14. April 2021 | 12:30 CET
Osino Resources, Barrick Gold, Sibanye Stillwater - Gold in Turnaround!
The large gold producers are left lying in the current environment. What counts on the capital markets is the slight inflation, which one gladly accepts, because the economies have been suffering for years from the prescribed minus interest rate and deflationary tendencies. In other stock market cycles, demonetization phases were always good times for the precious metals; this is not yet evident at present. After the significant correction in March 2020, there were sharp rises in mining stocks until late summer 2020, but a large part of the gains will gradually melt away again in 2021. Is there still hope for the precious metals?
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ISIN: CA68828L1004 , CA0679011084 , ZAE000259701
"[...] In our experience, the local communities are supportive and friendly. [...]" Steve Cope, President, CEO and Director, Silver Viper
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Osino Resources - The first drill results are in
Canadian Osino Resources offers a notable exception with its properties in Namibia. Osino's exclusive exploration licenses portfolio is located within the prospective Damara mineral belt, mainly near the producing Navachab and Otjikoto gold mines, covering a total area of approximately 7,000 square kilometers. Initial results have just been released in the form of a NI 43-101 report for its Twin Hills gold project in Namibia's Erongo region.
To find a conclusion about a mineral resource, many technical parameters of the drilling location, angle and size of the land under investigation are published. In the case of Osino, 69,000 meters have been drilled, of which assay data has been evaluated for approximately 62,000 meters. Drilling will now continue with the objective of upgrading the mineral resource to the Indicated category by the end of 2021.
Management is extremely pleased with the current results. Heye Daun, President and Chief Executive Officer of Osino, commented as follows: "The publication of this maiden mineral resource is the culmination of almost five years of hard work, starting in 2016 when Osino commenced greenfield exploration in this area which had seen decades of conventional prospecting by multiple operators and was considered mature by established Namibian geological dogma." The Twin Hills gold project under the Kalahari sand and limestone cover is now slowly taking shape; this is all the more exciting as it is only 20 kilometers from the largest gold deposit in southern Africa outside the Wits Basin (Navachab).
Osino shares were at CAD 1.05 three weeks ago and have since swung up to CAD 1.50. Regardless of the consolidating gold market, the drill results are very well received, which should soon lead the value into a new valuation dimension.
Barrick Gold - Dispute in Papua New Guinea settled
Barrick Gold is one of the massive producers behind Newmont Mining. The Company, which as recently as 2013 was saddled with a debt mountain of more than USD 13 billion, now has zero net debt, no significant maturities over the next 10 years and a robust balance sheet with solid liquidity of more than USD 5 billion. The quarterly dividend has been tripled. At the annual general meeting, the board had recommended that an additional USD 750 million in cash be distributed this year as a return of capital to shareholders.
Barrick recently announced that its subsidiary Barrick Niugini Limited (BNL) and the Government of Papua New Guinea (PNG) have agreed on a partnership for the future ownership and operation of the Porgera gold mine. It is expected to be restarted by the end of 2021. It has been in care and maintenance since April 2020, when the government refused to renew its special mining lease.
The dispute now appears to have been resolved. Under the terms of the agreement, ownership of Porgera will be held in a new joint venture, 51% by PNG stakeholders and 49% by BNL. BNL will remain the mine operator, and both PNG and BNL shareholders will share economic benefits on a 53/47 basis. BNL will fund the capital required to restart the mine. In addition, a group of landowners has been awarded an increase in royalties. The state retains the right to acquire the remaining 49% of the mine from BNL after 10 years at current market value. Barrick Gold shares have been relatively unspectacular this year, consolidating from a high of EUR 20 to below EUR 17. Currently, the share is on hold.
Sibanye Stillwater - Great 12-month performance
The mining Company Sibanye Stillwater is active in precious metals mining in South Africa, the USA, Zimbabwe, Canada and Argentina. It is the world's largest producer of platinum, the second-largest producer of palladium, and the third-largest producer of gold. Sibanye was founded in 2002 and, although it has a global presence, has kept its headquarters in Weltevredenpark, South Africa.
In 2020, after a lengthy restructuring, the Company went public in Johannesburg, which also included acquiring the remaining quotas of Sibanye Gold. Since the IPO in February 2020, the share price has developed very well; in the meantime, the price had slipped to EUR 1. The decisive factor was reducing debt and integrating the important gold assets in South Africa into the previously fragile balance sheet. After carrying out two significant capital increases, everything has now been cleaned up.
Sibanye reported a profit of ZAR 30 billion in 2020, up from ZAR 62 million in 2019, which was a profit multiple. The reason was the increased profitability of the Marikana gold mine in Rustenburg. The Company had the opportunity to produce a full year in 2020 despite the Corona pandemic, and there were some strikes by miners in South Africa in 2019. But what played into the Company's hands the most was the skyrocketing palladium price; platinum also appreciated from its low by over 30%. Sibanye Stillwater is now one of the best positioned precious metals commodity companies globally, and the share revaluation is still in full swing.