April 22nd, 2022 | 10:51 CEST
Rio Tinto, Ximen Mining, Barrick Gold - Shares to counter the crisis
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"[...] We are convinced that we could already leverage significant potential with a drilling program of around 35,000 meters. However, to finance this, we need a decision. Fortunately, there are already interested parties who can imagine advancing Barsele together with us. [...]" Gary Cope, President and CEO, Barsele Minerals
Ximen Mining - Well diversified
If the experts of the US investment bank Goldman Sachs have their way, the end of the line has not yet been reached for this year. According to Kitco News, they assume the factors mentioned above should even drive the gold price above the USD 2,500 per ounce mark in 2022. In general, gold belongs at least as an admixture in every portfolio. Gold mine producers such as Barrick Gold or Newmont are indispensable to any portfolio. Shares in smaller, attractive exploration companies such as Ximen Mining offer even more potential but with more risk.
The stock market value of the Vancouver-based company, which is listed on the TSX in the US and in Frankfurt, amounts to just EUR 12.39 million. When looking at the intrinsic value of the 100% owned precious metals projects, there should be a significant upside. These include the Amelia gold mine and the Brett epithermal gold project. An option agreement is in place for the Treasure Mountain silver project, which is adjacent to the past-producing Huldra silver mine, whereby Ximen receives staged cash and share payments annually, and the option partner finances the project's development.
The Company recently acquired the past-producing Kenville gold mine near Nelson, British Columbia, which includes surface and underground mining rights, buildings and equipment. The historic mine was the first incorporated underground mine in British Columbia. From 1890 to the 1950s, it produced 65,381 ounces of gold, grading a high 12.8 g/t. Considering that only half of the property has been explored to date, there is great potential to be dug out of the ground here.
To fund its exploration activities in its resource concessions in British Columbia, Ximen Mining completed a private placement totaling CAD 1.32 million. On a positive note, CEO Christopher Anderson participated in the private placement on a larger scale.
Barrick Gold - On the right track
Final results for the first quarter of 2022 will be released on May 4, but one of the world's largest gold producers reported lower gold production in the first three months. As previously forecast, Barrick's 2022 gold production is expected to be lowest in the first quarter and increase throughout the year, while copper production is expected to be higher in the second half of the year. Still, Barrick Gold is on track to meet full-year guidance for both gold and copper.
From January through March, the Toronto, Canada-based company reported preliminary first-quarter sales of 1.0 million ounces of gold and 113 million pounds of copper and preliminary production of 1.0 million ounces of gold and 101 million pounds of copper. The average market price for gold in the first quarter was USD 1,877 per ounce, while the average market price for copper in the first quarter was USD 4.53 per pound. In the wake of the Ukraine conflict, the stock was initially able to surpass the May 2021 high of USD 26.07 but then fell back below this level again. In addition, indicators are currently overheating, which means that a consolidation could set in, at least in the short term. The support area at around USD 22.00 could be a target here.
Rio Tinto - Narrowly failed
The chart situation for Rio Tinto looks similar. After doubling since the Corona low in March 2020, the world's second-largest mining company seems to be running out of steam at around USD 76. This mark has already been tested four times in recent years, but a sustainable breakthrough has never been achieved. On the indicator side, negative divergences are forming, and consolidation initially in the area around USD 64.50 is not unlikely.
Like Barrick Gold, production was weaker in the first quarter, but the annual forecasts are still being adhered to. Rio Tinto shipped 71.5 million metric tons of iron ore from its operations in Australia's Pilbara region in the first three months, down 8.0% YOY and 15% from the final quarter of 2021. The delayed ramp-up of the Gudai-Darri project, where production is scheduled to start in the second quarter, and ongoing challenges in commissioning the Mesa A Wet Plant slowed the plan to increase iron ore production at Robe Valley, Rio Tinto said. Likewise, blown supply chains and continued high infection rates due to the Corona pandemic weigh on the company.
Rio Tinto plans to ship 320 million to 335 million tons of iron ore from Australia for the full year, which would be about the same as its 2021 level of 322 million tons.
High and longer-than-anticipated inflation is weighing on the economy and on each individual consumer. In addition, the situation in Ukraine continues to cause uncertainty. Gold mining stocks such as Barrick Gold or Ximen Mining or producers of scarce commodities such as Rio Tinto serve as protection in the long term.
Conflict of interest
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