holdings to the west.
Sierra Grande Minerals is still in the early stages of exploration work. Looking at the Lassonde curve, Sierra Grande Minerals has the opportunity for disproportionate share price increases if the results continue to be positive, of course with increased risk. The capitalization of the Canadian Company is currently just EUR 4.80 million.
Xiaomi - Attack on the EV market
By contrast, the technology group Xiaomi has established itself in the market. In terms of smartphone sales, it even managed to knock US giant Apple and top dog Samsung off their thrones in the second quarter with 12.7 million units. Within a year, the Chinese Company was able to increase its sales in Europe by 67.1%. Now Xiaomi wants more. In addition to cooperating with Trade Desk, a leading digital advertising provider, the ambitious management intends to conquer the EV market.
As early as the first half of 2024, the first battery-powered Xiaomi automobile is expected to roll off the assembly lines, and then mass production will begin, the Company announced via Twitter. A new model is then to follow annually. Xiaomi made a public commitment in March to invest USD 10 billion in a new electric car division over the next 10 years.
The innovative Company's share price was able to form a double bottom in the area of EUR 2.40 after a long downward slide and has a rebound opportunity at the current level of initially around EUR 3.20.
Infineon - Shortly before breakout
From a chart perspective, the DAX Company Infineon is currently facing a decision. A new 15-year high on a breakout above the EUR 38.20 mark could give the Munich-based share price wings once again. Fundamentally, everything is going like clockwork at the moment, and analysts are enthusiastic.
The major Swiss bank UBS has left its rating for Infineon at "Buy". No significant impulses are foreseeable for the third quarter in the semiconductor sector, wrote analyst Francois-Xavier Bouvignies. Infineon remains one of the favorites given demand from the auto sector, he added. Goldman Sachs, Credit Suisse and Deutsche Bank also see Infineon as an outperformer.
The mountain of government debt is growing, and the central banks' hands are tied despite rising inflation rates. By investing in gold mining stocks, investors can protect themselves from demonetization. The junior gold Company Sierra Grande Minerals is still in its infancy and has significant growth potential with non-negligible risk. Xiaomi and Infineon are Buy candidates.
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