January 27th, 2022 | 12:12 CET
RWE, Tembo Gold, Barrick Gold - The course is set
For many shares, the market correction offers the opportunity to add quality to the portfolio at a more favorable level in the long term. Even if the low has probably not yet been reached, long-term anti-cyclical entry opportunities are currently available. The gold price entered a correction after reaching new highs in August 2020, when prices of over USD 2,060 per ounce were paid. Although the chart-technical picture for the gold price is not yet compelling, the current prices should at least be used to build initial positions. Fundamentally, the prospects for the precious yellow metal are already better than ever.
time to read: 3 minutes
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Author:
Stefan Feulner
ISIN:
RWE AG INH O.N. | DE0007037129 , TEMBO GOLD CORP. | CA87974N4057 , BARRICK GOLD CORP. | CA0679011084
Table of contents:
Author
Stefan Feulner
The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
He is passionate about analyzing a wide variety of business models and investigating new trends.
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Tembo Gold - With drive into the new year
The course for the exploration company Tembo Gold was set in the right direction twice last year. On the one hand, after a total of seven years of hiatus, it was important that the drilling programs started again and that there was a chance for a rebound. The highly prospective Tembo gold project is strategically located in the Lake Victoria goldfield in Tanzania next to one of the largest high-grade gold deposits in the world, Barrick Gold Corp.'s Bulyanhulu mine, with more than 20 million ounces of gold mined or contained to date. Due to the previous government, the Tanzanian mining industry experienced a slump and investment flight.
Now that a new, mining-friendly government is in power, investment from foreign investors is rolling again, and Tembo Gold also started a 7,000m drilling program in the fourth quarter, following up on previous drilling totaling 50,000m. Prior to the shutdown for maintenance and servicing, the deposit size was 110 sq km, which has now been expanded to 174 sq km, and drill targets have also been significantly expanded.
The mining industry received a boost in mid-December with the news that the second-largest gold producer, Barrick Gold, will initially acquire 6 licenses directly adjacent to Barrick's world-class Bulyanhulu mine in Tanzania from Tembo Gold for USD 6 million.
In addition, Barrick will become a shareholder of Tembo. Upon signing the purchase agreement, Barrick's subsidiary Bulyanhulu Gold Mine Limited agreed to subscribe for common shares of Tembo in a private placement at a price of CAD 0.27 per common share. Barrick is acquiring a total of 5,518,764 shares, which brings its shareholding in the Company to 5.5%. The future of the partnership with the major also looks bright. The world's second-largest gold producer committed to investing at least USD 9 million in the newly acquired license area over the course of four years following the closing of the transaction. In a best-case scenario, Tembo Gold could draw a total contingency of USD 45 million from this.
Tembo Gold's market capitalization currently stands at EUR 16.49 million. Due to the still relatively weak gold price, shares of the mining stock can also be acquired at a discounted level. Should the price rise sustainably, these are likely to benefit disproportionately.
Barrick Gold - Strong results
Speaking of Bulyanhulu, Barrick Gold's Tanzanian mines, North Mara and Bulyanhulu, produced more than 500,000 ounces of gold last year and are listed among the gold producer's Tier 1 assets. North Mara is on track to become a fully integrated mine with the planned commissioning of the Nyabirama pit in the current quarter. Operations are expected to commence in the third quarter of 2022, the Company said.
Bulyanhulu has been restored as a low-cost, long-life, world-class underground mine, having achieved steady production after ramping up mining and metallurgical operations in December 2021. With gold prices rising, Barrick Gold belongs in every gold portfolio alongside Newmont. Put the stock on your watch list.
RWE - Brilliant figures
RWE significantly exceeded full-year forecasts in its full-year 2021 figures, with the water, gas and biomass sectors, in particular, performing better than expected at the end of the year. RWE will publish the full results on March 15, but the preliminary figures caused the share price to jump by almost 3%.
Thus, the adjusted Group EBITDA amounts to EUR 3.650 billion and is above the forecast of EUR 3.0 to 3.4 billion. In the core business, adjusted EBITDA of EUR 2.761 billion also significantly beat the forecast of EUR 2.15 to 2.55 billion. Adjusted EBIT reached EUR 2.185 billion last year, compared with the forecast of EUR 1.5 to 1.9 billion. Net income amounted to EUR 1.569 billion. The dividend of EUR 0.90 per share is to be maintained.
The market correction offers anti-cyclical entry opportunities. In particular, the gold market is attractive in the long term after a correction. Barrick Gold is the industry's blue-chip, while the giant's entry set Tembo Gold in motion. The energy giant RWE is also running like clockwork.
Conflict of interest
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