December 17th, 2021 | 14:06 CET
Triumph Gold, First Majestic, K+S - Something is happening here!
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"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Triumph Gold - Well positioned
The signs are good for rising gold and copper prices in the medium term. The precious metal is traditionally used as a crisis currency in times of high inflation and turbulent stock markets. The triumph of electromobility is leading to a significant increase in demand for the red industrial metal. This big picture makes the stock of exploration company Triumph Gold attractive. The Canadians own 100% of the Freegold Mountain project, which is 200 sq km in size. The project is located in the Dawson Range copper-gold belt in the mining-friendly Yukon and hosts three mineral deposits, Nucleus, Revenue and Tinta Hill. Triumph Gold also owns 100% of the Big Creek and Tad/Toro copper-gold properties near the Freegold Mountain project.
A drill program was initiated in the summer. Earlier this month, the Company reported data from three drill holes totaling 897m in the Blue Sky Zone (BSZ). The highlight was an intersection over a length of 106.5m with a mineralization of 0.76 g/t gold equivalent (AuEq). Drilling encountered multiple styles of mineralization, including porphyry style stockwork veins, disseminated sulphides, sulphide breccias and epithermal veins. With just under half of the drill program completed at this time, investors can expect more news soon. It should then provide more information about the potential of the Nucleus deposit, the Big Creek South fault zone and the Orbit zone. With a market capitalization of currently just under CAD 14 million, the Company is moderately valued.
First Majestic - Analysts expect higher prices
Recently, First Majestic Silver completed the previously announced issuance of unsecured convertible senior notes due 2027 in the aggregate principal amount of USD 200 million and placed an additional USD 30 million in volume through the full exercise of the over-allotment option granted to the initial purchasers. The initial conversion rate is 60.3865 common shares per USD 1,000 par value, representing an initial conversion price of approximately USD 16.56 (approximately CAD 21.21) per share. The notes bear interest at 0.375% per annum on a semi-annual basis.
Currently, the shares of First Majestic Silver are covered by five analysts, who rate the stock with an average price target of CAD 20.34. Currently, this results in an upside potential of almost 50%. The Canadian Company has a market capitalization of CAD 3.5 billion.
K+S - Hanging game over
In recent weeks, the Kassel-based fertilizer group was able to end two important hang-ups. After extensive antitrust reviews, the establishment of the joint venture REKS for the disposal of hazardous waste with the Remondis subsidiary REMEX was finally waved through. Beforehand, however, REMEX had to sell its stake in competitor Minex.
K+S expects the transaction to be completed before the end of the year. That will allow the Group to generate a one-time income of EUR 200 million in the fourth quarter. In addition, the Kassel-based Company will generate a cash inflow of about EUR 90 million before taxes. K+S thus renewed its guidance for the current financial year and now expects operating earnings (EBITDA) of EUR 830 million.
In addition, the Group was able to report a success elsewhere. The financial supervisory authority BaFin had commissioned the German Financial Reporting Enforcement Panel (FREP) to examine the amount of impairment losses that affected the balance sheets for fiscal 2019 and the first half of 2020. The FREP has now concluded that everything was correct.
To avoid a loss of purchasing power in times of high inflation, investing in tangible assets is a good idea. The general conditions for further increases in commodity prices are in place. That applies to precious metals as a crisis currency, copper in the course of electromobility, and agricultural commodities. Thus, all three described shares are worth a closer look. Triumph Gold seems particularly attractive to us.
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