March 17th, 2022 | 10:08 CET
Uranium Energy Corp., Barsele Minerals, Endeavour Silver - Commodities for the future
Table of contents:
"[...] Internally we expect the resource to significantly grow the deeper we mine. [...]" Dennis Karp, Executive Chairman, Manuka Resources
Uranium Energy Corp. - Short-term scare, but the rally continues
The war between the Russian Federation and Ukraine, which has been going on for several weeks, has already presented many horrific images. In addition, reports of fighting around Ukrainian nuclear power plants, including the shutdown Chernobyl reactor, caused a scare among the world's population. Many felt reminded by rising columns of smoke of the April 1986 disaster and the March 2011 accident at Fukushima in Japan. Following the massive gains made by uranium companies since their classification as "green technology" by the EU Commission, some investors got cold feet and preferred to take the partly massive gains from the previous price rally.
The same happened to the shares of the Texan Company Uranium Energy Corp. Since the beginning of the year, the Americans have come up with a very appealing news flow: Presentation of an S-K 1300 compliant resource estimate for the In-Situ Reno Creek project in Wyoming of about 32 million tons of triuranium octoxide (U3O8), freedom from debt after repayment of loans as well as the takeover of the Willow Creek properties of the competitor Uranium One. But last week, the share fell by nearly a third. And this despite the fact that the uranium price increased by more than 15% in the same period and almost doubled within a year. This price level allows the usually low-grade American mines to produce profitably.
Barsele Minerals - Political security as an investment factor
War in Europe - If the current news teaches us one thing, political stability is one of the most important criteria in investment decisions. Russian stock exchanges have been closed for over two weeks, and trading in Russian shares suspended. Russia is threatening Western companies with nationalization. Of course, this is an extreme example given the regional proximity, but especially in the mining sector, many companies are operating in politically fragile regions of the world.
Barsele Minerals stands out positively in this respect, as the Canadian exploration company focuses on Sweden's politically and economically sound mining region. The Belcarra Group-led company, with a 45% ownership stake, is a junior partner in the joint venture developing the Barsele Gold Project. Senior partner Agnico Eagle (55% interest) is conducting and financing exploration on the property.
In recent years, 404 drill holes totaling 155,000m have been drilled. The 2019 NI 43-101 compliant resource estimate indicated approximately 2.5 million ounces of gold. Currently working on expansion, the Company has formulated a next stage target of 3.5 million ounces of gold. The planned takeover of the share of Agnico Eagle by the Canadians failed in recent months. But the subject is not yet off the table.
The size of the project and the Company's valuation speak in favor of the share. The Royal Bank of Canada already valued the project at USD 375 million in a 2016 survey - at a gold price of USD 1,350 at the time. The troy ounce stands at USD 1,900 now, and Barsele Minerals is valued at only CAD 65 million on the stock exchange.
Endeavour Silver - Good figures confirm management's strategy
The business figures presented last week for the full year 2021 have impressively confirmed the previous business strategy of the management. Production figures were consistently above forecasts. Sales were the highest in five years. And the decision to stockpile its produced silver and only put it back on the market when prices rise is also proving to be spot on given the current price trend.
Despite the freeze on sales, a net profit of USD 0.08 per share was achieved, compared with USD 0.01 in the previous year. The Company is also gearing up for the future. A cooperation agreement was recently signed with Max Resource Corp., active in the Colombian copper belt.
Uranium shares have celebrated a comeback in recent months, and the run should continue. Precious metals prove their worth in crises. If gold surpasses the all-time high in the coming months, gold stocks will benefit enormously. That will include Barsele Minerals. Those who want to bet on the precious metal's little brother, silver, should take a look at Endeavour Silver.
Conflict of interest
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