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July 7th, 2022 | 14:13 CEST

Protect your capital! Crisis ahead! Thyssenkrupp, ArcelorMittal, Nordex, Tocvan Ventures

  • Gold
  • crisis
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The Germans are crisis weary. But this can be expensive! Instead of looking at COVID-19, inflation and climate change in isolation, it is vital to recognize where the mix can still lead. A recession and a further dynamization of inflation could be just the beginning. What if economies end up on the brink of bankruptcy and wealth disappears on a grand scale?

time to read: 4 minutes | Author: Nico Popp
ISIN: THYSSENKRUPP AG O.N. | DE0007500001 , ARCELORMITTAL S.A. NOUV. | LU1598757687 , NORDEX SE O.N. | DE000A0D6554 , TOCVAN VENTURES C | CA88900N1050

Table of contents:

    Bill Guy, Chairman, Theta Gold Mines Limited
    "[...] 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

    Full interview


    Thyssenkrupp & Co.: Energy shock could be just the beginning

    The poverty report published by the Parity Welfare Association a week ago showed that our prosperity is anything but guaranteed. According to the report, the poverty rate in Germany was at 16.6% in 2021. This report does not yet take into account the energy price shock of 2022. Although the federal government is trying with various measures to keep inflation away from people, the very likely escalation in the gas dispute and the passing on of the high prices from municipal utilities to consumers could cause the barrel to overflow for many people. Even today, observers calculate additional costs for families of around EUR 2,000 yearly, just for gas. With incomes in many sectors barely keeping pace with inflation, there is the threat of enormous cost pressure. Many middle-class families could slip down the social ladder.

    In addition, in Germany, many companies such as Thyssenkrupp, BASF and many auto manufacturers heavily depend on cheap energy. Some time ago, Thyssenkrupp was still profiting from rising inflation and raw material prices. But the energy price shock could put the Company out of business. ArcelorMittal has already revised its profit forecast downward. If the gas flow fails to materialize, the German steel sector faces the threat of short-time work and job losses. That would be bad news for the country's prosperity.

    Nordex: Wind power pioneer on the brink of collapse

    But even supposedly future-oriented industries are not self-sufficient these days. Wind turbine manufacturer Nordex has been suffering from high material costs and a staff shortage for some time. Sometimes it became difficult or at least expensive to deliver the huge rotor blades to their destination. Although the ideas presented by the Zero Emission Think Tank during the G7 summit in Elmau raised hopes that Germany could become independent of Russian energy by the end of the year, the matter does not appear to be so simple after all. While the team of leading scientists from the US and Germany emphasizes that it would take "only" 1,700 additional wind turbines, in addition to heat pumps, to make Russian energy obsolete in Germany, it is not clear that the project will be successful. Although the bottleneck of approval procedures has already been overcome, there is likely to be a shortage of skilled workers to master this effort. The number of installers with heat pump expertise is also limited. And so, the comeback of the Nordex stock, which has been frequently heralded these days, is likely to be tight. The competition, for example from Denmark, seems to have moved ahead. At best, the stock is currently suitable for speculation.

    Professional investors trust in the gold stock of Tocvan Ventures

    Considering the diffuse crisis situation, investors looking to the future can also focus on gold investments. Why? Although gold is not an immediate inflation beneficiary, the precious metal could take on a role as a safe haven in the event of further rising inflation in Western industrialized nations. Rising central bank interest rates are already weighing on the market conditions of EU countries, such as Italy. During the sovereign debt crisis in 2011, the gold price also had a party. If the loss of prosperity and the debt crisis cumulate in an EU crisis, gold should also pick up.

    The shares of Tocvan Ventures could function like a kind of insurance policy. The Company is focused on two gold projects in Mexico. The Pilar project is already well advanced. Currently, a Phase 3 drilling program is being implemented there. There are producing mines in the immediate vicinity. El Picacho is at a somewhat earlier stage of development. Here the Company discovered a new target zone only yesterday and found high grades of precious metals and also, zinc and lead in surface sampling. Particularly striking are the high grades, such as 7.2 g/t Au, 36 g/t Ag and 4.4% Pb, as well as 4.5 g/t Au, 197 g/t Ag, 4.8% Pb and 7.1% Zn. Since the Company was only recently able to close a financing of CAD 5 million, the value is considered an insider tip. The market environment is currently considered to be poor. Companies have to earn the trust of professional investors. In the case of Tocvan, the extremely low costs for exploration and mining of precious metals in Mexico helped.

    Tocvan Ventures is currently valued at around EUR 23 million. It was able to refinance itself in a challenging market environment and is advancing two promising projects in economically promising mining areas in northern Mexico. As early-stage precious metals projects usually offer leverage to the gold price, and gold is becoming an increasingly viable alternative for investors in the event of crises, investors may want to take a closer look at the shares of Tocvan Ventures. As of today, investing in stocks such as ArcelorMittal or Thyssenkrupp is certainly more speculative – if the gas flow dries up here, things will get tight. Even current stocks like Nordex are currently not putting their horsepower on the road. Investors should not ignore gold when there are multiple risk factors and the danger that the recession will become a self-fulfilling prophecy.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Nico Popp

    At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

    About the author

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