Steinhoff, MAS Gold, Barrick Gold - What is next?

Barrick Gold - Further down?

Low interest rates and rising inflation, in the USA, the inflation rate of 6.8% in November meant the highest level since 1982 and the historically highest national debts. These are the facts on the table. Even those responsible for price stability have now admitted that this situation is likely to persist and that it may be difficult or even impossible to fight it. In addition to price stability, problems such as over-indebtedness, the economy's competitiveness, and the financing of climate protection are also popping up. The monetary system, especially in the eurozone, is at its limit. But no one seems to want to take a closer look.

The fact that this dilemma has not yet reached the general public's consciousness can be seen in the development of the precious metal markets. Especially the historically best protection against inflation, gold, has been bobbing around USD 1,780.00 per ounce for months. The shares of the largest gold producers are also still in a broad correction, technically even with further setback potential. Fundamentally, this is not easy to understand, as the companies are posting record results and continue to earn splendidly with a gold price at the current level. In addition, the past record year with gold prices above USD 2,000 per ounce made it possible to significantly reduce the debt burden and build up significant cash holdings.

The share of the second-largest gold producer, Barrick Gold, is currently marking a new low for the year at USD 17.65. The next strong support is at USD 16.00. The Corona low of March 2020 was also here. Should the title attack this level again, there should be a historic buying opportunity here at the latest.

MAS Gold - First-class conditions

In addition to gold producers, in which one should build up anti-cyclical positions step by step, smaller exploration companies such as MAS Gold are also attractive to participate disproportionately in the long-term rising gold market. At MAS Gold, on the one hand, the first-class management around CEO Jim Endahl, equipped with many years of experience, is a strong asset. On the other hand, it is the location of the projects - located in the La Ronge Gold Belt in north-central Saskatchewan, with first-class infrastructure. Here, the Canadians operate four properties totaling 33,843 hectares, including the Greywacke Lake, Preview North, Elizabeth Lake and Henry Lake properties.

Since the 1940s, exploration has outlined numerous gold deposits and showings, including past producers such as the Komis, Jolu and Jasper mines. To ensure efficient and cost-effective operations, mineralized material from the various deposits is hauled to a central facility near Noth Lake.

On the news side, the past few weeks have seen a flurry of activity. First, updated mineral resource estimates for the North Lake and Greywacke North gold deposits were announced. At a marginal cut-off grade of 0.40 g/t, North Lake is estimated to contain an Inferred Mineral Resource of 18,100,000t grading 0.85 g/t gold, equivalent to 494,000 contained ounces of gold. Compared to the 2020 estimate, the 2021 update increased the estimated tonnes by 28.3%.

At Greywake North, the updated estimate was 645,000 tonnes grading 4.90 g/t gold or 101,000 contained ounces of gold, and 410,000 tonnes grading 4.12 g/t Au, or 55,000 ounces of gold. CEO Engdahl feels that the latest results confirm that the combination of the two concession areas will achieve the target of one million ounces of gold.

In addition, a letter of intent was signed with Comstock Metals for MAS Gold to acquire 100% of the Preview SW property. The 843-hectare Preview SW property is adjacent to Preview-North and hosts historic resources with a cut-off grade of 0.50 g/t gold. The transaction is to be paid for with 30 million common shares of MAS Gold.

Steinhoff - Is this the redemption?

Something is happening at the German-South African trading group Steinhoff. After the former Tekki Town owners obstructed the settlement in South Africa by filing for liquidation, a breakthrough seems to have been achieved. The former owners and Trevo Capital complained that they had been paid with overpriced Steinhoff shares in the deal at the time.

In return for a payment of around EUR 27 million and an additional 29.5 million Pepkor shares, which currently have a market value of EUR 34 million, the dispute was put to rest. Trevo Capital received far out-of-the-money options for Pepkor shares with three-year terms. The stock market celebrated the apparent redemption with price fireworks. However, this is not yet a final rescue of the highly indebted group, but an important milestone has been taken.

The central banks see the problem of long-lasting inflation and are cutting back their bond-buying programs. However, this is by far not enough to stop the price increase. In the long run, gold, like with producer Barrick Gold or exploration company MAS Gold, offers at least partial asset protection.