08. October 2021 | 11:28 CET
Nordex, Desert Gold, TUI - The wind is changing
The DAX is back on top after a brief but painful correction and the slide below the psychologically important 15,000 mark. Was that it, and is the German stock market barometer preparing for a year-end rally and a renewed jump above the 16,000 mark, or will further price losses follow? A long consolidation phase could also be over for certain individual stocks, just like in the precious metals markets.
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ISIN: NORDEX SE O.N. | DE000A0D6554 , DESERT GOLD VENTURES | CA25039N4084 , TUI AG NA O.N. | DE000TUAG000
"[...] The transaction offers benefits to all parties: Shareholders now have three promising projects in their portfolio. [...]" Bradley Rourke, President, CEO and Director, Scottie Resources Corp.
Gold before a new upward wave
The fact that the precious metal is used both as a crisis currency and as protection against inflation is well known, and it has often been proven in the past. All the more astonishing, despite the current circumstances, there has not yet been a flight into gold or its little brother silver. Currently, the precious metals sector is fundamentally very attractively valued, and many of the companies were able to come up with record figures.
The shares of the gold mining explorer Desert Gold, for example, shone in the recent past with a strategically significant acquisition. Yet, the stock is still available at a discount of almost 50% compared to its highs in January of this year. The Canadians focus on deposits in the African state of Mali, the fourth-largest gold producer on the African continent.
The flagship project SMSZ is named after the Shearzone between Senegal and Mali and covers an area of 410 sq km. SMSZ is strike-linked to five major mines north and south, including B2 Gold's Fekola mine, Barrick's Gounkoto and Loulo mines, and Allied Gold's Sadiola and Yatela mines.
The acquisition of the 30.6 sq km Kolomba concession, which is associated with SMSZ, expanded the zone last month. Desert Gold's CEO, Jared Scharf, calls it a perfect fit for the Company's strategy going forward. With the strategic location of the Kolomba concession and the quality of the exploration targets within its boundaries, Kolomba will be a high priority in the upcoming exploration season.
The last time Kolomba was worked was in 2003, at which time the gold price stood at USD 363 per ounce. The acquisition features two prospective gold zones. Highlights from past drilling include up to 16.03 g/t gold over 7m, 7.78 g/t gold over 19m, and 3.51 g/t gold over 29m in the Linguekoto West zone. At the second zone, Mogoyafara, past drilling has revealed 2.04 g/t gold over 41m, 20.87 g/t gold over 6m and 1.40 g/t gold over 55m.
Desert Gold's market value is currently only EUR 12.28 million. Given the quality of the project, the share should benefit disproportionately in the event of an expected long-term increase in the gold price.
Is the wind turning?
The never-ending story of wind turbine manufacturer Nordex could come to an end at the current level. Orders after orders have been running across the news tickers for weeks, but the share only knows one way, south. Yesterday's low at EUR 12.64 and a reversal above the EUR 13.00 mark now offer the chance of an end to the negative trend. The next chart resistances are waiting at EUR 14.00.
Investors were in a positive mood after the announcement of an order from Ukraine. The Hamburg-based Company will supply 10 N149/5.X turbines for the 54.6 MW "Skolivska" wind farm. The order was placed by the Eco-Optima group of companies and also includes a fifteen-year maintenance contract. The start of work is targeted for the spring of next year.
End of the suffering?
The tourism industry was undoubtedly one of the losers of the Corona pandemic. Without state aid, it would have been impossible for tourism giant TUI to continue as a going concern. With a capital increase of around EUR 1.1 billion, the Hanover-based Company now wants to tackle refinancing and reducing the use of state loans.
In the process, the number of shares is to increase by almost half to more than 1.6 billion. Russian investor Alexei Mordashov, who currently holds 32% of TUI, is still on board. He intends to keep his stake constant and subscribe to the corresponding number of shares.
The share of the tour operator rose by more than 10% to EUR 4.125 in the course of trading. Too much for Nord LB and analyst Wolfgang Donie. With this measure, the Company now provides a little more room to maneuver, but it is still a long way to a healthy balance sheet. His verdict is "sell", and the price target has even been lowered again from EUR 2.70 to EUR 2.60.
After a correction of several months, the precious metals markets are about to start a new upward wave. The gold mining explorer Desert Gold has high long-term potential with its project. Nordex may have seen its lows, and one should be cautious with TUI despite the positive sentiment.