March 15th, 2022 | 12:14 CET
Newmont, Ximen Mining, Barrick Gold - Deceptive calm
Table of contents:
"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
He is passionate about analyzing a wide variety of business models and investigating new trends.
Gold stopped before the all-time high
Last week, the gold price climbed to new highs in the euro, while in the US dollar, it was just under USD 4 short of topping the existing high of USD 2,074.70 per ounce of gold from August 2020 and thus generating a new buy signal. Since then, the crisis currency gold has dropped more than USD 100, the chart formation of the double top turned out to be a sell signal. A short-term test of the upward trend formed since September at currently USD 1,811 per ounce is within the realm of possibility as a first target. In the long term, gold continues to be seen as a protection against rising inflation, which we can expect more rather than less in Germany in the coming years.
Trend reversal also for gold mines
After a strong price performance in recent weeks, the shares of Barrick Gold rose from USD 17.50 to USD 26 at the high since the outbreak of the Ukraine crisis. The weekly candle also shows a trend reversal, which could result in a consolidation initially in the area around USD 21.50. If, on the other hand, the situation between the two neighboring countries escalates again, this should also have a positive impact on the Barrick Gold share. A new buy signal would result from a renewed breakout of the mark in the area of USD 25.37. At the world's largest gold producer Newmont, the starting point is similar. After rising from USD 54 to over USD 80 at the high, the value fell back below the critical support area at USD 75.20. The most likely scenario is a re-test of the short-term uptrend at USD 69.50.
A lot of movement at Ximen Mining
With a market capitalization of just under EUR 15 million, the exploration company Ximen Mining is still far from the valuations of Barrick Gold. However, the Vancouver, Canada-based Company is bustling with activity in terms of building up its precious metals portfolio, whose properties are each said to have a potential of several million ounces of gold.
The Canadians own a 100% interest in the Amelia mine in British Columbia, the Brett epithermal gold project, and the Treasure Mountain Silver project, linked to the former producing Huldra silver mine. An option agreement is also currently in place for the Treasure Mountain Silver project. The Company recently acquired the past-producing Kenville gold mine near Nelson, British Columbia, which includes surface and underground mining rights, buildings and equipment. Previous drilling programs demonstrate the extent of high-grade vein structures. Management sees tremendous potential primarily because only 50% of the property has been explored to date.
New Gold Inc. is also positive about Ximen Mining's portfolio and has joined Ximen Mining as an anchor shareholder with a 9.9% interest. Christopher R. Anderson, President and CEO of Ximen, commented, "Building strategic relationships with active partners in our community and jurisdiction is essential to Ximen's long-term goals. Ximen looks forward to deepening its relationship with New Gold. Their initial decision to invest in Ximen's projects and development plans is an excellent starting point." Given the project quality, the Company, valued at CAD 23 million, is worth a closer look.
Now that there has been some calm in the Ukraine crisis and hopes for a ceasefire remain, gold stocks that have done well in recent weeks, such as Barrick Gold and Newmont, are correcting. Ximen Mining is already bottoming out and is not overvalued at the current level.
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