October 27th, 2021 | 14:38 CEST
Sierra Grande, Sibanye Stillwater, First Majestic - New developments!
High inflation argues in favor of investing in tangible assets such as equities, real estate and commodities. The traffic light is green for price increases in precious metals and energy metals in the medium term. Ultimately, investors must decide whether producers or exploration companies are of interest. Or perhaps a little of each?
time to read: 3 minutes
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Author:
Carsten Mainitz
ISIN:
Sierra Grande Minerals | CA82631L1085 , SIBANYE STILLWATER LTD. | ZAE000259701 , FIRST MAJESTIC SILVER | CA32076V1031
Table of contents:
Author
Carsten Mainitz
The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.
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Sierra Grande Minerals - Further good project progress
Based in the Canadian province of British Columbia, the Company specializes in the exploration of gold, silver, copper and molybdenum projects in their absolute early stages. In this regard, the Company focused on the US state of Nevada. Recently, the Company announced the results of its previously announced soil geochemical programs on its B&C Springs-Mildred (B&CS-M) projects in west-central Nevada. The B&C Springs property and adjacent Mildred claims and the Mildred mine to the southwest are located in the southern Paradise Range in the Fairplay Mining District, not far from the Paradise Peak open-pit gold mine. Previous exploration activities at B&C Springs have focused to varying degrees on copper-molybdenum-bearing, non-precious metal-bearing and precious metal-bearing deposits. At Mildred, the focus has tended to be on precious metals.
A total of 544 soil geochemical samples were collected. The results of the soil geochemical sampling demonstrate anomalous copper, molybdenum and silver geochemistry at B&C Springs. Airborne magnetometer surveys will begin shortly to carry out geological mapping and further geochemical follow-up investigations of the soil and potential geophysical soil investigations. Additional expansion of the claim holdings, particularly to the west, is also being considered.
The Company's properties are all located on what is historically known to be the high-grade Walker Lane trend. Further project progress and rising (precious) metal prices could significantly increase the Company's value in the medium term. Currently, the Company is valued at just under CAD 7 million.
Sibanye Stillwater - Acquisition in Brazil
The South African precious metals producer announced its entry into the energy metals sector a few months ago. Now, Sibanye Stillwater announced plans to buy the Santa Rita nickel mine and the Serrote copper-gold mine in Brazil. The mining group announced that it had signed a purchase agreement for both mines for USD 1 billion and a 5% net smelter return royalty on potential underground production from Santa Rita. Santa Rita is one of the largest open-pit nickel-cobalt-sulfide mines globally and is located in the state of Bahia. Serrate is a producing open-pit copper mine in the state of Alagoas that is currently in the start-up phase.
Sibanye CEO Neal Froneman described the acquisition as a "significant additional step" toward becoming a "climate resilient company." He added that the transaction gives Sibanye "significantly pre-developed and pre-capitalized, low-cost, producing nickel and copper assets with strong ESG characteristics. These continue to be managed by a highly skilled team with a wealth of operating experience in Brazil." Analysts rate the stock a "buy" with an average upside of 52%. The 2022 P/E ratio is just 4!
First Majestic - Is the stock maxed out?
The shares of the Canadians have gained 20% in the last 12 months. Analysts consider the stock to be almost exhausted at the moment, with an average upside potential of only 8%. With the "Jerritt Canyon Mine" takeover in Nevada, the Company had caused a stir in recent months. For the first time, the Company is now active outside Mexico and also in the gold sector. The most recently published data showed that business is going well. The production figures for the third quarter showed a record production of 7.3 million silver equivalent ounces, consisting of 3.3 million ounces of silver and 54,525 ounces of gold. The main contribution came from a 17% increase in production from the Jerritt Canyon Mine gold project. Due to the current weak silver price, the Company has completely stopped selling silver for the third time in the Company's history. 1.4 million ounces of silver are thus currently withheld from the market.
Investors should do well with the shares presented in an environment of high inflation. Sibanye has an extremely low company valuation. Analysts consider First Majestic to be almost exhausted. Sierra Grande Minerals is certainly the riskiest share but also offers the greatest opportunities. Further project progress is expected soon.
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