26. November 2020 | 11:36 CET
Osino Resources, Barrick Gold, Newmont: So are the doublers in Africa?
When it comes to growth, professional investors look to Africa as well as Asia. In 2018 Rwanda and Guinea were the world's fastest-growing economies: the economies of both countries grew by 8.6%. Even countries like Benin, Ethiopia, Gambia or Burkina Faso are still among the top 20 in the world. But what is the reason for high growth in Africa anyway? In addition to a young and rapidly growing population, which drives the domestic market, education from a level of training is also an essential factor. Only in this way can emerging economies also participate in more complex value creation. Legal security and stability are also important factors when foreign investors look to Africa. One country that is considered highly developed and legally secure within Africa is Namibia.
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ISIN: CA68828L1004 , CA0679011084 , US6516391066
"[...] In our experience, the local communities are supportive and friendly. [...]" Steve Cope, President, CEO and Director, Silver Viper
Osino Resources - driving the gold project forward with great strides
Formerly under the colonial influence of Belgium and Germany, Namibia, along with South Africa, is considered a model country with a high degree of legal security and stability. The Canadian Company Osino Resources, for example, is taking advantage of this by searching for gold in Namibia. Since August, the Company has drilled 25,000 meters and has explored significant gold grades over long distances. The results suggest that the Twin Hills project could potentially be exploited in open pit mining in the future, which usually brings cost benefits.
Osino Resources is planning further drilling for 2021 and plans to drill a total of 45,000 metres with eight rigs. The aim is to confirm previous assumptions and further expand the resources of the project. At the end of the work, a database will be created that may convince even large companies in the industry to work with Osino Resources.
Companies such as Barrick or Newmont are looking for new deposits that can be mined profitably and are continually taking over small companies. That Osino is a promising prospect is also seen by renowned investors such as Rothchild & Co, Earth Resource Investment, or Mackenzie Investments. They are all shareholders. In total, 34% of Osino Resources' shares are in the hands of investment professionals. A further 38% is held by management and other related parties.
Although the stock has been in reverse over the past three months, the Company's earnings over a one-year horizon are around one hundred percent. Since analysts, such as Echelon Capital Markets, believe that a doubling of the share price is possible even at the current level, speculative investors should take a closer look at the share.
Barrick wants to turn gold portfolio upside down
The gold producer Barrick Gold is already present in Africa. With projects in Saudi Arabia, Mali, Tanzania, Zambia, DR Congo and Côte d'Ivoire, Barrick has an impressive Africa portfolio. This year, however, Barrick announced that it intends to sell its less profitable mines. One candidate could be the Tongon mine in Ivory Coast.
Although the pandemic is currently blocking due diligence work that is necessary in the run-up to such transactions, this could be made up for if the global pandemic eases. If the takeover carousel then picks up speed, Osino Resources could once again become more of a focus for the major producers.
Newmont with pent-up demand in Africa
One of these producers could be gold giant, Newmont. The Company currently has only two projects on the African continent in Ghana. Since Newmont is currently swimming in the money just like Barrick - Newmont's cash flow in the third quarter was a whopping USD 1.3 billion - the expansion of the Africa portfolio for the world's gold market leader could be an obvious move. Other producers are also already scratching their hooves and, given bubbling profits, are interested in replacing depleted reserves with new projects.
Namibia combines the best of Africa and Europe
Although many investors regard Africa as a challenging investment region, the differences between the individual countries are substantial. From stable democracies whose laws and administrative regulations are strongly reminiscent of those in continental Europe or Great Britain, to stable autocracies with a strong focus on foreign investor satisfaction, to unstable political systems, the continent has everything to offer. In the middle of a country that has been democratically constituted since 1990, Osino Resources has developed a promising project, and the chances are good that the stock will attract further interest from investors in the future.