CHINA keeps buying GOLD! Barrick Mining, Desert Gold and First Majestic Silver in focus

China continues to drive the gold price

While the gold price slips below USD 4,000 per ounce, data show that China remains a key driver. In September, China bought 23 tonnes of gold. This is the largest monthly purchase since October 2023. At 63 tonnes, the third quarter was the strongest since the third quarter of 2023. Demand also remained high among retail investors. Chinese gold ETFs recorded inflows totalling 22 tonnes in August and September. The figures show that demand from China continues to be supported by government and private gold purchases. This points to continued robust investment demand and provides important support for the gold price. This article is disseminated in partnership with Apaton Finance GmbH. It is intended to inform investors and should not be taken as a recommendation or financial advice.

Barrick Mining: When will the IPO take place?

Barrick Mining is considered a core investment in the gold sector. The Canadian mining group is one of the industry’s heavyweights. Investors are therefore likely to be eagerly awaiting the next quarterly results, due to be published on November 9, 2026. The focus will be particularly on how strongly the high gold price has affected revenue, profit and cash flow. Investors are also likely to expect an update on the planned IPO of the North American gold operations. Barrick intends to float a minority stake of an expected 10% to 15% in the new company while retaining control itself. The IPO is intended to help make the value of the North American gold operations more visible in the capital market. It is currently known that there are delays. Group CEO Mark Hill stated at the end of September that the IPO, originally scheduled for the end of 2026, could potentially be postponed through January 2027. The reason, he said, was outstanding formalities. Barrick has since resolved a major point of contention. In August, the group reached an agreement with its joint venture partner Newmont on a restructuring of the Nevada Gold Mines joint venture. Newmont expressly approved the planned IPO as part of this.

Desert Gold: CEO provides interesting insights

Among gold explorers, Desert Gold Ventures is currently arguably one of the most interesting stories. At the International Investment Forum (IIF), CEO Jared Scharf recently explained where the company stands in its transition to becoming a producer. The focus is on the SMSZ project in western Mali. There, Desert Gold holds a contiguous licence area of more than 440 km² with a gold resource of around 1.3 million ounces. The project is located in one of West Africa’s most important gold regions. Barrick, B2Gold and Allied Gold are also active there. Scharf sees considerable exploration potential. Numerous mineralised structures have so far only been partially explored. In the medium term, he considers an expansion of the resource to more than 2 million ounces very likely. In the long term, he believes the area could even host more than 5 million ounces. In the short term, Desert Gold is focusing on starting production in the Barani East section. The equipment for the small gravity processing plant is already on site, and the foundations are complete. Commissioning is due to begin this month. Commercial production with a processing capacity of 200 tonnes of ore per day is to be achieved by the end of the first quarter of 2027. The company then plans a gradual expansion to 1,200 tonnes per day. In the long term, Scharf is aiming for large-scale production of up to 5 million tonnes of ore per year within five years. In parallel, a drilling programme covering an initial 20,000 m is due to start in January to expand existing gold deposits and develop new resources. The preliminary economic assessment (PEA) to date accounts for less than 10% of the existing resources. In addition, Desert Gold is focusing on the Tiegba project in Côte d’Ivoire. The area, covering around 300 km², lies in a promising gold belt near Allied Gold’s existing Bonikro and Agbaou mines. Of particular interest is a gold anomaly already identified by Newcrest, extending approximately 5 km in length and 2 km in width. It has not yet been investigated by drilling. Desert Gold initially intends to use shallow drilling to test whether the historical exploration results can be confirmed. Scharf sees good prospects for a new gold discovery. Given the proximity to existing mines, an economically significant deposit could also be of interest to neighbouring producers. This gives Desert Gold a second project with development potential in its own right alongside the imminent start of production. GBC Research sees major opportunities in the combination of the start of production and further exploration potential. The analysts therefore recommend Desert Gold shares a Buy. The price target is CAD 0.93 (EUR 0.59). The shares are currently trading at EUR 0.08.

First Majestic Silver: A buying opportunity amid weakness?

Silver investors currently need strong nerves. No one has been talking about the January high of over USD 100 for a long time. After the price of the precious metal temporarily rose above USD 67 per troy ounce in September, it has recently fallen sharply. In October alone, silver fell around 18% and traded around USD 49 at the end of the month. This is also weighing on First Majestic Silver shares. The Canadian silver producer is considered a core industry investment. The shares lost around 19% in October and are now trading at USD 14.26. Recent operational performance has been mixed. In the third quarter, silver production fell by 11% year on year to around 3.44 million ounces. The main reason was labour disputes at the San Dimas mine. Performance was significantly better at La Encantada, where silver production rose by 68%. There was also positive news from Mexico. First Majestic and the government have agreed in principle on a framework to resolve their long-running tax dispute. The arbitration proceedings have been suspended for now. The group has also extended its share buyback programme. Investors are now looking ahead eagerly to November 5 when First Majestic plans to present its full quarterly results. The focus is likely to be on whether the high realised precious metal prices were able to offset weaker production.

Conclusion

The gold price is under pressure. However, data from China show that an important demand driver remains intact. Barrick remains a core holding in the sector. As it makes the leap from explorer to producer, Desert Gold is an interesting portfolio addition. GBC analysts see scope for significantly higher share prices. Buying shares in First Majestic Silver does not look compelling at present.

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