Takeover! Records! All-time high! Rheinmetall, Barrick Gold, Prismo Metals, and TUI

Barrick Gold strikes it rich

The Barrick Gold share has gained over 11% in recent days. The reason: the gold price is at an all-time high, and Barrick's cash register is ringing. In the second quarter of 2024, the world's second-largest gold producer increased its revenue from USD 2.8 billion to USD 3.2 billion. The gold produced was sold at an average price of USD 2,344 per ounce. In the previous year, it was only USD 1,972. Barrick increased the average selling price for copper from USD 3.70 to USD 4.53. Accordingly, Barrick's net profit in the second quarter rose from USD 305 million in the previous year to USD 370 million.

The outlook was also positive. Although the price of copper has fallen in recent weeks, gold has broken through the USD 2,500 per ounce mark. Barrick also expects production costs to remain low and production volumes to increase. Gold production in the second quarter of 948,000 ounces exceeded analysts' estimates. At the same time, the Company is working on ramping up the Goldrush mine in Nevada to an annual production of more than 400,000 ounces by 2028. The Fourmile project could even produce more than 500,000 ounces of gold per year in the future.

Prismo Metals: Can newsflow drive the share?

Explorers should soon benefit from the strength of the major gold producers. One exciting company in this area is Prismo Metals. The Company is valued at less than CAD 10 million and is focused on gold, silver and copper; it is currently advancing three projects in the US and Mexico. The historic Breccia gold and copper deposit is located in the US state of Arizona. If one drives across the border from Arizona to Mexico, you will find yourself in Sonora. It is here where the promising Pavitos gold and silver project is located, which is still in its early stages.

Prismo Metals' third project is Palos Verdes, located on the west coast of Mexico, where the company is collaborating with Vizsla Silver Corp. to produce an estimated 15.2 million ounces of silver equivalent according to the Preliminary Economic Assessment (PEA). The fourth drilling campaign began last week. It is intended to test the high-grade mineralization of the already-known vein up to one hundred metres deeper. This concerns both the southwestern part of the vein and the northeastern part via a cross-fault. In addition, an area adjacent to a historic mine called Jesusita will be explored. Chief Exploration Officer of Prismo, Dr. Craig Gibson, stated: "We are committed to pursuing the high-grade mineralization that we previously intersected in the Palos Verdes vein by taking advantage of better drill hole geometry made possible by drilling on the property of our strategic partner, Vizsla Silver."

From Prismo's perspective, Breccia (copper and gold) and Palos Verdes (gold and silver) are world-class exploration projects. And there will be an interesting news flow with drill results for both later in the year. The Prismo share should benefit from this.

Rheinmetall: Expanding in the US

While Prismo could benefit from a rising gold price and a likely upturn in takeover activity by major producers, the defense company Rheinmetall is driven by war and geopolitical tensions. Due to the "turning point" in global security, the DAX-listed company is seeing unprecedented increases in sales, profits, orders, and its share price. With the jump above EUR 557 yesterday, the share reached a new week-high, seemingly ending the consolidation phase that began in early April.

Rheinmetall intends to strengthen its position in the world's largest defense market with a takeover in the US. The Düsseldorf-based company is buying Loc Performance Products, a renowned vehicle specialist from the US state of Michigan, which fits well into the core business of land vehicles for military customers. The Company is valued at USD 950 million.

With this deal, Rheinmetall becomes one of two remaining participants in the current prototype phase of the XM30 program in the US. This program serves to introduce a new generation of infantry fighting vehicles, which has a volume of around USD 45 billion. Rheinmetall is also participating in the Common Tactical Truck (CTT) tender. This involves around USD 16 billion for around 40,000 trucks.

TUI: Share rises after record figures

A new all-time high for TUI shares is likely out of the question for the foreseeable future, but the Company is at least celebrating a record quarter. In the third quarter, the tourism group increased turnover by 9% to EUR 5.8 billion and EBIT - albeit adjusted - by EUR 62.4 million to EUR 231.9 million. On this basis, the EBIT forecast of +25% for the 2023/24 financial year was also confirmed.

All segments contributed to the positive business development. In addition, the Company has successfully refinanced itself and will also be able to repay the KfW credit line resulting from the COVID-19 crisis. This will take place in the first half of 2025.

Following the strong 2024 summer season, TUI is also confident about winter bookings. Although it is still early, bookings to date in the most important markets are above the previous year's figures with robust prices. Further details on the booking situation are to be published on September 24.

The TUI share gained more than 2% yesterday. However, the decline is still more than 20% in the current year.

TUI certainly seems ripe for further share price increases. The Company is making progress in reducing its debt and benefiting from competitor FTI's insolvency. While Barrick Gold is a standard investment in the gold sector and is currently earning very well, Prismo Metals could become a new high-flyer if the drilling results are positive in the further course of the year - the chances of this are quite good given the results to date. Rheinmetall seems to be doing everything right at the moment, although there are plenty of examples of failed US takeovers by German companies.