Close menu




October 7th, 2020 | 11:45 CEST

Nornickel, Newcrest Mining, Triumph Gold: Which stock benefits from rising gold prices?

  • Gold
Photo credits: pixabay.com

While the price of gold is slowly but surely picking up speed again, many investors are asking themselves with which share they will best profit, from rising precious metal prices. Many investors initially think of stocks such as Rio Tinto or BHP Billiton - but these companies are virtually not involved in the mining of precious metals. To profit from rising prices, investors must take a closer look. At first glance, Nornickel's stock seems to promise more of an investment in a producer of industrial metals. Still, the company also has many precious metals on offer - platinum and palladium account for more than 40% of the commodities produced. More critical are nickel and copper with a share of almost 50%. Gold and silver are only by-products.

time to read: 2 minutes | Author: Nico Popp
ISIN: CA8968121043 , US55315J1025 , AU000000NCM7

Table of contents:


    Bradley Rourke, President, CEO and Director, Scottie Resources Corp.
    "[...] 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.

    Full interview

     

    Nornickel: Environmental disaster impacts

    Even before the crisis, analysts assessed Nornickel as being solidly positioned. However, the stock has mostly escaped the commodity boom since the outbreak of the pandemic: On a one-year horizon, investing in Nornickel has yielded zero return. Among other things, an environmental scandal in Siberia has burdened the share. A tank of Nornickel spilt 21,000 tons of diesel and threatened a nature reserve. Observers even compared the incident with the 1989 accident of the oil tanker Exxon Valdez, and even Russian President Putin intervened and publicly criticized regional authorities and company management.

    Despite the wide range of strategic industrial and precious metals on offer, Nornickel's stock does not currently appear to be the right choice for investors who want to profit from the precious metal boom. Although platinum and palladium are also climbing, the metals appear to be too dependent on demand from the starving automotive industry.

    Newcrest Mining: Good fundamentals, scarce stock

    The situation at the Australian mining company, Newcrest Mining, is more straightforward. The company produces around 85% gold. Copper plays only a minor role. Thus the share qualifies itself from the outset as a suitable precious metal investment. Even before the pandemic, Newcrest was committed to the expansion and pursued the goal of acquiring promising projects. Newcrest also attaches great importance to the exploration of new deposits. In the first half of the year, for example, Newcrest succeeded in identifying new deposits at the Red Cris Mine in Canada.

    However, this good news has not been rewarded by the stock market: On a one-year horizon, the stock lost 12.8% - Newcrest Mining's shareholders did not benefit from the recent precious metal boom. Only short-term investors with the right hand could make a quick profit between March and August. Given the company's solid fundamentals and, in particular, its low costs, the stock seems to be well prepared for further losses.

    Triumph Gold: Interesting shareholders

    On a one-year horizon, even Triumph Gold's stock failed to convince all investors and posted a loss of around 12%. The company is exploring for gold and copper in a 200 km² area in the so-called Dawson Range, in the Canadian district of Yukon. The company recently completed the search for mineralization near the surface and is set to release more detailed results in the coming weeks.

    Jesse Halle, Triumph's exploration manager, is already confident that the results will reveal the new potential for the project. These results are to be explored in more detail from 2021.

    Thanks to successful financing round, this exploration program is already secured - shareholders do not need to fear any further capital measures. In the past, big names have participated in financing rounds: Currently, Newmont Mining and other professional investors are among the shareholders, in addition to the Zijn Mining Fund. The company has a current market value of only EUR 23 million.

    Smallcaps with more imagination

    While stocks such as Nornickel or Newcrest Mining score with mature business models and a high degree of transparency, stocks such as Triumph Gold offer investors a high degree of imagination. This is due to the early stage of exploration activity - virtually every report from the company can trigger significant market reactions. This can make even small investments promising in the long term. For many larger companies, however, small improvements and achievements are often less critical.


    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 in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on news.financial. These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.

    The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.


    Der Autor

    Nico Popp

    At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

    About the author



    Related comments:

    Commented by Fabian Lorenz on May 12th, 2022 | 11:12 CEST

    BioNTech, BYD and Desert Gold: Shares for the rebound

    • Gold
    • Electromobility
    • Biotechnology

    Is the rebound coming? After the heavy price losses of recent days and weeks, the market seems ripe for a countermovement. However, this would require a little more volume in the market. But then, especially companies that have not disappointed operationally should profit. BioNTech, for example, belongs to this group. The Company has published convincing figures, and analysts see up to 50% price potential. BYD's share price should also pick up speed again. Finally, the rapid shift to electric pureplay seems to be succeeding and HSBC has raised the price target. Gold was not a safe haven in the current correction. But it is worth looking at bombed-out stocks here as well. Desert Gold Ventures is one of them. The explorer has started a new drill program and secured financing.

    Read

    Commented by Armin Schulz on May 6th, 2022 | 10:43 CEST

    Barrick Gold, Edgemont Gold, Rio Tinto - Are gold stocks taking off again?

    • Gold

    With the start of the Ukraine crisis, the gold price skyrocketed, but since March 8, we find ourselves in a consolidation. The 200-day line is currently holding, and it could go up again from here. But let's look at the reasons for the weakness in the gold price. On the one hand, there is the strong dollar, which naturally puts pressure on the gold price, and on the other hand, bond yields in the US are climbing again. After the FED announced on May 4 that it would not raise interest rates by more than 0.5 percentage points, which was originally feared, the gold price jumped again. Demand for physical gold remains high. We look at three companies in the gold sector.

    Read

    Commented by Stefan Feulner on May 5th, 2022 | 10:46 CEST

    Rheinmetall, Triumph Gold, K+S - Hype or sustainable?

    • Gold
    • fertilizer
    • Defense

    Already during the Corona pandemic, clear winners and losers could be identified. Vaccine manufacturers multiplied, and companies related to online trading also performed better than the market. In the current Ukraine crisis, however, the signs are changing. Suddenly, defense stocks, which were frowned upon a short time ago, are all the rage. Fertilizer companies, benefiting from the sanctions and the resulting supply shortages, are also gaining favor with investors. But how sustainable are the current increases? Gold mining stocks are also doing very well, but in contrast to Rheinmetall, Hensoldt & Co., they are performing much weaker.

    Read