April 18th, 2023 | 08:30 CEST
Lagging behind and full of opportunities - ThyssenKrupp, Desert Gold, Deutsche Bank
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"[...] 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.
ThyssenKrupp with leverage
A few years ago, the steel group ThyssenKrupp AG founded its own hydrogen division to push the decarbonization of the economy. The subsidiary ThyssenKrupp Nucera plays a decisive role in this and is to produce green hydrogen by means of water electrolysis and exclusively renewable energies. This hydrogen is then to be used in the steel industry's furnaces and blast furnaces, and the surplus hydrogen is to be sold to other industries. This will save large amounts of CO2 emissions, and hydrogen can also be further processed as a basic raw material for the production of ammonia and methanol and as fuel and fertilizer.
Although ThyssenKrupp has not yet given a precise timetable for the IPO of its subsidiary, the Company is expected to be valued at around EUR 3 to 4 billion. With a 66% stake in Nucera, a complete sale of the shares would mean special proceeds of EUR 2 to 2.6 billion. This could lead to ThyssenKrupp realizing valuation reserves and further increasing the Company's market capitalization. ThyssenKrupp is currently valued at EUR 4.46 billion on the stock exchange.
ThyssenKrupp is currently trading at EUR 7.31. If the high for the year to date at EUR 7.49 is overcome, the way would be clear, at least to the next resistance level at EUR 9.21.
Desert Gold - Good development, weak prices
It is more the rule than the exception that the prices of smaller exploration companies ignore the first climbs at the beginning of a long-term trend in the precious metals sector. However, if this trend is confirmed, they usually outperform the underlying price and larger gold producers with significant leverage. The example of Desert Gold clearly shows this phenomenon. While the gold price has put in a performance of 13% since the beginning of March and regained the psychologically important mark of USD 2,000 per ounce, the performance of the Canadians is at a black zero. However, the developments for the future are more than promising.
With the SMSZ project in Mali, Desert Gold owns one of the largest non-producing land areas in West Africa, with 440 sq km. Several producing mines are located in the neighbourhood, including those of Barrick Gold, Allied Gold, Endeavour Mining, and B2Gold. The SMSZ property hosts Measured and Indicated Mineral Resources totalling approximately 1.1 million ounces. A total of more than 23 gold zones have been discovered in the area to date, which will be developed and analyzed for economic grades.
To date, Desert Gold has completed 45 drill holes covering over 2,067m on priority soil and structural targets in the vicinity of the Mogoyafara South and Gourbassi West North gold deposits. Exploration has now commenced on a new 400m long and 50 to 75m wide zone approximately 500m south of the Mogoyafara South gold deposit (estimated probable mineral resource of 412,800 ounces of gold grading 1.05 g/t gold). Previous samples returned a gold grade of 1.55 g/t.
Desert Gold CEO Jared Scharf says: "I am always pleasantly surprised when new artisanal mining sites appear on our SMSZ concession area. This new activity reinforces our belief that we will discover new gold zones on our permit with further work. I am also pleased to report that we have been able to complete more drill holes than planned and are still under budget. We look forward to releasing these results as soon as possible."
The Company's leader will face the wider investor community next week at "Mines and Money Connect" in London. He will also present Desert Gold at the virtual IIF - International Investment Forum on May 10th.
Deutsche Bank - Is the worst over?
The past months have been challenging for the banking and financial services industry. In addition to the bankruptcy of Silicon Valley Bank, turbulence surrounding the former major Swiss bank Credit Suisse, which has now slipped under the umbrella of UBS, was the leading cause of high share price losses. Deutsche Bank was also unable to escape the downward spiral, with share price losses peaking at 35% to a low for the year of EUR 7.95. Since the end of March, concerns about an escalating banking crisis have calmed, and the share price has recovered significantly to EUR 9.90. The next target would be to close the price gap at EUR 11.47.
Better-than-expected first-quarter results from the US could provide a tailwind for the entire banking sector. The first to do so was JP Morgan, which benefited from the Federal Reserve's interest rate hikes and was thus able to increase its net profit by 52% to USD 12.6 billion in the first quarter. Net interest income grew by 49% to USD 20.8 billion compared to the same quarter of the previous year. However, due to the uncertainties on the economic side, JP Morgan had to increase risk provisions by a whopping 56% to USD 2.3 billion.
ThyssenKrupp has potential with the planned IPO of its subsidiary. Positive quarterly figures from US banks could further boost Deutsche Bank's share price. The positive development in the business process is not yet reflected in Desert Gold's share price.
Conflict of interest
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