Close menu




February 11th, 2022 | 11:24 CET

K+S, Tembo Gold, Barrick Gold - Huge opportunity with the right timing

  • Gold
Photo credits: pixabay.com

On February 10, market participants waited with bated breath for the inflation figures from the USA. At 6%, inflation was higher than expected. After the US stock market has also risen significantly in the past year, whereas gold hardly moved upwards, it gave little reason to invest one's money in the precious yellow metal. If interest rates rise and stock prices fall, there will be a shift in assets towards gold. The last time we saw this was at the start of the Corona Pandemic when gold hit new highs. With the right timing, high profits beckon.

time to read: 4 minutes | Author: Armin Schulz
ISIN: K+S AG NA O.N. | DE000KSAG888 , TEMBO GOLD CORP. | CA87974N4057 , BARRICK GOLD CORP. | CA0679011084

Table of contents:


    Brodie Sutherland, CEO, Tocvan Ventures
    "[...] 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

    Full interview

     

    K+S - Forecast raised again

    K+S proved last year what is possible with good timing. The potash price was still low at the beginning of the year, the Group was highly indebted, and there was little prospect of a good year in 2021. The share was quoted at EUR 9 at the beginning of February, ranging between EUR 8.00 and EUR 10.40. This range was broken upwards at the beginning of May. Anyone keeping an eye on the potash price could have guessed this development. In July, the 10-year high was broken, and there was no stopping the price in Brazil. At that time, the K+S share stood at about EUR 12.

    Today, one is paying EUR 19.78 for a share because the prospects for the Company have improved abruptly. Debt has been drastically reduced, and revenues from the potash business continue to bubble up. Preliminary figures for 2021 were released on February 4. EBITDA is around EUR 960 million, EUR 130 million above the Company's expectations. The exact data will be available on March 10. On February 9, the Company raised its forecast for the current year. EBITDA is expected to be between EUR 1.6 billion and EUR 1.9 billion, which could almost double.

    Thanks to the high prices achieved in the agricultural segment, the Company can absorb cost increases for energy, logistics and materials. The stockpile expansion at the Hattorf site can now also begin. The legal dispute with the Hesse branch of Friends of the Earth Germany (BUND) has been settled out of court. So only positive news for investors. Interested investors should nevertheless wait for a setback before entering.

    Tembo Gold - Drilling program in the starting blocks

    The Canadian gold explorer Tembo Gold was the talk of the town back in March 2012. The share price peaked at CAD 6.87. The prospect area in Tanzania covers 174 sq km and already at that time could boast impressive gold discoveries with up to 79.1 g/t gold. The perfect location, but unfortunately, bad timing. The government changed and was not sympathetic to mining. So the project was dormant for several years until a new government opened up new mining opportunities again. Since then, large sums have been invested in the East African country.

    In total, the Company owns 4 projects whose boundaries are directly adjacent to Barrick Gold's large Bulyanhulu gold mine. Then in December, Barrick Gold grabbed Tembo and paid USD 6 million, receiving 6 mining rights and about 5.5 million shares at 0.27 Canadian dollars (CAD) in return, securing a 5.5% stake. Recently, the Company announced that the transaction is expected to close in the first quarter of 2022. On February 8, the new drilling program was announced. First, a suitable drilling contractor was selected to share Tembo's exploration camp, renovated in mid-February. A total of 7,000m of diamond drilling and 5,000m of RC drilling will be drilled at the Ngula 1 project, and drill targets have been identified using Artificial Intelligence from Goldspot Technologies.

    So everything is in place. As soon as the final approval of the authorities is received, we will start full steam ahead again. The first drill results are eagerly awaited. Since reactivation, the share price has risen from CAD 0.135 to CAD 0.355. Subsequently, consolidation set in and pushed the share down to CAD 0.23. At the moment, one share can be purchased for CAD 0.255 and thus gets a better entry price than Barrick Gold. If the exploration work continues to be positive, Barrick will undoubtedly want more of the pie.

