17. June 2021 | 13:58 CET
NewPeak Metals, Barrick Gold, Aurelius - A league of their own, performance without end!
Most experts agree gold will soon reach a new high. Who wants to invest not only physically in the precious metal can participate in "gold companies." As a rule, good quality companies perform better than the "underlying." The safest option is to invest in producers, but the potential return is much higher with exploration companies due to the higher risk. Which will you choose?
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ISIN: AU0000104374 , CA0679011084 , DE000A0JK2A8
"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
NEWPEAK METALS LIMITED - When will the first stage ignite?
When the value of the individual parts of a company are much higher than the current stock market valuation, this makes not only value investors sit up and take notice. Especially when companies have a low market capitalization and move under the investment community's radar, these mispricings can be even more pronounced and last for a more extended period of time. A company that fits precisely into this picture is the Australian NewPeak Metals. The micro-cap weighs in at just around AUD 15 million. But this could change quickly.
NewPeak is a very diversified exploration company. This is atypical, as explorers usually have only a few projects in their portfolio and also focus geographically. NewPeak owns three high-quality gold exploration assets in Argentina, Finland and New Zealand, plus a tungsten project in Sweden and a 29% stake in Australian oil and gas Company Lakes Blue Energy. But this diversification makes sense and will create value for shareholders in different ways. At this point, some readers may be asking, how is this going to work? Where is all the money for project development going to come from?
NewPeak has a well-thought-out funding plan. For the gold assets in Argentina, a joint venture is the most viable solution. A larger mining company takes a majority stake in the project and develops it. NewPeak will then have a smaller share of the pie, but it will be many times larger. Several drilling programs will start in Argentina, Finland and Sweden in the summer. These will then allow resource estimates according to the international JORC standard in late 2021 and early 2022. This categorization enables a more accurate assessment of the project value. Commonly, JORC resources lead to noticeable share price increases. We expect this trigger for the Finnish gold project already at the end of the current year. The Finnish project has very high-grade gold.
Finland is also Europe's largest gold producer. But also in the neighboring country Sweden it will be hot this summer. The Swedish project focuses on tungsten. This metal is high on the European Union's list of critical metals in terms of availability and economic importance. Due to its high melting point and, at the same time, great flexibility, tungsten has exceptional material properties that are sought after in many industries.
However, one trigger that could significantly boost the share price in the next few weeks is the investment in Lakes Blue Energy. Currently, this investment is not trading on the stock exchange. Among other things, a moratorium by the Australian state of Victoria was decisive. Victoria had issued a ban on gas exploration, but this will be lifted as of July 1. When the stock last traded, the 29% stake was worth about AUD 15 million - as much as NewPeak's entire current market capitalization. And if you look into the team's ranks, you will see names like Nick Mather and Neil Stuart, both of whom have taken companies from virtually zero to a valuation of over USD 1 billion. Too good to be true? We think this little-known stock represents an extremely exciting investment opportunity.
BARRICK GOLD - Solid Big Player
Barrick is a heavyweight in the industry and the second-largest gold producer in the world. But size is both a curse and a blessing. As a result, the projects that the Canadians get their hands on have to be significant. The Group owns many of the world's most productive gold areas and also several copper projects.
In the current fiscal year, the Company is targeting production volumes of 4.4 to 4.7 million ounces of gold and a copper output of 410 to 460 million pounds. Barrick operates in 13 countries worldwide, particularly in North and South America and Africa. The Group generates rich profits and high cash flows due to high raw material prices. The Company is not in debt. On the contrary - in the first quarter, the war chest was bulging with USD 5.2 billion. In addition, the Company had credit lines amounting to USD 3 billion. As a result, this gives the Group all the flexibility to acquire projects or companies and then develop them further. This makes it exciting for shareholders of smaller companies to see if Barrick will not take hold here.
AURELIUS EQUITY OPPORTUNITIES SE & CO KGAA - Yield driver
Some commodity companies have "produced" phenomenal returns for their shareholders in the past. In addition, several specialized investment companies have generated high-value growth. One of these is Munich-based Aurelius. Since its founding in 2006, the Company has evolved from a local turnaround investor to an international multi-asset manager with various vehicles. The core business activity of the listed Aurelius Opportunities SE & Co. KGaA is the investment in corporate spin-offs and medium-sized companies with high development potential. In doing so, the Company takes an active approach to support the operating business.
At the beginning of June, Aurelius announced the complete acquisition of Hüppe. Hüppe is one of Europe's leading manufacturers of shower partitions, shower trays, wall cladding and bathroom accessories and currently employs around 470 people. Shareholders who joined Aurelius' IPO in 2006 have seen their assets increase by a factor of 26! Currently, the South Germans have a stock market value of just under EUR 770 million at a price of around EUR 25.