Close menu




November 11th, 2021 | 13:58 CET

Yamana Gold, Tembo Gold, First Majestic Silver - Three top opportunities in mining shares

  • Gold
Photo credits: pixabay.com

In recent months, the erratic ups and downs of the gold price have left their mark on the shares of gold explorers and producers. However, it has to be said that large caps have weathered the phase much better than small and micro caps. The moderate company valuations of these three companies offer opportunities.

time to read: 4 minutes | Author: Carsten Mainitz
ISIN: YAMANA GOLD INC. | CA98462Y1007 , TEMBO GOLD CORP. | CA87974N4057 , FIRST MAJESTIC SILVER | CA32076V1031

Table of contents:


    Yamana Gold - Price unjustifiably low

    The share of the Canadian precious metal producer Yamana Gold is one of the papers that currently puzzle. Thus, with the publication of the Q3 figures a few days ago, the Company announced a sales increase of 8% compared to the corresponding quarter of the previous year. A profit of USD 0.03 per share was generated, adjusted even USD 0.07. Shareholders were promised a dividend of USD 0.03 for the fourth quarter.

    In addition, the Company expects that Q4 will break the sound barrier of annual production of 1 million ounces of gold equivalent. The Company cites the Canadian Malartic gold project in Province Québec, which has an existing resource estimate of approximately 1.9 million ounces of gold at a grade of 2.56 g/t on a proven and probable basis, as the main driver. Of course, last year's weaker numbers due to COVID-19 also represent a low benchmark. Still, Yamana will nevertheless succeed in taking an important step by crossing the threshold to becoming a million-dollar producer.

    And yet, the market is not reacting as one would expect. On the contrary, after the announcement of the figures, the share price initially took a downward turn. In the meantime, however, investors seem to have changed their minds, and the share price has recently risen. Analysts also expect a low P/E ratio of just 11 for 2022. What is also not on the minds of many is the 56.25% share in the Argentine MARA copper and gold project that Yamana is currently developing with Newmont (25%) and Glencore (18.75%). Experts believe that the MARA project alone has an NPV of over USD 4 billion, of which Yamana accounts for USD 2.5 billion. The mine is expected to go into production in 2026 and have a mine life of 26 years. Estimates suggest reserves of 11.7 billion pounds of copper, 7 million ounces of gold and 100 million ounces of silver.

    Tembo Gold - Ready for a promising fresh start

    For gold producers to produce, they first need appropriate locations for their mines. Although finding mine sites is becoming more and more professionalized, the topic of mine exploration is mainly dealt with by smaller "soldiers of fortune" who hope for a big discovery to then sell their project to a large gold producer. One of these exploration companies is Tembo Gold, which also sails under the Canadian flag. Based in Vancouver, Tembo Gold's focus is on African gold projects, specifically Tanzania.

    This specialization has been a problem for Tembo Gold in recent years. Because the Tanzanian government had no interest in mining for some time, it resulted in an enforced pause of no less than seven years for Tembo Gold. After a change of government, however, the traffic light in the mining sector is now green again. Since then, investments in the mining sector have suddenly increased by 725%. And Tembo Gold did not take long to announce an extensive drilling campaign in its property in the Lake Victoria goldfield, which has grown to 174 sq km and is located in the immediate vicinity of the Bulyanhulu (Barrick Gold) and Geita (AngloGold Ashanti) mine sites.

    The CAD 2.3 million capital increase required for financing has already been completed. Artificial intelligence has been used to identify 57 potential targets as part of the drilling program, targeting 7,000m. Since these announcements, the Company's share price has leaped upwards and is currently trading just below its five-year high. Nevertheless, the Company is moderately valued with a market capitalization of around CAD 27 million.

    First Majestic Silver - Sales stop of silver stocks

    Already when announcing the production figures for the third quarter a few weeks ago, First Majestic Silver announced that it had decided not to put about 1.4 million ounces of silver on sale because of the low price level but to store them in anticipation of rising prices. Now, the effects were also reflected in the financial figures. Thus, sales decreased by 1% to CAD 124.6 million. At an average silver price of CAD 23.10 per ounce of silver in the quarter, a sale of inventory would have given the Company CAD 33.2 million in additional revenue. In addition, costs (AISC) at the Jerrit Canyon gold project increased due to the construction of a new lift station.

    The inclusion of the project also caused capital expenditures to increase to CAD 14.09 per silver equivalent ounce. Overall, this resulted in a net loss of CAD 18.4 million for the quarter. Adjusted, this corresponds to CAD 0.07 per share. Nevertheless, there was a cash flow of CAD 0.09 per share. The Company then announced the payment of a quarterly dividend in the form of a cash dividend of CAD 0.0049 per share, which was affected by the quarterly loss. Still, it holds out the prospect of a higher dividend for the subsequent quarters if the inventory of silver is sold off.


    Indeed, not all that glitters is gold. However, the stocks presented should be among the winners in the event of a gold price increase. Those who want to play it safe here should stick with heavyweights Yamana and First Majestic. However, the explorer Tembo Gold is attractive for those willing to take more risk for a higher return.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on news.financial. These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.

    The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.


    Der Autor

    Carsten Mainitz

    The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.

    About the author



    Related comments:

    Commented by Fabian Lorenz on May 12th, 2022 | 11:12 CEST

    BioNTech, BYD and Desert Gold: Shares for the rebound

    • Gold
    • Electromobility
    • Biotechnology

    Is the rebound coming? After the heavy price losses of recent days and weeks, the market seems ripe for a countermovement. However, this would require a little more volume in the market. But then, especially companies that have not disappointed operationally should profit. BioNTech, for example, belongs to this group. The Company has published convincing figures, and analysts see up to 50% price potential. BYD's share price should also pick up speed again. Finally, the rapid shift to electric pureplay seems to be succeeding and HSBC has raised the price target. Gold was not a safe haven in the current correction. But it is worth looking at bombed-out stocks here as well. Desert Gold Ventures is one of them. The explorer has started a new drill program and secured financing.

    Read

    Commented by Armin Schulz on May 6th, 2022 | 10:43 CEST

    Barrick Gold, Edgemont Gold, Rio Tinto - Are gold stocks taking off again?

    • Gold

    With the start of the Ukraine crisis, the gold price skyrocketed, but since March 8, we find ourselves in a consolidation. The 200-day line is currently holding, and it could go up again from here. But let's look at the reasons for the weakness in the gold price. On the one hand, there is the strong dollar, which naturally puts pressure on the gold price, and on the other hand, bond yields in the US are climbing again. After the FED announced on May 4 that it would not raise interest rates by more than 0.5 percentage points, which was originally feared, the gold price jumped again. Demand for physical gold remains high. We look at three companies in the gold sector.

    Read

    Commented by Stefan Feulner on May 5th, 2022 | 10:46 CEST

    Rheinmetall, Triumph Gold, K+S - Hype or sustainable?

    • Gold
    • fertilizer
    • Defense

    Already during the Corona pandemic, clear winners and losers could be identified. Vaccine manufacturers multiplied, and companies related to online trading also performed better than the market. In the current Ukraine crisis, however, the signs are changing. Suddenly, defense stocks, which were frowned upon a short time ago, are all the rage. Fertilizer companies, benefiting from the sanctions and the resulting supply shortages, are also gaining favor with investors. But how sustainable are the current increases? Gold mining stocks are also doing very well, but in contrast to Rheinmetall, Hensoldt & Co., they are performing much weaker.

    Read