December 29th, 2021 | 10:23 CET
Osino Resources, Barrick, First Majestic - Winners for 2022!
Historically, the current gold price level of a good USD 1,800 per troy ounce can be considered high. This year, gold producers were able to post record profits. In the medium term, many things point to rising precious metal prices. Decisive framework conditions are the low-interest rate level, inflation, economic growth, the condition of the stock markets, the level of gold reserves, and the long-term production outlook.
time to read: 3 minutes
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Author:
Carsten Mainitz
ISIN:
OSINO RESOURCES CORP. ON | CA68828L1004 , BARRICK GOLD CORP. | CA0679011084 , FIRST MAJESTIC SILVER | CA32076V1031
Table of contents:
Author
Carsten Mainitz
The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.
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Osino Resources - Breakthrough in 2022
After successfully advancing the Twin Hills gold project this year, Osino recently concretized its next steps. The Company plans to release a new technical report with an updated mineral resource estimate in the second quarter of 2022. This Pre-Feasibility Study (PFS) will enable an improved assessment of the project's economic viability. To date, only a Preliminary Economic Assessment (PEA) in accordance with Canadian Standard NI 43-101 is available for the open pit project. According to the April 2021 PEA, the project has an estimated gold resource of 0.43 million ounces at 1.00 g/t in the indicated category and 1.47 million ounces at 1.08 g/t in the inferred category at a 0.5 g/t cut-off grade.
A bankable feasibility study is expected to be completed as early as the end of the third quarter of 2022. If this turns out to be positive and the project financing is in place, then initial work could still begin towards the end of 2022. The capital increase carried out in November with gross proceeds of CAD 10.5 million should have been large enough to finance the majority of the planned projects.
The Twin Hills gold project is located in central Namibia in what is known as the Damara Sedimentary Belt, also referred to as the Namibian Gold Belt. In total, the Company holds a land package of approximately 6,700 sq km in this region with good infrastructure.
The Company is currently valued at CAD 134 million. With the release of a larger resource estimate and better visibility on the project's economics in the second and third quarters of 2022, the stock should see significant gains over the next year.
Barrick Gold - How does this fit together? Record profits in 2021 and a falling share price
Based in Toronto, Canada, Barrick Gold is the world's second-largest gold producer. Its business activities include the production and sale of gold and copper, exploration activities, and mine developments. Approximately 90% of sales are in the precious metal and 8% in the industrial metal, copper. The Company holds interests in 14 gold mines, including six tier-one gold assets, i.e., mines producing at least 500,000 ounces of gold per year over a ten-year period or more.
The Company's gold mines are well diversified geographically and are located in Argentina, Canada, Côte d'Ivoire, the Democratic Republic of Congo, the Dominican Republic, Mali, Tanzania and the United States. Geographically, the most important location is the United States. Overall, the assets are of high quality and long service life.
Even though the group brought in record profits this year, gave shareholders special dividends and should meet guidance, the stock will end the current year in the red. Thus, the market is pricing in a roughly flat gold price and rising costs. However, analysts are almost unanimous in rating the stock as a buy and believe the shares have an upside potential of 45%.
First Majestic Silver - Exciting year comes to an end
The past year was memorable for the Canadians. The operator of several silver mines in Mexico deviated from its tried-and-true corporate strategy on two fronts. First, in terms of geography, the acquired Jerritt Canyon project is located in the US state of Nevada. Second, it is a gold mine on a 30,821-acre property that first produced in 1981.
Recently, First Majestic refinanced itself significantly more favorably with a convertible bond in the volume of USD 230 million. Together with rising gold production, this should boost the share price in the coming year. Analysts believe that the stock has an upside potential of almost 50%.
Investors can benefit from a high gold price and corporate profits by investing in the three stocks described above. Primarily, this applies to Barrick and First Majestic. In our opinion, Osino Resources has the most significant potential. Determining a resource in the second or third quarter of 2022 should lead to a revaluation of the stock.
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