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March 10th, 2022 | 10:22 CET

Nordex, K+S, Desert Gold: Commodities out of control

  • Gold
  • Commodities
Photo credits: pixabay.com

While the broad stock market suffers from Russia's war of aggression in Ukraine, commodities are becoming increasingly expensive. On Tuesday, the price of nickel had doubled, and the London Metal Exchange even suspended trading. Prices are also going through the roof for virtually all other commodities such as oil, gold, gas and wheat. Accordingly, shares from these sectors are currently in demand. Such as the potash producer K+S because large competitors from Russia and Belarus are currently cut off from the world market. Analysts have recently been cautious. Desert Gold is benefiting from the high gold price. In addition, the Canadian explorer has published promising resource estimates. Driven by the political announcements to replace fossil fuels even faster with renewable energies, Nordex was one of the past week's winners. Now, however, the Company has published sobering figures. But hope remains.

time to read: 3 minutes | Author: Fabian Lorenz
ISIN: NORDEX SE O.N. | DE000A0D6554 , K+S AG NA O.N. | DE000KSAG888 , DESERT GOLD VENTURES | CA25039N4084

Table of contents:


    Bill Guy, Chairman, Theta Gold Mines Limited
    "[...] Both the geology and the infrastructure around the project make for a very attractive cost structure. We expect to be able to produce at 50% of the current gold price. [...]" Bill Guy, Chairman, Theta Gold Mines Limited

    Full interview

     

    Desert Gold - Goes full throttle after convincing resource estimate

    Of course, the industry giants Barrick Gold and Newmont benefit from the rising gold price. Those who like it more speculative buy shares of exploration companies. One example is Desert Gold. The Canadians own two exploration projects in Mali, SMSZ and Djimbala. Another project (Rutare) is located in Rwanda. For the SMSZ project, the important NI 43-101 resource estimate was recently published. According to this, SMSZ has indicated mineral resources of 8.47 million tonnes grading 1.14 g/t gold. That equates to a total of 310,300 ounces. And from this, inferred mineral resources of 20.7 million tonnes grading 1.16 g/t Au totaling 769,200 ounces of gold.

    Desert Gold CEO Jared Scharf is confident, "This initial mineral resource is a significant milestone for the Company and represents an excellent starting point. The Company believes that further drilling will significantly expand these resources and develop new resource areas such as the 1.6 km Gourbassi North West discovery. We anticipate a busy 2022 with a planned drill program of more than 20,000 meters and high expectations for positive drill results."

    Desert Gold shares trade on numerous German exchanges - including Tradegate - and their home exchange in Canada. The security is currently trading at 9 cents, well below its 2020 all-time high of 19 cents. Desert Gold is currently valued at around EUR 13 million.

    Nordex - Figures for 2021 disappoint

    Nordex has been suffering from high material and transport costs for months. Due to the announcement - among others by Finance Minister Lindner - that even more is to be invested in the expansion of renewable energy in the coming years, the difficult operating development at Nordex was ignored by many investors. With yesterday's publication of the preliminary figures for 2021, investors were brought back down to earth. The wind turbine manufacturer increased sales by 15% to EUR 5.4 billion. However, earnings margins were down. EBITDA fell from EUR 94 million to EUR 50 million. A disappointment. Midday Wednesday, Nordex stock is down 4% in a positive overall market. The only bright spot is order intake. It increased from 6.0 to 7.95 GW. The first analyst reaction to the figures came from Jefferies. For them, the development is as expected. Accordingly, the buy recommendation was confirmed with a price target of EUR 20.

    K+S - No longer a buy?

    Since Russia's attack on Ukraine, the fertilizer price practically only knows the way up. Russia and Belarus are important potash exporters. As a result of the sanctions, these are no longer available for the time being, and at the same time, the growing season for crops is beginning in the northern hemisphere. As a result, prices for urea fertilizer on the Chicago exchange rose by 46% to USD 805 per ton between February 24 and March 8. Interest in K+S is correspondingly strong at present. However, analysts' comments are increasingly cautious. Since February 28, there has been no buy recommendation among three research updates. Yesterday, Deutsche Bank raised the price target for the K+S share from EUR 17 to EUR 22 but left the rating at "Hold". On Monday, JPMorgan had even confirmed its "Underweight" rating. K+S should benefit from the rising prices for potash, but the share has just also already run well. Previously, UBS had already spoken out with a "Neutral" recommendation and a price target of EUR 17.10.


    Volatility on the stock markets is expected to remain high. News around the war drove the prices of commodities and shares - positive and negative. K+S and Nordex have already run well and are driven by momentum; how long this will last remains to be seen. Desert Gold is still a long way from its old highs, although - apart from the higher gold price - it has made significant operational progress.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Fabian Lorenz

    For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.

    About the author



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