February 3rd, 2022 | 12:30 CET
NEL, Tembo Gold, Newmont: Comeback shares or save yourself?
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"[...] I wouldn't be surprised if the project ends up showing more than 5 million ounces. [...]" Gary Cope, President and CEO, Barsele Minerals
NEL: All over and done with?
The NEL share was one of the celebrated stars on the stock exchange floor. Just a year ago, the stock was soaring from one high to the next, making the hearts of private investors beat faster. And today? The share is only a shadow of its former self. A few weeks ago, NEL slipped below the support zone at EUR 1.30, which is important from a charting perspective. The subsequent sell-off took the value down to EUR 1.11. Since then, NEL has been on the rise again. But can the roughly 11% of the past five trading days be more than just a countermovement in the downtrend?
NEL is well positioned around the production, storage and transport of hydrogen. Although the hydrogen train seems to have sailed for passenger cars, the energy carrier could be of great importance for many other applications, such as ships or trucks. After all, hydrogen can also be produced with renewable energy and thus meets all the requirements of the times. But what about companies themselves? The research portal researchanalyst.com took a closer look at the value a few weeks ago. The conclusion: "The near future will have to show whether Nel ASA can meet the existing demand on the market with its commercial approaches. Refinancing via the stock exchange is likely possible at any time in a positive market environment, so the Company can continue to grow unhindered. One of the decisive factors for long-term success is the global, political course set in favor of a hydrogen technology subsidy similar to the measures already active in e-mobility." NEL is expensive and far from turning a profit. Comeback chance: relatively low.
Tembo Gold: Investors should be aware of this unique situation
Tembo Gold's stock has lost double digits over the past three months, so it may be considered a fallen angel in the eyes of some investors. However, if one looks at the value over the long term, only an upward trend can be observed. The question remains whether Tembo can regain momentum within this uptrend. Tembo operates the Tembo Gold Project in Tanzania. Last fall, the Company started exploration and announced a 7,000-meter drill program. Shortly thereafter, the next bang for the buck: mining giant Barrick bought six licenses from Tembo, which the small Canadian Company had secured near Barrick's Bulyanhulu project. Furthermore, the subsidiary of Barrick participated in a capital measure of Tembo and guaranteed further payments in the event that work on the acquired license areas is successful.
The deal has several advantages for investors: On the one hand, Tembo Gold has succeeded in flushing capital into its coffers. This circumstance cannot be valued highly enough in a market phase where gold is not at the top of many investors' shopping lists. In addition, Tembo can now fully focus on the work in its core area and has gained a potent anchor shareholder. In the long term, a takeover of Tembo by Barrick is not excluded. Tembo's stock remains promising and could be a good opportunity given the lower valuation: Comeback chance: Increased.
Newmont: Positive signals from the gold heavyweight
The shares of Newmont, the largest gold miner, have also recently fallen back slightly. But if one looks at the long-term chart, you can already see a sideways movement since mid-2020. The value scratched the lows at the end of 2021. However, the gold multinational, which also has copper in its portfolio, is increasing again. At the end of February, Newmont will publish figures that should provide further insight into the Company's prospects. Given the further increase in commodity prices and the stabilization of the gold market, there is certainly comeback potential for Barrick. However, the stock will no longer be a high-flyer.
While the hydrogen market is still down, the development of gold companies certainly gives hope. The situation in the industry seems to be more promising than the gold price has suggested in the past weeks. In particular, small stocks like Tembo, which are attracting attention due to the special situation around new shareholder Barrick, could benefit disproportionately in case of a gold comeback.
Conflict of interest
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