March 24th, 2022 | 10:58 CET
Nel and Bayer shares in demand - when will Barsele Minerals explode?
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"[...] 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
Barsele Minerals a takeover candidate?
The Canadian exploration company Barsele Minerals is currently focusing on a project in Sweden. Compared to competition in Eastern Europe, Africa and Asia, this significantly reduces political risks. The Barsele Gold project is located 600km north of Stockholm. Several large gold deposits are located nearby, including Bjorkdal (Elgin Mining), Faboliden (Dragon Mining) and Svartliden (Dragon Mining). In recent years, 404 drill holes have been drilled at the Barsele project with a total length of 155,000m. The 2019 NI 43-101 compliant resource estimate indicated approximately 2.5 million ounces of gold. Currently, work is underway to expand this. The next milestone is to increase the resource estimate to 3.5 million ounces of gold.
Barsele has a strong partner at its side in the development of the project. Barsele holds 45% of the project. The senior partner with 55% is Agnico Eagle. The billion-dollar company is leading exploration on the property. An attempt by Barsele to take over the 55% failed a few months ago. But it remains exciting; perhaps Barsele itself becomes a takeover candidate because the valuation is low. The Royal Bank of Canada already valued the Barsele project at USD 375 million a few years ago. Barsele's market capitalization is around USD 50 million. The share is also traded on German stock exchanges. Important for the valuation: The basis for the valuation at that time was a gold price of USD 1,350. Today, the troy ounce is solidly quoted between USD 1,900 and 2,000. Barsele shares should therefore have room for improvement.
Bayer shares with up to 50% price potential
According to analysts, the Bayer share also has room for improvement. The stock of the DAX company has already performed well in recent weeks and is currently trading at just under EUR 60. UBS has a target price of EUR 90 and sees a potential of 50%. Accordingly, the analysts recommend Bayer's stock as a buy. Due to the glyphosate legal dispute, the stock has long been decoupled from the fundamental value. However, it is now time for this risk discount to be removed. The development in the agricultural division continues to be very dynamic. Important news is expected in April. Then it should become more clear how the Group is coping with the expiration of the patent for the anticoagulant Xarelto. Deutsche Bank also sees a share price potential of over 20%. Bayer has achieved an attractive price in the sale of the "Environmental Science Professional" business around professional pest control. Therefore, the analysts confirmed their buy recommendation with a target price of EUR 75.
Nel: Minister for Economic Affairs Habeck again creates share price fantasy
One can certainly not speak of a valuation discount for Nel. Instead, the share is driven by a lot of fantasy. Because when it comes to hydrogen, investors can hardly ignore the Norwegian Company. And hydrogen is becoming more than ever the central building block of the energy transition - especially in Germany. Economics Minister Habeck emphasized this once again during his visit to the Arabian Peninsula. Against the backdrop of the Russian attack on Ukraine, the development of a hydrogen economy could happen much faster than previously planned, Habeck said. According to his ideas, green hydrogen, produced without CO2 emissions based on renewable energies, should enable decarbonization in the steel and chemical industries, for example. Germany should then be able to do without fossil energies in the long term. Nel should benefit from the massive investment in hydrogen technology and has taken at least one small step with its latest order. The Company is to supply modules for a planned hydrogen station in Le Bourget, France. The customer is HysetCo, which operates hydrogen taxis in the Paris region. According to the Company, it operates the largest hydrogen taxi fleet globally. Nel manager Martin Pfandl said, "We are pleased to have been selected by HysetCo as a hydrogen refueling station equipment supplier. We look forward to supporting HysetCo in developing hydrogen mobility infrastructure in France."
Bayer and Nel are clearly in a short-term uptrend. That said, Nel is no bargain and has yet to grow into its billion-dollar valuation. The opposite is true for Barsele Minerals. The explorer is developing an exciting gold project with a strong partner and is anything but highly valued.
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