12. August 2021 | 12:21 CET
Varta, Barrick Gold, Aztec Minerals - Before the showdown!
There is currently no sign of summer doldrums on the capital markets. Not only BioNTech is exploding, shares of lithium and battery producers are also rising strongly. On the other hand, the gold price is going crazy: After better-than-expected data from the US labor market, the gold price buckled significantly at the start of the week and has only recovered slightly so far. Nevertheless, the industry has positive news: heavyweight Barrick Gold increases profits, and at Explorer Aztec Minerals, investors ask when the knot will burst? The battery specialist Varta is also exciting at the moment, and Friday will be a showdown.
time to read:
ISIN: VARTA AG O.N. | DE000A0TGJ55 , BARRICK GOLD CORP. | CA0679011084 , AZTEC MINERALS CORP. | CA0548271000
"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Aztec Minerals - When will the knot burst??
Aztec Minerals (ISIN: CA0548271000) is doing very well at the moment. The exploration company has released the first drill results from the Phase 2 reverse circulation drill program. High gold and silver mineralization was encountered in five drill holes. Also positive was the discovery of older prospect pits that likely pre-date 1900, proving that there are high-grade deposits here. Only such deposits could be mined at that time, and with today's technology, it should be possible to extract considerably more. Thus, the expectations of the management, which consists of renowned industry experts, were clearly exceeded. The management team includes geologist Allen David v. Heyl. In the past, he worked for companies such as Barrick Gold and Zijin Mining, where he was responsible for the discovery and evaluation of more than 30 million ounces of gold and 25 million tons of copper.
The Canadian junior is focused on properties in North, Central and South America. The largest project, Cervantes, is located in Sonora, Mexico. Aztec holds a 65% majority interest in the prospective porphyry gold-copper deposit. Aztec also has a 75% majority interest in the Tombstone multi-metal property in Cochise County, Arizona. High deposits of gold, silver, lead and zinc are suspected here.
The coming months will be exciting for Aztec. Following the discovery of additional gold-copper-molybdenum soil and rock geochemical anomalies at the Cervantes property in Mexico, a Phase 2 reverse circulation drilling program will soon commence, where 22 drill holes will be explored for up to 5,000 m. Overall, Aztec is broadly positioned as an explorer, and the projects all appear very promising. In contrast, the current market capitalization of only CAD 17 million seems attractive for an entry. On the positive side, the share has been trading in a narrow range for months - despite the weak gold price. Now the question is: When will the knot burst?
Barrick Gold with profit and dividend
The shares of industry heavyweight Barrick Gold (ISIN: CA0679011084) have been unable to buck the falling gold price in recent weeks. But operationally, things are going quite well. The world's second-largest gold producer produced 1.04 million ounces in the second quarter (previous year: 1.35 million ounces) and generated sales of USD 2.89 billion (previous year: USD 3.06 billion). Adjusted earnings were USD 0.29 per share, 3 US cents above analyst estimates. It also announced a quarterly dividend of USD 0.09 and a special dividend of USD 0.14. The payment is scheduled to be made on September 15, 2021. Barrick also reiterated its guidance. During an interview with Kitco NEWS, Barrick CEO Mark Bristow expressed optimism for gold prices, "I always remind people of 2008, 2009, the global financial crisis, all those problems. The market did not react to it because it was desperately waiting for us to get out of the crisis before we could even really assess the damage it had done. It was not until 2011 that we saw everyone react to the damage, and of course, the price of gold went up and stayed up until beyond 2013. I think we are seeing the same thing now."
Varta - big bag on friday?
The Varta share (ISIN: DE000A0TGJ55) has performed strongly in recent weeks. In the meantime, it is already trading above EUR 160 and is thus approaching the all-time high at around EUR 181. There has been no concrete company news recently, but more and more short sellers seem to be on the retreat and stocking up. In addition, the German battery leader benefits from the overall good mood around lithium and electromobility. Tomorrow, Friday, will be the showdown. That is when Varta will present its half-year figures. In its core business with batteries for wireless electronics, such as headphones, Varta should earn very well. A new plant has also been put into production. Therefore, capital market participants speculate that Varta will increase the forecast. And perhaps there will be more details about the activities around the announced car batteries. Analysts - who have been somewhat critical of the Company for months - are conspicuously holding back. Should Varta actually raise its forecast, they will have to react.
All three shares are facing exciting weeks. Varta may see price swings as early as tomorrow, and Barrick is a basic investment in the gold sector. If you like it more speculative, take Aztec - before the next drill results come in!