June 30th, 2022 | 11:03 CEST
Tocvan Ventures and BYD with outstanding news - TeamViewer plunges into a bottomless pit
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"[...] We quickly learned that the tailings are high-grade, often as high as 20 grams of gold per tonne; because they are produced by artisanal miners, local miners who use outdated technology for gold production. [...]" Ryan Jackson, CEO, Newlox Gold Ventures Corp.
Single digits and all-time low
One could foresee this development. The crash of the former stock market star and former MDAX member, TeamViewer AG, began last September with a further profit warning and the second capping of the outlook for the full year 2021. As a result, the last optimists lost their nerves due to the general market weakness in recent months. Since the peak in July 2020 at EUR 54.86, the paper of the software provider for remote access to, and remote control and maintenance of, computers and other end devices has lost more than 82% in value. The sad highlight is now the achievement of a new all-time low with prices for the first time below the psychologically important mark at EUR 10.
Looking at the indicators, it is unlikely that a quick trend reversal could start now. Thus, the relative strength index is still in neutral territory and has room to move downward, the trend follower MACD just marked a sell signal on a daily basis. The sell-off was accelerated by negative analyst opinions of the investment bank JPMorgan. Thus, the experts lowered the rating from "overweight" to "neutral ". In addition, the price target was massively capped from originally EUR 18.00 to EUR 12.00.
Bank of America also lowered its price target from EUR 13 to currently EUR 11. The rating was left at "underperform". As the analysts commented, the Goeppingen-based company aims to increase SMB sales, which would mean a steep re-acceleration after the decline in the first quarter. However, this could be challenging given macroeconomic uncertainty, competition and slowing demand for remote tools.
Tocvan Ventures with an anticyclical approach
Precious metals markets are suffering from the change in central bank strategy. The abandonment of the ultra-loose monetary policy and the raising of interest rates to beat rampant inflation sent precious metals markets tumbling in recent weeks. Even though further interest rate hikes have been announced by the monetary guardians, experts are increasingly saying that a return to zero interest rates cannot be ruled out. The risk of bankruptcy is too high for several debt countries. Moreover, further hikes are likely to fuel the recession scenario. In the long run, both gold and silver serve as inflation protection, so an anticyclical investment in select exploration companies like Calgary-based Tocvan Ventures at current levels could prove lucky in the long run.
Anticyclical investing is also the maxim of the management of Tocvan Ventures around CEO and geologist Brodie Sutherland. Tocvan was founded to profit from the ongoing downturn in undervalued target areas with the potential for large-scale mineral resources. In the process, the Canadians, working with teams with local experience and good relationships with local authorities, were able to secure 100% of two prospective projects in Sonora, Mexico.
The 'Aztec State' is one of the top ten gold producers globally, producing around 102t annually, and is the largest silver producer at 6,120t per year. Especially the state of Sonora with 37% of the total volume is considered the El Dorado of gold and silver miners in Mexico. Some of the world's largest producers, such as Fresnillo with its La Herradura mine or Magna Gold's San Francisco mine, operate high-grade projects. In between are the two properties of Tocvan Ventures, the El Pilar Mine and the El Picacho Mine. Especially on the flagship project Pilar, located between the producing mines of Argonaut Gold and Minera Alamos, excellent drill results have already been announced. Approximately 23,000m have been covered to date. The 2020 drill program returned 1.6g of gold over a whopping 94.6m. A section from this hole peaked at 10.8g gold and 38g silver over a distance of 9.2m. In the previous year, the strongest hole identified 0.96 g/t gold over 39.7m. Here, Tocvan delivered in part better results than neighboring mines at the already producing Argonaut and Minera Alamos mines.
More drill results are pending from the current drill program, but the results are similarly prospective. Based on the current results and geophysical and historical data, a resource estimate is expected to be made later this year. In terms of proximity to larger producers, the Pilar project is a potential takeover candidate. Thus, it would not be out of the question if before production starts, late 2023 has been speculated, the project would have a new owner.
In addition to El Pilar, Tocvan Ventures has a second promising iron in the fire. El Picacho is seen as an orogenic gold system within the Caborca regional gold belt, known for producing gold mines such as La Herradura and San Francisco, which are just 18km away. The team believes there are five gold and silver targets and a 6km gold trend. A 15,000m permit is already in place.
Milestone for the Company
The stock market value of the Company, which is also listed in Frankfurt, is currently around EUR 20.04 million. Despite the currently weakening precious metals market, Tocvan announced a milestone today. The British institutional investor Sorbie Bornholm LP has come on board with a total amount of CAD 5.125 million via a private placement. The funds will be used for the two projects and general operating purposes. The cash infusion gives Tocvan Ventures' management tremendous planning certainty to move forward with the projects over the next two years and beyond. Given their proximity to mines already in production, both projects have enormous potential. With the cash now in place, Tocvan now has enough flexibility to develop Pilar in particular into a producing mine next year.
Sell signal for BYD
In contrast, the Chinese electric vehicle company BYD continues to be in seventh heaven on the stock market and is rushing from high to high. However, the chart picture now got a blemish after the breakout, and the new all-time high at USD 43.61 was no longer confirmed. Thus, the price fell below the previous high at USD 41.24 and marked a clear sell signal. The next support would be last year's high at USD 35.94.
From a fundamental perspective, everything continues to go like clockwork. The "Build Your Dream" company acquired a new plot of land in Shenzhen, the Company's headquarters, with an area of over 550,000 sqm in the Shenzhen-Shantou Special Cooperation Zone, to build a new parts project. The new site is adjacent to another 400,000 sqm site purchased by Shenzhen BYD Auto Industry Company Limited last year. It also disclosed an investment in Chinese chip designer Tauren Semiconductor. BYD will receive a 2.48% stake in the semiconductor company by paying 49.5 million yuan, equivalent to about EUR 7.08 million.
Even though the gold market is still in correction mode, there are already attractive anti-cyclical entry opportunities in exploration companies such as Tocvan Ventures. TeamViewer may continue to be prone to weakness, and the correction in BYD is also unlikely to be over yet.
Conflict of interest
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