A Weekly Recap of All Things Resources to Friday, June 17th
‘That’s a Wrap’
By Rod Blake
As the brokers, investors, traders, portfolio managers fired up their terminals Monday morning, many could not be faulted for renewing their screen saver image to a ‘kitchen sink’ as it seemed that was the only thing that wasn’t thrown that at them during the previous Friday’s selloff.
Gold Standard Ventures Corp. ‘GSV-T&N’ shares rose by $0.055 or 11.34% to $0.54 when the 100% owner and developer of the prized South Railroad Gold Project in Nevada agreed to be taken over by intermediate gold producer Orla Mining Ltd. ‘OLA-T’ & ‘ORLA-N’ in a friendly cash & stock deal valued at some C$242-million.
BP P.L.C. ‘BP-N’ becomes the latest multination petroleum firm to leave the Alberta oil sands as the company agreed to sell its 50% interest in the Sunrise oil sands project to operating partner Cenovus Energy Inc. ‘CVE-T&N’ in a cash and off-shore acreage swap deal of some $1.2-billion.
U.S. based Uranium Energy Corp. ‘UEC-N’ announced it will acquire Canada’s UEX Corporation ‘UEX-T’ in an all-stock deal that valued each UEX share at a 50% upside of C$0.43.
The International Energy Agency or IEA warned that global crude oil supply may not keep up with next year’s projected worldwide demand of 101.6-million bbls/day due to a resurgence in the Chinese economy and lost production due to the full force of Russian sanctions.
Canadian Natural Resources Minister Jonathan Wilkinson signaled Ottawa will take firmer control of the country’s critical minerals stating – “Canada needs to ensure that it is protecting itself in an area that is clearly strategic, and ensuring that those supply chains will be robust for our allies.”
The way I see it – A large part of current high gasoline prices may not be just from a lack of crude oil production but rather – a lack of refining capacity. As noted recently by Chevron Corp. ‘CVX-N’ CEO Mike Worth – “We haven’t had a refinery built in the United States since the 1970s. My personal view is there will never be another new refinery built in the U.S. You’re looking at committing capital 10-years out, that will need decades to offer a return to shareholders, in a policy environment where governments around the world are saying: we don’t want these products.”
Marathon Gold Corp. ‘MOZ-T’ made a significant step towards production after the Newfoundland & Labrador based gold developer secured a US$81-million letter of credit from Caterpillar Financial Services to supply mobile mining equipment to the company’s Valentine Gold Project in central Newfoundland.
Currency, bond, equity and commodity markets rigorously rebalanced after the U.S. Fed aggressively raised its key short-term interest rate by a 28-year high 0.75% to a range of 1.5% – 1.75% and signaled that more big moves were still to come, with Fed Chair Jerome Powell stating – “We thought a strong action was warranted at this meeting, and today we delivered it.”ÂÂ
The closely followed Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs rose by 7 rigs to 740, an increase of 270 over the year. North of 49 – the number of active Canadian rigs rose by 15 to 156 for an increase of 39 in the past year.
For the Week – The DJI fell by 4.79% to 29,889 as the S&P 500 dropped 5.79% to 3,675 and the NASDAQ lost 4.78% to 10,798. In Canada – the TSX was off by 6.63% to 18,930 and the TSX Venture lost 9.22% to 640.
Gold bullion lost 1.66% to US$1,840, while silver fell by 1.01% to US$21.66 and copper lost 6.53% to US$4.01. Elsewhere – crude oil  dropped by 8.62% to US$110.14  while natural gas cratered by 19.70% to US$7.01. The Canadian dollar fell by 1.90% to US$0.7675. Overall – the CRB Commodities Index was lower by 4.90% to 330.
And Finally – It seems that history can be erased as The Daily Telegraph recently reported that Beijing has ordered Hong Kong schools to delete any references or teachings that the city was once a colony of Britain.
Good luck in the week ahead….