16. November 2020 | 09:48 CET
Velocity Minerals, B2Gold, Delivery Hero: We take up the fight!
The news of a vaccine against Corona with a success rate of 90% caused markets to skyrocket since last Monday. While the Dow Jones and the S&P set 500 new records, gold plummeted by as much as USD 118 in one day. Gold's most significant daily drop in more than seven years also wiped out its breakout from a 3-month downward wedge last Friday.
As gold futures closed below USD 1,890 this week on the Comex, the strong sell-off below this support brings with it the possibility that the zone between USD 1,750 and USD 1,800 will be tested again before the correction of the safe-haven metal's large gains finds a significant bottom. The gold futures base of USD 1,800 has technically become a critical support level, an area that dates back to the bull market of 2008.
time to read: 4 minutes by André Will-Laudien
"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Velocity Minerals - Gold from Eastern Europe
Velocity Minerals is a gold exploration Company focused on Eastern Europe. Central projects are located in Bulgaria, a member of the European Union since 2007 and an attractive target for mining investments. The Black Sea state has 7.1 million inhabitants and a GDP of USD 70.1 billion. With a per capita income of USD 9,313, the country ranks 75th in the world in terms of national income. Bulgaria's mining law was passed in 1999 and will be amended entirely in 2021. The current royalties in mining are meager and cheap compared to more established mining countries like Canada, Peru and Chile.
Velocity has a 70% joint venture interest in the Rozino Gold Project and has additional option agreements on the Kardzhali and Gorubso properties. Velocity is the first and only Company in Bulgaria to have approved and built a carbon-in-alkali processing plant. A promising sign for the "green" European mining industry.
Meanwhile, there are several positive analyst assessments of Velocity. The Globe and Mail reported in its October issue that Haywood Securities' analyst, Pierre Vaillancourt, began coverage of Velocity Minerals (CAD 0.46) with a "buy" rating and a stock target of CAD 0.90. The Globe's David Leeder writes in its "Eye on Equities" column that analysts are targeting stocks at an average of CAD 1.15. Mr Vaillancourt says in a note: "While we recognize that there is still significant work ahead of us to build a critical resource, we believe there is good potential for the development of satellite deposits as part of a wider mining complex in Bulgaria."
Velocity shares have had a 52-week range of CAD 0.20 to 0.54 and are currently trading at around CAD 0.46. The speculative value has a capitalization of only CAD 52 million, which has increased 31% over the year, but when gold turns, highly dynamic Velocity is a good investment.
B2Gold Corp - Floating on a good wave
B2Gold Corp reported adjusted earnings per share of 15 cents for the third quarter of 2020, broadly in line with consensus estimates. The bottom line was an 88% improvement from 8 cents in the prior-year quarter, reflecting solid performances in all of the Company's businesses and higher gold prices. Revenues reached a record USD 487 million, reflecting 57% year-on-year growth. This positive development was driven by a 36% increase in the average realized gold price and a 21% improvement in gold ounces sold.
Based on the assumption of a gold price of USD 1,900 per ounce for the remainder of 2020, B2Gold expects to generate cash flows from operations, in excess of, USD 900 million in 2020. A smaller B2Gold cooperation partner successfully repaid its debt. Calibre Mining made an early acquisition payment totalling USD 15.5 million to B2Gold which is now debt-free, and B2Gold has completed the repositioning of the group.
Over the past year, B2Gold's share price has gained a full 96%, compared to the industry's 45% increase. The Company has a market value of CAD 8.2 billion at a price of CAD 7.85. This does not have to be the end of the line for the figures.
Delivery Hero - Evil got under the wheels
Delivery Hero has been listed on the DAX since September 2020 but has virtually no business in Germany. Those who want to test Germany's new Dax Company and have a delicious menu delivered, will be disappointed: In this country, the group is not taking any orders, as the Berlin-based Company sold the German brands Foodora, Lieferheld and Pizza.de to its Dutch competitor, Takeaway.com, for around EUR 1 billion at the end of 2018. Delivery does business in over 40 countries and employs around 25,000 people. The most important market is Asia, with a sales share of more than 40 percent, followed by Africa and the Middle East. In Europe, Delivery Hero is still represented in the north and southeast, and Latin America is also considered a significant growth market.
A new Dax group without business in Germany - this is new in the history of the German leading index. Meanwhile, the share price has been going round and round for a month now. The Company was admitted to the DAX at around 90 EUR. Then within 6 weeks it went up steeply to EUR 115 (+27%), but then came "Vaccine Monday" and Delivery lost over 20% in the week until it stabilized on Friday at around EUR 99. A vaccination reduces the isolation of the people and instead inspires the restaurants in their core business of catering.
At the moment another takeover attempt is underway in Asia, but not without problems. The food delivery Company is supposed to sell its Korean business for the planned takeover of its competitor Woowa. The responsible department of the South Korean antitrust authority, KFTC, had advised the authority's decision-makers to make the sale of the South Korean subsidiary, Yogiyo, a condition for the joint venture. Investors were again disappointed by the news, with the share price falling by around 7.5 percent by Friday. With a market capitalization of EUR 19.7 billion, Delivery Hero is valued at 18 times its turnover, with growth in 2020 a staggering 70%. If one looks at the Nasdaq, this seems appropriate at the moment for specific industries, especially for an exploding delivery business in the pandemic. However, if this no longer applies, Delivery will have to be very careful.