06. April 2021 | 11:04 CET
Scottie Resources, Barrick Gold, ThyssenKrupp - These stocks are taking off!
With each political message, the gold price fluctuates as rarely before. Since January, the trend has been down again after the August 2020 high of USD 2,074; it is now at least USD 350 lower again. Investors' risk appetite is robust because stocks and cryptocurrencies are in demand, while bonds and precious metals are currently somewhat neglected. Selling pressure in the bond markets has recently pushed the ten-year US yield to a 14-month high of over 1.77%. The selling pressure in precious metals is having a particularly negative impact on the world's largest gold ETF, SPDR Gold Shares, whose gold holdings have fallen from 1,171 to 1,038 tons since the turn of the year. However, because the mass is usually not correct, this rather implies an imminent recovery. In the following, we take a brief look at promising stocks.
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ISIN: CA81012R1064 , CA0679011084 , DE0007500001
"[...] We have a clear strategy for neutralizing sovereign risk in Papua New Guinea. [...]" Matthew Salthouse, CEO, Kainantu Resources
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Barrick Gold - Consolidation completed for the time being
Who would have thought it? The precious metal producer Barrick represents an annual production of over 7 million ounces and is thus, together with Newmont Mining, at the top of global gold mining companies. The Company was founded in 1978 by Peter Munk as Barrick Petroleum and went public in 1983 as Barrick Gold. In addition to gold, the Company also mines silver and copper. Barrick shares had a fabulous move in 2020 with plus 60% until August, then began consolidating back to the starting point of about EUR 15.
In parallel with the ongoing gold devaluation, Barrick Gold had to make good progress despite good figures, but the operating business has been running steadily upwards for several quarters. The Company had just reported that it had reached a net debt of zero by the end of 2020. Mark Bristow, CEO of Barrick Gold, recently spoke to the Prospectors & Developers Association of Canada (PDAC) and was very bullish about the further development of the gold price, referring to his Company's positive performance.
According to Bristow, investors are currently rushing into assets with no real value; he is of course referring to the utterly out-of-control development in cryptocurrencies. This buying panic is undoubtedly comparable to the tech bubble of 1997-2000 and the real estate bubble of 2006-2008, which then abruptly burst and left investors in the wrong stocks with historical losses of up to 95%. However, unlike the 2000 and 2008 crises, central bank liquidity has now arrived in the markets and asset inflation progresses. Anyone who wants to bet on gold is well served at this level with Barrick, and there will certainly be no ringing of the bell before the next crisis.
Scottie Resources - Back on the plan
Those who want to invest a little more specifically in gold and silver should look at the projects of Scottie Resources. They are in prime locations in the so-called "Golden Triangle," located near some heavyweights in precious metals production. The Golden Triangle is one of the most productive mining areas in the world. The mineral resources (past production and current resources) hosted there add up to 67 million ounces of gold, 569 million ounces of silver and 27 billion pounds of copper.
Scottie Resources Corp. owns an extensive property of 26,175 hectares near the currently closed, eponymous gold mine located in the heart of the Golden Triangle below a beautiful glacier range near Summit Lake, British Columbia. In the immediate vicinity, Pretivm Resources produced a handsome 347,743 ounces of gold in 2020, and Ascot Resources, also adjacent, will come back online as early as 2022.
Current Scottie drill results show mineralization ranging from 2.5 to 109.4 grams/tonne, and the historic mine has been successfully operated at cut-off values of 10g/tonne. The 2021 program calls for an additional 12,500 meters of exploration, and electromagnetic surveys from the Lust are also on the schedule. The waste rock piles from historic production are also of interest.
Scottie shares are 25% owned by institutional investors, with management holding a good 12%. The 144.2 million shares have a current market value of CAD 27.4 million at a price of CAD 0.19. The price has already consolidated extensively with the gold price and provides a good entry point for the next gold rally.
ThyssenKrupp AG - The steel division must be restructured quickly
The ThyssenKrupp share has nothing to do with gold, but it was one of the world's biggest steel producers in the past. Today's technology group has undergone significant restructuring in recent years. The operational realignment now seems to have been successfully completed, which, just as with the gold stocks described above, holds a great opportunity to catch up.
At the beginning of October 2020, the operational split of the automotive system engineering business at ThyssenKrupp was launched. For this purpose, the former "System Engineering" business unit will be split operationally and legally into two independent business units in the current fiscal year. In the future, there will be a plant engineering business specializing in body assembly which will continue to be managed in ThyssenKrupp's automotive supply and service segment (Automotive Technology). The existing powertrain and battery assembly activities will be combined in a company belonging to ThyssenKrupp's portfolio segment (Multi Tracks).
The Company's division and a drastic slump in orders in the past fiscal year caused by the Corona Crisis made restructuring necessary in Germany and abroad. Meanwhile, the Krupp Foundation is pressing for a rapid turnaround of the ailing steel business. The industrial group recently tightened its austerity measures at Steel and agreed with employee representatives to cut a further 750 jobs in addition to the current 3,000 job cuts. Following the cancellation of the steel division's sale to the British Liberty Group, ThyssenKrupp boss Martina Merz wants to make the Company's historic core business "independent." However, the foundation does not want to put up fresh money for this.
The ThyssenKrupp share saw its valley of tears at EUR 4 in 2020. If a solution is found for the steel sector, the stock could soon break above EUR 12 again and continue its northward trend. A BUY STOP at this level makes sense.