February 18th, 2022 | 11:37 CET
Nvidia, Globex Mining, Barrick Gold - Best conditions for rising prices
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Impressive figures from the giant
The countermovement in the precious metal gold is underway. The critical resistance to overcome is getting closer and closer at USD 1,916.35 per ounce. Even if the first attempt should not yet lead to a liberation blow, gold is still considered the instrument to protect against high inflation in the long term. Given the high national debts, the monetary guardians are likely to be extremely cautious with too large interest rate steps to avoid pushing several hopelessly over-indebted states into ruin. For the gold producers, it should be noted, business is flourishing even at a gold price of around USD 1,800 per ounce.
The second-largest producer, Barrick Gold, provided proof of this with the announcement of the figures for the past fourth quarter. At USD 3.31 billion, sales were around 17% higher than in the previous quarter, exceeding analysts' estimates of USD 3.147 billion. With net income doubling to USD 726 million and earnings per share of USD 0.35, the analyst consensus was also exceeded. In addition to a share buyback program totaling USD 1 billion, shareholders will receive a USD 0.10 dividend.
As a result of rising energy and generation costs, next year, production will be more expensive for Barrick Gold. AISC - all-in sustaining costs - rose 17.5% in copper production to USD 2.62 per pound from USD 2.23 per pound a year earlier. In the gold segment, costs increased by about 6%, from USD 967 per ounce in 2020 to USD 1,026 currently. For the next quarter, the Company plans costs between USD 1,040 and USD 1,112. Following the release of the final figures, the share price rose by 7.5% to USD 22.23. In the long term, the market leader belongs in every gold portfolio. However, the value is strongly correlated with the prevailing base price.
Globex Mining - This is unique
Despite decades of capital market experience, one comes across companies that sheerly fascinate one. As of late, this certainly includes the mining industry incubator, Globex Mining. Back in 1983, Jack Stoch, originally a geologist and now CEO, took control of the Company and developed it with a group of exploration professionals using a unique buy-and-build strategy. Unlike most other junior exploration companies, Globex owns its properties, many of which are available as options.
The Canadians are debt-free and, in addition to CAD 20 million in cash, currently own more than 200 projects. These have resources or reserves, mineralized drill intercepts, mineral occurrences, untested geophysical targets, or a combination thereof, and are located in eastern Canada, the US and Germany. The diversified portfolio includes precious metals such as gold, silver, palladium and platinum, base metals such as copper, zinc, lead and nickel, specialty metals and minerals (manganese, titanium oxide, iron, molybdenum, lithium, rare earths and antimony) and industrial minerals and compounds (mica, silica, apatite, talc, magnesite, potassium feldspar and pyrophyllite).
The Company has grown for decades without major dilution from capital increases. Its business model is to option land parcels from its holdings for cash and shares, thereby retaining royalties on future production. In addition, the option partners assume the exploration risk. In addition to acquiring and optioning properties, it also develops its properties at a minimum rate of CAD 1.5 per year.
Globex Mining has been listed on the Toronto Stock Exchange since 1996. The stock is also traded in Frankfurt and on the OTCQX International Exchange in the USA. The market capitalization is currently EUR 49.98, but the portfolio's intrinsic value is likely to exceed this significantly.
Record results thanks to scarcity
Chips have been considered the gold of our time since last year at the latest. The shortage led to plant closures and short-time work in many sectors, especially in the automotive industry. In contrast, the leading semiconductor specialist Nvidia is benefiting and posted record results for the fiscal year that ended in January. The increase in sales amounted to 61%, and due to the increased prices, the profit even exploded by more than double to USD 9.75 billion compared to the previous year.
The current quarter, characterized by chip bottlenecks, also plays into Nvidia's cards. The US company expects sales of USD 8.1 billion, while analysts had expected USD 7.3 billion. Negatively impacting the result is the advance payment of USD 1.36 billion due to the planned Arm acquisition, which SoftBank, however, does not have to repay. There is also additional risk with the procurement of individual components and excessively long delivery times throughout the supply chain. Despite strong numbers, Nvidia ended the trading session in deep-red territory. In the process, the price bounced off the resistance at USD 267.57. Setbacks back to the area around USD 240.50 are therefore possible at any time.
The FED has met again and announced several interest rate steps in the current year. However, the statements were less tight than expected by many market observers. Precious metals benefited, driven by solid figures from the giant Barrick Gold. Globex Mining offers a unique business model in the sector of second-tier mining companies. Nvidia brought excellent figures and belongs on every watch list after the setback.
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.
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