    Barrick Gold - Resources increased

    Barrick Gold is one of the largest gold producers in the world. In addition to gold, copper is also mined here, which promises a lot of potential for the future. The Company's geographic diversification gives it a crisis-proof position. Business has been good for some time, but the share price has not really taken off. Investors have long hoped for a major acquisition. The Company's cash holdings would allow for that, but the Company is empty-handed despite a couple of significant acquisitions.

    Preliminary production numbers for the fourth quarter show just how well Barrick is doing. For the third year in a row, the Company met its full-year forecasts despite difficulties with Corona. A total of 4.44 million ounces of gold and 415 million pounds of copper were produced in 2021. Production costs were reduced by 3-5%. Tanzania mines are producing more than 500,000 ounces of gold, showing how valuable the production site has become. As a result, they are moving up to Tier 1 assets in Barrick's portfolio.

    On February 10, the Company announced that the depletion of gold mineral reserves had been replaced by 150%. Probable mineral reserves are now 69 million ounces, up from 68 million ounces a year earlier. So things are looking good for the future. The stock is currently trading at USD 19.73 and continues to move sideways. Those who want to bet on a rising gold price are well served with Barrick Gold in the long term, especially since the Group is fundamentally much cheaper than its competitor Newmont.


    Trading depends on the right timing. Inflation is rising more than expected by the experts, and the pressure to raise interest rates is increasing. Thus, stocks fall, and investors have more pressure to protect their money from inflation. Gold is an alternative. Barrick Gold is earning splendidly even at the current gold price. After years, Tembo Gold has been reactivated and already has a strategic partner on board with Barrick. K+S has shown what is possible with the right timing. 2022 could be the year of gold.


    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.

    Risk notice

    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.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    Armin Schulz

    Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.

    About the author



    Related comments:

    Commented by André Will-Laudien on January 31st, 2023 | 14:50 CET

    E-mobility 2023: The Tesla hunters are coming! BYD, Lucid Motors, Tocvan Ventures. Will the Varta share now also fly?

    • Mining
    • Gold
    • Electromobility
    • Investments

    It Is hard to believe! The Tesla share is once again making a name for itself. Analysts went into the presentation of the annual figures with cautious expectations because there were many negative rumors surrounding Elon Musk's electronics company: Fewer sales? Cars on stockpile? Again, it came as no one had expected it. Elon Musk delivered and simultaneously mocked all the shorties who wanted to push his stock below USD 100 at the turn of the year. This gambit went badly wrong because Tesla was able to deliver even better figures than expected, and there was no stopping the share. With plus 70% in only 4 weeks, the Tesla share belongs to the shooting stars since the turn of the year - the short sellers must have lost their desire completely. But the variety of interesting shares is significant. Where are the opportunities for e-investors lurking?

    Read

    Commented by Nico Popp on January 26th, 2023 | 20:07 CET

    Gold and war - rethink now! Barrick Gold, Globex Mining, Rheinmetall

    • Mining
    • Gold
    • Commodities
    • armaments
    • Growth

    Gold is shining again. The weaker dollar and the existing geopolitical risks are boosting the precious metal. But how should investors invest? What opportunities are there off the beaten track? And: Given the crises, does gold have to be in the portfolio? We highlight three hot stocks and provide insights and outlooks on the gold price and the overall geopolitical situation.

    Read

    Commented by Stefan Feulner on January 26th, 2023 | 20:00 CET

    Nordex, Manuka Resources, American Lithium - The profiteers of scarcity

    • Mining
    • Gold
    • Lithium
    • Commodities

    Besides the raging war in Ukraine, the discussion about the energy industry of the future accompanies us daily. It has already been decided that renewable energies such as wind power and photovoltaics will be the way forward. Likewise, the move away from the internal combustion engine to battery-powered electric motors is in the bag. But the implementation problems will be with us over the next few years. Where will producers get the raw materials that are already in short supply? Another critical issue is energy storage. Here, too, there is an increasing demand for a raw material that is currently produced primarily in Russia and China.

    Read