Nel ASA, Alerio Gold, Siemens - Difficult times

Golden prospects in South America

An interesting opportunity currently presents itself in Guyana. The state in the north of South America on the Atlantic coast borders Brazil to the south and west, Venezuela to the northwest and Suriname to the east. Covered by dense rainforest and with a passion for cricket and calypso music, the English-speaking country has close cultural ties to the Caribbean. In addition, the area has a wealth of mineral resources. The country has one of the world's largest deposits of bauxite, its most important export product. Moreover, besides diamonds, there is also a high mineralization of gold. In the past, gold exports accounted for more than 30% of total export volume.

The geological structures are similar to those of the West African continent, which is why global industry giants such as Newmont, Reunion, Troy, Omai Gold and G2 Goldfields have set up their tents in Guyana. Junior mining company Alerio Gold has thrown its hat into the ring with two promising projects. The Tassawini gold project, where Alerio Gold holds a 100% option to buy, has a historical resource estimate of 499,000 ounces. Already EUR 23.91 million has been spent on exploration by management, which brings decades of experience in the Guiana Shield. Mineralization at this project is open in several directions, so the area has already been expanded to 1381 hectares.

Mining licenses are already in place, and the current year will see a significant expansion of the exploration program. In addition to obtaining an environmental impact statement, Alerio Gold plans to publish a PEA study, a preliminary economic analysis. In order to fund this, the first tranche of a private placement was recently completed. The Company issued 2,841,000 units at a price of CAD 0.25 for total gross proceeds of CAD 710,250.00. The Company's market value, also listed in Frankfurt, currently stands at EUR 10.97 million.

Nel ASA - Critical conditions

The crash of the Norwegian hydrogen specialist continues. After the break of the broad support at EUR 1.40, the low from October of last year at EUR 1.20 calls as the next target. With a market capitalization of EUR 1.76, the market leader is also still valued with great advance praise for the future. Accordingly, sales for 2021 amount to a manageable EUR 79.9 million, reflecting a high price-to-sales ratio of around 26.

In a recent report researchanalyst.com/en/report/nel-asa-share-does-the-hydrogen-pioneer-keep-its-promise, the author believes that "Nel ASA could be somewhat detached from the industry trend, but as a successful standard stock and sector leader, the outperformance to the peer group should be maintained - in good times as well as in bad. However, in a rising interest rate environment, the normalization of valuation parameters across the sector could take some time."

Sale flushes money into the coffers

Siemens is selling its subsidiary Yunex to Italy's Atlantia Group. The DAX-listed group said Monday that the infrastructure holding company, controlled by the Benetton family of entrepreneurs, will pay EUR 950 million. The reason given was that the subsidiary, with its products ranging from traffic lights to traffic control systems and toll systems, did not fit into the core business of the rail technology division Siemens Mobility. Last year's sales were around EUR 600 million.

However, analysts were positive. The major Swiss bank Credit Suisse continues to rate the Munich-based Company as a buy with a price target of EUR 180.00. The Canadian bank RBC also left its rating for Siemens at "Outperform" with a price target of EUR 170.00.

The stock markets are in a correction, and there is global uncertainty due to the about-face of the central banks due to possible interest rate hikes. The high inflation should result in the comeback of the gold sector. Alerio Gold owns two promising projects in this context. Analysts see Siemens positively, while a further crash threatens Nel ASA.