29. March 2021 | 14:50 CET
Osino Resources, Yamana Gold, E.ON - Traders and Contrarians beware!
Falling yields on the bond market and rising inflation could very soon trigger a crash on the bond market that would also affect the stock market - in the short term. In such a scenario, crisis currencies like gold will benefit. Companies with good projects that produce the precious metal or are on their way to do so will benefit disproportionately from the rise in precious metal prices. We show you where you should position yourself.
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ISIN: CA68828L1004 , CA98462Y1007 , DE000ENAG999
"[...] Both the geology and the infrastructure around the project make for a very attractive cost structure. We expect to be able to produce at 50% of the current gold price. [...]" Bill Guy, Chairman, Theta Gold Mines Limited
OSINO RESOURCES CORP - 2021 will be harvested
Last week, the Canadian gold exploration Company announced an update on its ongoing CAD 17 million drill program and other targets for 2021. Osino Resources is focused on acquiring and developing gold projects in Namibia. The country is mining-friendly, politically and socially ranked as one of the most stable jurisdictions on the continent. In total, Osino Resources holds 23 exclusive prospecting licenses near and along the mineralized zones of the producing Navachab and Otjikoto gold mines owned by competitors QKR Namibia and B2Gold Corp.
Osino owns an area of a substantial 6,577 sq km. This year, the Company is focusing on defining and advancing the new Twin Hills gold discovery, particularly the Cloud East and West sub-areas within the Twin Hills Central zone, among other projects. According to the Company's statement, current drilling confirmed that Twin Hills is a very consistent ore body suggesting near-surface and high grades in the Clouds subzone and has the potential of an open-pit mine. In addition, the Company is drilling on previously unexplored areas.
The full year's goal is to publish a mineral resource estimate for the first time in accordance with Canadian industry standard NI 43-101. This would be a milestone in the Company's history, as it would allow a much better assessment of the project's economic potential. It could also be a significant share price driver. Results from previously unexplored sections of the vast site should also provide impetus. Thus, at currently around CAD 1.20, the share has by no means seen the highs yet. In our opinion, the Company's valuation of 126 million is moderate given the potential.
YAMANA GOLD INC - Analysts see upside potential of 50%
The Canadian precious metals producer owns a portfolio of several high-quality gold and silver projects, all located in mining-friendly jurisdictions in the Americas in Canada, Brazil, Chile and Argentina. In addition to creating long-life production assets, the Company is also active in much earlier stage projects. Growth occurs organically but also through shrewd acquisitions. Today, Yamana has a market capitalization of CAD 5.5 billion. Analysts believe that the share has an average upside potential of more than 50%.
Last week, the Company gave an update on two projects. The Malartic mine, in which Yamana holds a 50% stake, is located in the Abitibi region of Quebec near the town of Val-d'Or. Malartic is the largest gold mine in Canada, and currently, only open-pit mining is being carried out. By the end of the decade, production is expected to be expanded to include an underground mine (Odyssey project), which will then produce until 2039.
The second project reported on is El Penon. It is located in northern Chile in the Atacama Desert. The underground gold-silver mine was acquired in 2007; according to the seller's plans, the mine should no longer be in production today. Here, Yamana's exceptional strength is evident: continuously expanding mineral reserves and extending mine life. Since the end of 2019, the project's measured and indicated gold mineral resources increased by 16% to 765,000 ounces, while inferred gold mineral resources also increased by 16% to 850,000 ounces. Looking ahead over the next ten years, El Penon is expected to produce approximately 230,000 gold equivalent ounces per year.
E.ON SE - Negative factors dissolve, clear upside present
Gold for E.ON: the Group was the biggest weekly gainer in the Dax last week with a whopping 10% price gain. In particular, two aspects are likely to have led to the excellent performance. First, the presentation of the figures for the past fiscal year by outgoing CEO Johannes Teyssen provided a good and detailed look into the future. Second, there was progress on compensation payments for nuclear power plant operators, suggesting a resolution and payouts this year. A high level of debt and the hang-up over compensation payments had weighed on the share price for some time. Now progress should gradually translate into rising quotes. The analysts at Bernstein even trust the share to reach EUR 12.90.
In the middle of last week, the German cabinet approved a draft amendment to the Atomic Energy Act, which regulates the financial compensation for the energy companies affected by Germany's nuclear phase-out in 2011. After years of litigation between various affected energy companies, including E.ON and RWE, and the German government, an agreement was recently reached on a compensation sum of EUR 2.4 billion. This sum is intended to compensate for the damage caused to the operators by the premature nuclear phase-out. E.ON expects an inflow of funds in the mid, three-digit million range in the course of this year.
2021 should therefore be a good year for the Group - additionally also from the operating side. E.ON held out the prospect of an increase in adjusted operating profit (EBIT) to EUR 3.8 billion to EUR 4.0 billion and adjusted net income of EUR 1.7 billion to EUR 1.9 billion. Between 2021 and 2023, operating profit is expected to grow between 8 and 10% per year and the dividend is expected to increase moderately. There was also a concrete announcement about the issue of debt. In the current fiscal year, the Group will significantly reduce its debt factor to between 4.8 and 5.2. In 2020, debt was still 5.9 times EBITDA.