A Weekly Recap of All Things Resources to Friday, July 19th

‘That’s a Wrap’

By Rod Blake

As the brokers, investors, portfolio managers wound up their week last Friday, July 12^th they held a mutual satisfaction that their accounts all looked pretty good in that the four major North American markets ended the week at or near all-time highs. Better still; the markets seemed to be broadening out to areas other the high-flying artificial intelligence (AI) sector that had dominated the big cap sector for almost a year now.

The way I see it – I set my sights a bit lower and in a narrower focus than most investors. That is, while I have some big cap holdings, my first love, and what I tend to follow the closest, is resource stocks and in particular junior resource issues. That means a more watchful eye on the TSX Venture Exchange. And while nowhere near a record high, the North American markets’ little cousin has done remarkably well over the last few weeks, rising over 5^% to Friday’s close of 594, and seemingly on track to once again breach that psychologically key level of 600. The Venture looks poised to make it as the price of gold bullion, (the dominate mineral of Venture Exchange companies), at US$2,412, is only a few short dollars below its all-time closing high 0f US$2,426 set in late May. A look at a Venture chart going back to last November reveals a very strong pattern of higher highs and higher lows. July through September tends to be good for gold, and should the yellow metal break and hold above US$2,426 I have no doubt that the Venture will trade above its May high of 623. My sights may be set lower for now, but I think pretty soon they’ll be aiming higher.

As if on cue – gold bullion begins the week by rising to a new all-time closing high of US$2,468 a troy ounce (t oz).

Which put a fire under the gold sector with Newmont Corporation ‘NEM-N’ closing at a new 14-month high of US$48.32, while B2Gold Corp. ‘BTO-T’ & ‘BTG-N.A’ reached a new 1^1/2-year closing high of $4.28, Kinross Gold Corp. ‘K-T’ & ‘KGC-N’ closed a new 4-year high of $12.75, and Eldorado Gold Corp. ‘ELD-T’ and ‘EGO-N- rising to a new 7-year closing high of $23.36.

Barrick Gold Corp. ‘ABX-T’ & ‘GOLD-N’ shares’ rose by $1.20 or 4.78^% to $26.32 after the giant miner pleased the street with its 2^nd-quarter financial and production figures, but more importantly – issued an improving guidance for the rest of the year.

The stock price of 03 Mining Inc. ‘OIII-V’ rose by $0.04 or 2.24 ^% to $1.37 after the Toronto, ON based explorer released encouraging drill hole gold assays from the company’s Malartic H deposit near Val-d’Or, Quebec.

Silver equities also caught some optimistic investor attention with Hecla Mining Co. ‘HL-N’ reaching a new 14-month closing high of US$6.30, while Endeavour Silver Corp. ‘EDR-T’ & ‘EXK-N’ and Vizsla Silver Corp. ‘VZLA-V’ closed at respective new 2-year highs of $6.80 and $2.10.

This as the U.S dollar index or ‘DXY’ fell to a new 4-month closing low of 103.68.

I missed this last week but it’s worth noting – Montreal, Quebec based electric recreation vehicle (ERV) maker Taiga Motors Corp. ‘TAIG-T’ filed for Creditor Protection.

Meanwhile – General Motors Co. ‘GM-N’ adjusted its previous target of producing 1-million North American electric vehicles (EVs) a year by 2025 to a “flexible” forecast due to waning EV demand.

Similarly – Ford Motor Co. ‘F-N’ said the giant auto company would delay producing EVs at its Oakville, ON assembly plant until 2027 and instead will build profitable F-Series Super Duty pick-up trucks.

This as the price of lithium fell to close at a new 3-year low of US$11,738 a tonne (t).

Nickel fell to close at a new 3^1/2-month low of US$7.42 a pound.

Which definitely helped the stock price of Cuban nickel producer Sherritt International Corp. ‘S-T’ to close at a new 3^3/4-year low of $0.235.

Stelco Holdings Inc. ‘STLC-T’ shares’ rose by $27.64 or 73.98^% to $65.00 after the Hamilton, ON based integrated steelmaker agreed to be taken over by American steelmaker Cleveland-Cliffs Inc. ‘CLF-N’ in a cash & stock deal valued at some C$3.4-billion.

The forest sector continued to be under pressure with the price of lumber dropping to a new 4-year low of US$419 per 1,000 board feet (MBF).

Which no doubt helped investors to drive the price of Western Forest Products Inc. ‘WEF-T’ stock down to a new 13^1/2-year closing low of $0.435.

Arizona Sonoran Copper Co. Inc. ‘ASCU-T’ updated the Mineral Resource Estimate (MRE) of the company’s Cactus Brownfield Copper Project south of Phoenix, AZ, which included a 26^% increase in leachable measured and indicated inventory.

This as the price of copper fell to a new 3^1/2-month closing low of US$4.24 a pound.

Fission Uranium Corp. ‘FCU-T’ announced that all of the last thirteen drill holes of the company’s current program on the R1515W zone of the company’s PLS property in Saskatchewan’s Athabasca Basin hit wide intervals of uranium mineralization.

North American propane compressed natural gas and renewable energy company; Superior Plus Corporation ‘SPB-T’ saw its share price drop to a new 4-year closing low of $8.08.

The closely followed Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs rose by 2-rigs in the past week at 586, down by 83-rigs from this time last year. Across the line – the number of Canadian active rigs was up by 8-rigs to 197, up by 10-rigs from one year ago.  

This as the closing price of natural gas fell to a new 3-month low of US$2.04 per 1,000 British thermal units (MBtu).

Which encouraged shareholders of Pine Cliff Energy Ltd. ‘PNE-T’ to sell the stock down to a new 16-month closing low of $0.91.

The CBOE Volatility Index or VIX rose to a new 3-month closing high of 16.52.

The American S&P 500 and Dow 30 rose to respective new all-time closing highs of 5,667, 41,198.

While in Canada – the TSX Composite Index reached a new all-time closing high of 22,995.

Lumber was the only commodity higher on the week, while natural gas and lithium were off the most.

The four major North American markets were negative going into the weekend while the TSX Venture Exchange entered the weekend mildly positive.

For the Week – the DJI gained 0.72^% to 40,288, while the S&P 500 fell 1.96^% to 5,505 and the NASDAQ was off 3.65^% to 17,727. Up north – the TSX gained 0.07^% to 22,690 and the TSX Venture lost 2.36^% to 580. The CBOE Volatility Index or VIX rose 32.16^% to 16.52.

With currencies – the Canadian dollar lost 0.071^% to US$0.7283, while the U.S. dollar ‘DXY’ gained 0.29^% to 104.38. 

With commodities – gold bullion lost 0.70^% to US$2,395, while silver fell 5.01^% to US$29.22, as copper lost 0.76^% to US$4.24, and lithium lost 5.68^% to US$11,738. Crude oil lost 2.69^% to US$80.08, while natural gas fell 8.62^% to US$2.12, and uranium dropped 1.68^% to US$84.70. With soft commodities – lumber rose 12.33^% to US$501. Overall – the CRB Commodities Index fell 1.47^% to 336.

One Last Thought – If you are wondering where your tax money is going – look no further than the federal government as the Treasury Board of Canada reports the federal public service added 10,535 new employees last year to a record 367,772workers. Canada’s public service has increased by 42^% since the Trudeau government was elected in 2015.