21. October 2020 | 11:45 CET
Newmont, AngloGold Ashanti, Velocity Minerals - Gold runs bright
Physical gold inventories have increased steadily over the past decades and are currently at their highest levels. Namely because gold, unlike other raw materials, is practically indestructible and is not consumed except in small quantities in medicine or high-tech. As a result, the global amount of gold is continually increasing. The supposedly highest gold reserves are in the USA, where the government claims to have about 8,133 tons or 287 million ounces. Germany has the second-largest amount of gold reserves with 3,417 tons or 120 million ounces, followed by the International Monetary Fund with 3,217 tons (113 million ounces). The gold price has experienced a sharp increase in recent years. After exceeding the USD 1,000.00 per ounce mark for the first time in March 2008, it had already reached just over USD 2,000.00 per ounce by mid-2020. Investors can invest in the precious metal through derivatives, ETCs, mining stocks, or physical gold.
time to read: 3 minutes by André Will-Laudien
"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Author
André Will-Laudien
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Newmont - Golden, solid and broad-based
When mining entrepreneur and financier Colonel William Boyce Thompson decided in 1916 to form a company, he simply named the new entity the Newmont Company, named after his business success in New York and his home state of Montana. This Company was to handle his major private takeovers, including oil and gas and mining interests. The young portfolio included investments in coal, copper, lead, and zinc. Newmont grew steadily through acquisitions and diversification, often through joint ventures with other well-established companies. Today, Newmont's portfolio includes significant operations in North America, South America, Australia, and Africa.
The operational focus is on the continuous improvement of the cost and technical performance structure. Newmont's assets consist of established gold and copper operations, value-enhancing growth projects, and a world-class exploration portfolio spanning five continents. Following the recent merger with Goldcorp, the Company is now the largest gold producer currently with approximately 6 million ounces annual production and has a market value of EUR 43.4 billion, with the most liquid trading venue being the NYSE. Investors will find Newmont to be a solid gold stock with a 1.6% dividend and almost double-digit cash flow returns.
Anglogold Ashanti - Substance giant withdraws from South Africa
Anglogold Ashanti is an independent global gold mining company with a diverse, high-quality portfolio of operations, projects, and exploration activities in nine countries on four continents. While Anglo Ashanti's focus is on gold, the Company also produces silver (Argentina), sulphuric acid (Brazil), and other minerals as by-products due to the excellent availability of deposits. Anglo Ashanti is the third-largest gold producer in the world and also the most strongly represented on the African continent with an annual production of 3.3 million ounces and nearly 35,000 employees (2019).
A geographically diverse shareholder base includes some of the world's largest financial institutions. By investing in gold, the "paper money industry" is placing itself in a natural hedge to its other asset and financing structures. Anglo Ashanti sold its last holdings in South Africa to Harmony Gold for USD 200 million in September. The market capitalization of Anglogold Ashanti shares is currently EUR 9.6 billion, and due to its structure, it also fits perfectly into a fundamentally balanced commodity portfolio. It has now corrected 30% from the top - this offers a good risk/reward ratio.
Velocity Minerals - Bulgaria proves to be a lucky shot
Velocity Minerals Ltd. is a gold exploration Company with a focus on Eastern Europe and Bulgaria. The Company's management combines more than 100 years of experience in the mining industry in Europe, Asia, North and South America. A powerful association!
As a member of the European Union (since 2007), Bulgaria is an attractive destination for investments in raw materials. The country's mining law was adopted in 1999 and updated in 2011. The royalties are low and favourable compared to more established mining states such as Canada, Peru, and Chile. Bulgaria also boasts an attractive corporate tax rate of only 10%, and the country's educational system is excellent, with good availability of experienced professionals. Foreign mining companies have been operating successfully in Bulgaria, despite the favourable operating environment, the total number of established companies is low, and Velocity is still among the first movers.
Velocity has entered into a 70% joint venture interest in the Rozino Gold Project and a further three option agreements with Gorubso Kardzhali A.D., an established and respected mining company in Bulgaria. Gorubso operates the Kardzhali Carbon In Leach plant (CIL 2011) and is the first Company in Bulgaria to be approved for a carbon-in-leach processing plant.
On October 14, 2020, Velocity submitted the independent technical report (according to NI 43-101) in connection with the feasibility study for its Rozino Gold Project. It calculated a resource of 465,000 ounces from 0.50-1.22 g AU/tonne mineralization and corresponding revenues of USD 293 million based on USD 1,500 per ounce of gold. Velocity has a capitalization of CAD 50 million representing approximately 12% of future mine earnings. This valuation is at the lower end of the international scale and currently provides an excellent speculative entry opportunity.
