August 19th, 2022 | 10:45 CEST
Profit opportunities with Bed Bath + Beyond, Desert Gold Ventures, Barrick Gold
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"[...] One focus will be on deposits near the surface. These would be good arguments for a quick production decision using the low-cost heap leaching method. [...]" Brodie Sutherland, CEO, Tocvan Ventures
Born in Bielefeld, she studied German, English and psychology. The emergence of the Internet in the early '90s led her from university to training in graphic design and marketing communications. After years of agency work in corporate branding, she switched to publishing and learned her editorial craft at Hubert Burda Media.
Bed, Bath & Beyond - Gold rush
Small investors from the Reddit forum WallStreetBets have once again caused a share price to soar. This time it is US furniture retailer Bed, Bath & Beyond (NYSE: BBBY). Bed Bath & Beyond is up more than 400% since its late July low. The phenomenon of meme stocks is simple to understand: Users of fintech apps for small investors like Robinhood read online "tips" about stocks and then drive up prices with the desire to get rich quick. But most of the time, retail investors merely lose their savings through these approaches.
The uncrowned leader of this movement is entrepreneur Ryan Cohen. The Canadian is a smart businessman who co-founded the online pet supply store Chewy and brought it to annual sales of USD 3.5 billion in seven years. Under his leadership, the Company grew successfully until it was eventually sold to PetSmart for USD 3.4 billion in 2018. Cohen then stepped down to pursue new projects.
At the end of 2020, Cohen invested about USD 76 million in the acquisition with a 13% stake in GameStop. In January 2021, he joined GameStop's board of directors after Reddit traders coordinated a massive rise in the stock price and his fortune jumped.
Now Cohen is taking off with his Reddit army at Bed, Bath & Beyond. He bought 7,780,000 BBBY shares with 16,701 call options that will expire on January 20, 2023, at strike prices of USD 60 to USD 80. Through his stake in the Company, he also exerts pressure on its operational management. Through his influence, the CEO changed, while one of the baby products brands seemed undervalued to him and could overtake Bed, Bath & Beyond's actual value as a spinoff. Whether he succeeds in turning the retailer around remains questionable, nor are WallStreetBets users on his side.
Due to ongoing supply chain issues, first-quarter revenue was USD 1.46 billion, with a net loss of USD 358 million, or USD 4.49 per share. Worse than the loss of USD 1.28 per share expected by analysts. New numbers will be available in September.
Desert Gold Ventures - Still going strong in Mali
When it comes to the price of gold, opportunities outweigh risks. Due to inflation and global crises, gold was long seen as a hedge against inflation, which led to private investors increasingly turning to it. But unfortunately, the price could not hold and lost value after a short time. Only the interest rate hike of the central bank has made the non-interest bearing gold more attractive and consequently pushed the price up.
Investors should therefore also consider exploration companies. Whether an entry is worthwhile depends heavily on the quality of the exploration project. In terms of location, it is important to ensure that the area is easily accessible, e.g. by an existing road or rail network. Existing infrastructures such as power supply and access to drinking water also facilitate the work on site.
Environmental, social and governance (ESG) issues are coming into focus for attentive investors. The global precious metals industry is actively working to ensure the quality of the metals it offers and to support the lives and livelihoods of all those in the supply chain.
Desert Gold Ventures Inc. (NYSE: DAUGF) is an exploration and resource development company with gold projects in the African mining region of Western Mali. The Company's primary focus is on its 440 sq km flagship Senegal Mali Shear Zone gold project, where it is actively seeking a world-class discovery.
Now, Desert Gold Ventures Inc. announced results from the first drill hole at the Linnguekoto West deposit, a metallurgical drill hole at the Barani East deposit and the first two drill holes at the Mogoyafara South deposit. The inferred mineral resource of 66,200 ounces of gold in 1.39 million tonnes, grading 1.48 g/T gold1, is located in the south-central portion of the property.
According to Ministry of Mines, Mali's industrial gold mines are expected to produce 64.1 tons of gold in 2022, up from 63.4 tons in 2021. There is plenty of room for the share of Desert Gold to grow given the high gold deposits in its areas.
Barrick Gold - expansion through cooperation with Japan Gold
Gold investors who have gone long in the commodity rally need strong nerves at the moment. The bear is walking around in this market. For investors who want to stock up now, the times are ideal. Placeholder Barrick Gold Corp.(NYSE: GOLD) is currently trading at EUR 16.44, down 37.5% from its 52-week high. This could be the ideal investment, as the world's second-largest gold mining company is currently undervalued.
The Canadian company is expanding its exploration ventures around the world. The search for new deposits of mineral resources in North America has now expanded to include active projects in Canada. Increased exploration efforts in Latin America have led to an entry into the Guiana Shield. New projects in Africa were initiated in Zambia, Tanzania, Egypt, and the Middle East. A new Asia-Pacific team is making progress on the Reko Diq mine and is looking for more opportunities in Japan. There, Barrick is seeking a joint venture with Japan Gold.
"With the thorough evaluations completed by Allianz, the Company has a comprehensive and unique dataset on Japan's epithermal gold areas and is able to advance prospective areas that do not meet Barrick's criteria but may still host large high-grade gold deposits," John Proust, CEO of Japan Gold told investors.
The gold rush at Bed, Bath & Beyond may be a storm in a teacup, given the challenges of being a retailer in pandemic times. Additionally, inflation is holding back low-income consumers from re-furnishing. And that is exactly the US home furnishings chain's target buyer group. Investors should think carefully about whether to follow an artificially inflated company or prefer to focus on fundamentals. The gold market is currently somewhat more risk-averse. Setbacks in the price create the opportunity to increase the portfolio. If you like it a bit more dynamic, you should take a closer look at explorers like Desert Gold Ventures with its projects in Mali, Africa. A more in-depth analysis can be found here. The big player Barrick Gold continues to expand through its joint venture in the Land of the Rising Sun. The Company has strong capitalization, is performing well, and has flexible leadership to adapt to the challenging environment.
Conflict of interest
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