10. May 2021 | 12:20 CET
White Metal Resources, Newmont, Bitcoin Group - Fighting inflation with gold and bitcoin
Physical assets are an option investors should consider if they want to protect their money. However, investors should be very careful not to equate or even confuse inflation protection with expected returns when it comes to assets. In this regard, today, we would like to take a closer look at the conservative gold and the more speculative bitcoin. While gold was able to break free from the consolidation last Friday and should now continue to rise, bitcoin has not yet been able to close the gap between April 16 and 19. However, the upward trend in Bitcoin is intact. Today we present attractive paper investments in these asset classes.
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ISIN: CA9640461062 , US6516391066 , DE000A1TNV91
White Metal Resources - Explorer with a lot of potential
White Metal Resources has a long history as an explorer of metals such as gold, palladium, platinum, silver, copper and zinc. The Company has entered into various joint ventures with companies that want to mine the metals it finds and is selling off stakes in promising projects piece by piece but retaining a minimum of 30% of the shares in the end.
The Company is diversified not only in metals but also geographically with projects in Canada, Namibia and Newfoundland. The Startrek project in Newfoundland consists of gold-antimony deposits and is currently being developed by joint venture partner BC Ltd. For one of the two projects in Namibia, a joint venture could already be announced. The project is called DorWit and consists of copper and silver. For the second copper-silver project, Okohongo, a partner is currently being sought.
The majority of the projects are located in Ontario, Canada. Four exploration projects have already been completed and are waiting for the right joint venture partner. The joint venture partner Benton Resources is currently developing the Far Lake project. Presently, White Metal Resources is conducting an exploration program on the so-called Tower Stock Gold area, which is 21.34km² in size and can show the first major gold discoveries. Further results are expected in the coming weeks.
The strategy is attractive for investors, as the share price has run up counter-cyclically to gold since the middle of last year. Announced joint ventures have driven the share price. If more partnerships are added or more gold deposits are identified, this holds further potential for the stock.
Newmont - Well-positioned for the years ahead
Newmont is the largest gold producer globally and has weathered the Corona Crisis much better than many other mining producers, some of which lost more than 50% of their share price value. Despite some pandemic mine closures, it produced 5.9 million ounces of gold and set a record for operating cash flow.
A closer look at the annual report reveals that gold reserves remained almost constant at 94.2 million ounces. The war chest is bulging with USD 5.5 billion for acquisitions. GT Gold Corp's acquisition is nearing completion, as GT Gold shareholders approved the acquisition at the May 6 annual meeting. First-quarter 2021 numbers were mixed, as production was down 2% year-on-year, but adjusted earnings rose more than 80% to USD 594 million.
The Company pays a quarterly dividend of USD 0.55 and appears well-positioned for the years ahead. As the gold price has left the consolidation upwards for the first time, Newmont offers investors the opportunity to participate in the rising gold price.
Bitcoin Group - Sideways despite strong growth
With the Bitcoin hype of the last year, the Bitcoin Group share also rose very strongly to over EUR 83. Since December, this has come to an end, and despite new highs for Bitcoin, Bitcoin Group shareholders had to accept price declines of up to EUR 46. Since then, the share has been trading sideways.
According to the Company, Bitcoin Group operates the largest crypto exchange in Europe with 975,000 users on bitcoin.de. The Company takes a 0.5% commission from both buyers and sellers, which is significantly cheaper than competitor Coinbase, and still includes some advantages, such as trading through your own bank account. 98% of Bitcoin stocks are stored offline and external companies regularly audit the IT systems.
One can see the stock's potential from the preliminary results of the annual report for 2020 and the first quarter's figures announced on March 15. Already in 2020, revenues of EUR 15 million have increased significantly compared to 2019. If we take the first quarterly report of this year, the sales for 2021 are already at EUR 8.5 million. Therefore, one can assume a doubling of the revenue for 2021, provided that the crypto market does not collapse sharply. Currently, Ethereum is rushing from one high to the next, so the commission payments will also increase firmly there. The Bitcoin Group price does not reflect all this at the moment.