13. May 2021 | 07:50 CET
Yamana Gold, Goldseek Resources, Bitcoin Group - Small stocks, big profits?
With inflation on the rise and the threat of financial repression growing, what to do? The price of gold has been recovering for weeks, and Bitcoin and other cryptocurrencies are also holding remarkably steady. The reason: the market is already pricing in possible risks in the future. But the recent price rises could be just the beginning. We outline possible investment ideas around gold and cryptocurrencies.
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ISIN: CA98462Y1007 , CA38150J1066 , DE000A1TNV91
"[...] The processes in Namibia are predictable and the country itself is very safe. [...]" Heye Daun, President and CEO, Osino Resources Corp.
Yamana Gold: Strong ESG profile, but risks remain
Yamana Gold's stock has jumped more than 6% in the past five days alone. Yamana sees itself as a precious metals producer with a share of silver and copper. With about 87%, gold plays the most prominent role nevertheless. In addition to existing mines, Yamana is also advancing projects independently; for example, the Wasamac project is currently being examined for its economic feasibility. In addition, there are exploration projects at an earlier stage. Yamana Gold is committed to operating in a very sustainable manner, which is in line with the spirit of the times. Starting in 2024, annual production is to increase, and at an even later date, significant copper production is to be added.
Such plans for the future are often viewed with skepticism by the market, as shown by the share price performance last year: the share price fell by more than 10%. Mostly, when projects are in the late stages of development or existing mines are to be expanded, problems often arise for smaller and medium-sized mine operators: landslides, strikes, or water ingress have put many an ambitious plan on hold in the past. While Yamana's clear ESG profile is suitable for reducing such risks, the truth in mining is underground. The stock is benefiting from rising precious metals prices and also has fantasy around silver and copper. However, the stock will not be a high-flyer.
Goldseek Resources: 4 million shares with clear growth strategy
Investors will find a completely different situation with Goldseek Resources. Here, it is not a question of when the next mine will be built, but instead, using exploration measures to develop projects at an early stage as effectively as possible. To this end, Goldseek holds several properties in attractive gold mining regions. Examples are Hemlo, where Barrick Gold is already active; the Detour Gold Trend, where Wallbridge Mining is active; and Urban Barry, where Bonterra Resources is active in addition to Osisko Mining. Goldseek Resources has assembled an experienced team to achieve its goals and imposed strict budgetary discipline on itself. To minimize share dilution in the wake of corporate actions, Goldseek Resources puts every spare dollar into actual work on its properties. To support this approach, the Company has disclosed parts of its costing. Monthly costs excluding exploration are meager at USD 19,000.
As recently as February, Goldseek had CAD 2.8 million in cash on hand and is debt-free to date. With the Company planning to put 80% of its budget into exploration for the next two years, speculative investors can see an exciting growth story in the stock. If drilling on just one project shows significant deposits, any of Goldseek's projects could immediately appeal to potential buyers. While companies like Yamana Gold are mining commodities, making profits, but simultaneously facing the harsh realities of everyday mining, small developers like Goldseek Resources are all about the one big discovery. In the early stages of exploration work, companies often have the most significant opportunities for growth. Goldseek Resources has several of these growth opportunities in its portfolio with its projects, and with a market capitalization of only CAD 4 million, it is incredibly cheap. It goes without saying, the share is a hot potato and is not suitable as a supporting pillar in a pension plan.
Bitcoin Group: Where is the bottom?
Anyone who invested in Bitcoin on a grand scale ten years ago is likely to be worrying about anything these days - except retirement planning. Those who missed the boat might consider Bitcoin Group stock in light of rising inflation rates and the price fireworks in the crypto market. The Company offers services around blockchain and cryptocurrencies and has its trading place on offer with Bitcoin.de. In addition, it has its banking license. The interlocking of classic financial transactions and cryptocurrencies is a huge growth market. Above all, blockchain technology is suitable for making securitizations even faster, more secure and more transparent. Thus, tangible assets can be brought onto the blockchain and traded by many market participants. 100 investors for a bottle of expensive wine is not a problem thanks to this technology.
The Blockchain Group share has been weakening for months despite the positive outlook. Within the last three months, the share price fell by almost 30%. In the meantime, a short-term downward trend has even established itself. The value could find significant support around EUR 44, below which further trouble threatens. Investors have various opportunities around cryptocurrencies and precious metals. While the consolidation of established companies offers the chance to enter, finding the right timing as an investor is always tricky. Timing is more straightforward with very cheap companies. If the speculation works out here, it can happen very quickly. Goldseek Resources is, therefore, a real alternative for all investors who can assess risks and adjust position sizes to their wealth concept.