13. April 2021 | 12:29 CET
Yamana Gold, Goldseek Resources, First Majestic: Bet on gold & silver now!
Constantly tapping into the price of gold & silver seems to be a fashion. One gets the oppressive feeling that there is an endless letters page in the exchange-traded precious metals as an observer. However, this is only partly true. In paper or derivative form, there are a great many issuers who bring gold and silver to market in the form of margin deposits, entitlements or debentures. Physical metal is traded only on futures exchanges in the form of futures, these must be delivered at some point, but usually, the maturing contracts are rolled on. If you believe the outlets selling physical gold and silver, this market has been empty for years because larger quantities cannot be ordered.
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ISIN: CA98462Y1007 , CA38150J1066 , CA32076V1031
"[...] Our projects are at the initial, high reward exploration stage. [...]" Humphrey Hale, CEO, Managing Geologist, Carnavale Resources Ltd.
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.
Yamana Gold - Projects are going well
A mid-tier producer is Toronto-based Yamana Gold, with a high-quality, diversified portfolio of gold and silver producing properties, including some development-stage properties. All projects are located in mining-friendly jurisdictions throughout the Americas, Canada, Brazil, Chile and Argentina. Production output is expected to increase in gold from about 780,000 ounces to just under 900,000 ounces. While in silver, the Group expects a decline of about 10% from 10.4 million ounces in 2020.
Yamana plans to achieve additional consistent growth in volumes produced based on sustained expansion and optimization initiatives at its existing mines by developing new mines, advancing its exploration properties and exploring acquisition opportunities focused in North and South America.
Yamana Gold Inc recently reassessed its two major projects and provided a technical update on Canada and Chile. In Canada, Yamana owns the Malartic mine in Quebec, while in Chile, it operates the El Penon mine in the Antofagasta region. The reports now enable management to announce a 10-year strategic production forecast for the Company. Since its last technical update three years ago, El Penon has gone from strength to strength, with mineral reserves at the facility increasing 21% to 921,000 ounces of gold since the end of 2017. Silver resources increased by almost a quarter to 29.2 million ounces over the said period. Malartic is also doing well, having produced four million ounces of gold since 2014. Yaman's shares are stable in the market and, at a price of EUR 3.8, are about 33% below their 2020 high.
Goldseek Resources - Not far from larger producers
Far away from large production volumes, the Canadian Goldseek Resources lies in wait. It has acquired its properties in the vicinity of major producers and will take advantage of opportunities depending on the metals' price development. In doing so, the Company uses the majors' preliminary work and invests in nearby claims with excellent framework factors.
In order to arrive at a valuation of the ores in the ground, exploration will be initiated in due course, with the management keeping a strict eye on costs. More than 80% of the funds are to flow into the resource development, with only a scant 20% remaining for administration. If a good drilling result is achieved, the Company can approach the producers directly and conclude purchase agreements.
Currently, Goldseek Resources owns five promising projects, four of them in the gold stronghold Quebec and one property in Ontario. Names like Hemlo Gold or Barrick Gold are well-sounding neighbors. One of the claims is also close to Wallbridge Mining in the Detour Gold Trend.
The stock, which was recently listed in Frankfurt, is trading at about CAD 0.24 in Canada. Jon Deluce, President and Chief Executive Officer of Goldseek, recently stated that the current consolidation of the gold price is in its final phase. We also believe in this scenario. European investors still have the opportunity to be in early, as the capitalization is still below CAD 10 million.
First Majestic - Share price at a standstill
Despite good full-year numbers and a promising resource update, First Majestic shares are stuck. At the beginning of the year, Robin Hood investors had briefly pushed the share price above EUR 21, but now the share is bobbing along between EUR 14 and EUR 15 as sales continue to fall.
The fundamental figures of the Group are excellent. After all, the balance sheet total of over CAD 1.3 billion carries 67% equity with a debt of CAD 450 million. Earnings per share have also returned to positive territory in 2020; what is missing now is an improving silver price. Unfortunately, this has also suffered from the constant selling pressure on gold. It has been bobbing for some time between USD 23.5 and USD 25.5 but is currently at a weak USD 24.8.
Evidently, the crypto world is now also playing a role. Because rising prices in Bitcoin & Co often lead to price discounts in gold and silver. We will continue to keep the First Majestic share in focus and stand at the ready when the precious metals turn around.