29. April 2021 | 19:10 CET
Newmont Gold, Sibanye-Stillwater, Troilus Gold, NEL - Invest selectively in quality!
After such an extended bull market as we have experienced in the last 3 years, it is difficult for some investors to separate the wheat from the chaff. There are long-term fundamental trends, so-called megatrends such as digitalization or e-mobility, and currently also mining. Here, the medium-term parameters coincide with critical economic trends. But then there are also short-term, so-called hyped trends about which it can be argued how long they will last. While crypto attracts additional money, the hydrogen hype is already breaking off - and again, an important criterion comes to light: Timing!
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ISIN: US6516391066 , ZAE000259701 , CA8968871068 , NO0010081235
"[...] We have a clear strategy for neutralizing sovereign risk in Papua New Guinea. [...]" Matthew Salthouse, CEO, Kainantu Resources
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 Corp - Excitement ahead of first-quarter numbers
The world's largest gold miner Newmont Mining is expected to report its Q1 numbers in pre-market today. Another set of record results are expected, despite the COVID constraints. The gold miner has already beaten analyst estimates in two of the last four quarters, and in the most recent quarter, Newmont posted a profit surprise of a whopping 11.6%.
As a result, the Company's first-quarter results are expected to reflect the benefits of higher gold prices year-on-year. Yesterday, the payout was announced: the gold producer will pay a quarterly dividend of 55 US cents per share to its shareholders, bringing the current dividend yield to about 3.4%.
We are curious to see what Newmont will report, as the stock has risen sharply again recently, even though its industry rivals were in correction mode. At the end of February, a low of EUR 45 was reached. Yesterday the stock was back at EUR 53. The high dates from May 2020 at EUR 64.8.
Sibanye-Stillwater - Strong figures, big ambitions
While 2021 looks like a solid year for precious metals miner Sibanye-Stillwater aside from COVID, managing director and CEO Neal Froneman has stressed that the Company remains on the lookout for value-enhancing merger and acquisition transactions. After many years of restructuring, the balance sheet is good, and the equity ratio is strong again.
At the World Gold Forum, Sibanye most recently announced it would continue to adhere to its dividend policy; potential acquisitions do not counter this point. The payout reached a total of ZAR 720 million in 2020, with free cash flow increasing in parallel to ZAR 1.2 billion. This year, Sibanye is targeting a 4% to 5% return.
There are now essentially no operational problems at Sibanye after the many strikes in 2020. The Company gained significantly in 2020, and one can expect the positive story to continue in 2021. According to management, gold prices are expected to increase considerably over the next few years, and the other metals from Sibanye's mines are also enjoying strong demand. The current price for the 4E basket (platinum, palladium, rhodium and gold) is around ZAR 60,000, representing a 50% increase over prices in the second half of 2020. Another area Sibanye has been exploring is battery metals, with the miner's recent investment in the European Keliber lithium project. Sibanye shares are currently consolidating at high levels, with prices below EUR 4 tempting investors to enter. A significant revaluation should be in store by 2025.
Troilus Gold - Best location in the middle of Quebec
In the best location of Quebec is another very prospective precious metals project, owned since 2017 by the Canadian Troilus Gold Corp. So far, more than 80,000 meters have been drilled. The indicated gold quantity reached 4.96 million ounces of gold in 2020; another 3.15 million ounces can be inferred. The former Troilus mine, located northeast of the Val-d'Or district of Quebec, produced a full 2 million ounces of gold and nearly 70,000 tonnes of copper between 1996 and 2010; it is located in one of the most favorable mining jurisdictions in the world.
The Troilus property was acquired in 2017 after extensive due diligence, and since then, indicated mineral resources have increased by 142% and inferred mineral resources by as much as 350%. The average gold grade is 0.84 to 0.87 grams per tonne. With many years of open-pit mining, the mine has a well-established infrastructure, including an extensive road network, a nearby substation with access to carbon-neutral hydroelectric power, a permitted tailings facility and an operating water treatment plant.
As a historical and future mine site, the Troilus site features a unique inventory of sustainable points toward environmental protection. With modern technology, Troilus is confident of minimizing the negative impact of a mine operation on the environment. That includes water protection as well as climate change and species protection in flora & fauna. The Troilus share stands at CAD 1.08 and thus a market capitalization of approx. CAD 140 million. The price targets of well-known research houses are, on average, CAD 3.84. The next gold pickup will not leave the stock at this level, as the project is one of the best in Canada.
Nel ASA - This can still go wrong
Another chart look at the Nel ASA share. After liberation from this year's sell-off, which stopped at around EUR 2.10, the Nel share launched a new bullish attempt in the direction of EUR 2.60. If this breakout is now to work, it must go with high turnover through the EUR 2.70-2.85 zone. A break of the recent momentum, on the other hand, would induce a renewed sell-off towards EUR 2.10 and lower. After all, the stock has put a 3-year super rally of plus 700% behind it. Almost every investor should be sitting on lush gains.
We highlighted hydrogen shares very well on the screen when the first correction thrusts broke over the industry in the middle of January. Then came the automotive industry's collective vote to favor battery technology - a slap in the face for hydrogen supporters. Since neither technology can become a blockbuster, investors should continue to be very selective with investments in the H2 sector. Set tight stop-loss limits to protect profits.