13. July 2021 | 10:42 CET
JinkoSolar, Barsele Minerals, Newmont: The takeover merry-go-round is spinning
Raw materials are the key to new technology. Whether silver, copper or other metals - many technologies, such as electric cars and solar panels, drive demand for metals. As these technologies triumph, so does the demand for raw materials. Using three stocks as examples, we explain how investors can profit.
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ISIN: JINKOSOLAR ADR/4 DL-00002 | US47759T1007 , BARSELE MINERALS | CA0688921083 , NEWMONT CORP. DL 1_60 | US6516391066
"[...] Our SMSZ project is the largest contiguous land package of any exploration company in the region at 400km2 and overlays a 38km portion of the prolific Senegal Mali Shear Zone. [...]" Jared Scharf, CEO, Desert Gold Ventures Inc.
JinkoSolar: Where will it go from here?
The JinkoSolar share is a real hot potato - in a positive sense! In the past three months alone, the stock has climbed by an impressive 47%. The reason is the great demand for solar modules and the good products of JinkoSolar. The Company scores high on both durability and efficiency. Both are points that are important to potential buyers of solar modules. The third factor is price. Here, too, the world market leader JinkoSolar is perfectly positioned. We remember the price war around solar modules about ten years ago. At that time, more and more German companies slid into bankruptcy. The reason: The Chinese were simply cheaper. At the end of this price war and the concentration of suppliers in Asia, JinkoSolar is the winner.
With demand for solar panels continuing to grow, the Company is perfectly positioned. Despite the recent price gains, the stock still has some room to run. From EUR 55, however, the value could increasingly encounter resistance. Whether JinkoSolar will reach the EUR 74.10 mark from last year again so quickly is questionable. The Company is well-positioned, but the stock is also known for its volatility.
Barsele Minerals: A plan - 18 months to go
Barsele Minerals is another volatile stock. The Company partnered with mining giant Agnico Eagle to develop the Barsele project in Sweden. Barsele holds 45% of the project and Agnico Eagle 55%. A letter of intent now allows the young Company from Canada to take over the entire project. Barsele would have to raise CAD 45 million, and Agnico would have to sign over a 14.9% stake in its shares. In addition, there would be options to buy a further 6 million shares at CAD 1.25 per share. Agnico Eagle believes in the project's success and is convinced that it is better off with Barsele Minerals. The young Company plans to drill 30,000 meters over the next 18 months and upgrade the project to make it easy for Barsele to finance the complete takeover.
The Barsele project represents promising gold deposits within an attractive infrastructure in northern Sweden. Sweden itself is a sought-after mining location and shines with corporate taxes of only 22%. In addition, the high environmental standards of the country meet the desire of many investors for sustainably mined raw materials. Since Agnico Eagle has entered into a letter of intent, which provides for a large part of the payment for the project in shares of Barsele Minerals, investors can take this as a sign of confidence. Currently, the stock is trading at CAD 0.75. There is still a lot of air until the exercise price of the options to be granted to Agnico Eagle with a strike price at CAD 1.25. Key data around Barsele looks promising. Investors should have the value on their radar.
Newmont: Is Europe becoming attractive for the giant?
Investors always have the Newmont share on their radar. The world's largest mining group generates around three-quarters of its sales with gold. In addition, there is a lucrative copper business. Newmont has benefited from rising commodity prices in recent quarters. Although the dividend yield is only around 2% and the share price potential is also limited for a big ship like Newmont, the share can be a solid addition to a portfolio for cautious investors. Since the Company has also been working on its costs recently, Newmont should be able to ride out fluctuations in the commodities market.
Since companies like Newmont always have to replace their mined raw materials, the Company could even play a role in the constellation between Barsele Minerals and Agnico Eagle. Currently, the giant is not yet represented in Europe. As a promising project in a sought-after mining destination, Barsele Minerals could attract the interest of other majors. JinkoSolar, on the other hand, is not a takeover candidate. First, the Company itself is well-positioned, and second, it is already expensive. It is more likely that JinkoSolar will use its shares as a takeover currency.