A Weekly Recap of All Things Resources to Friday, September 20th

‘That’s a Wrap’

By Rod Blake

It’s amazing the difference just one week can make. Who would have predicted that just one week after the major North American equity markets were shaken by a computer-generated flash correction, and these same markets are once again near – or in the case of the TSX Composite – at new all-time highs. Even the lowly TSX Venture Exchange, that in one short week had given up all of its 2024 gains to date, had managed to claw back half of those same gains. Is that it for the correction? Does the market now ride the US Presidential cycle higher into year-end? It might be a little early to be jumping on that bandwagon – but the U.S. election is approaching fast.

With commodities – gold bullion’s 3.45^% or $81 gain last week to a new all-time high of US$2,581 was truly remarkable – and probably the main reason for the TSX Composite to end the week at a new all-time closing high of 23,569, and for the TSX Venture Exchange to gain 6.42^% to 580. Many gold equities ended the week at or near multi-year or even record highs.

The way I see it – While much of the commodity’s attention was focused, and rightfully so, on gold and gold equities – I find it interesting that very little media or investor attention has moved down to silver or silver equities. Gold’s little cousin gained a remarkable 10.07^% to end last week up $2.81 at US$30.72, as it began to play catch up to gold. This is silver’s second run at US$30 this year after first reaching US$32 in June. Gold took a few times to break above US$2,500 to new highs and should silver now hold US$30 and then break above US$32, it will establish a new high going back to early 2013, which to my mind, might bring forth some much overdue attention. One might be wise to investigate some up to now underpriced silver equities.

New Gold Inc. ‘NGD-T’ &’NGD-N.A) continues to uncover amazing riches at the company’s flagship New Afton Mine near Kamloops, BC., that this scribe had the unique opportunity of helping to discover over 50-years ago. This time the Toronto, ON based miner reported that Borehole EA24-510 in the mine’s K-Zone returned 2.83^% copper (Cu) and 1.90 grams per tonne gold (g/t Au) over 84metres (m).

Gold bullion reached a new all-time closing high of US$2,620 a troy ounce (t oz).

Which no doubt helped the closing price of B2Gold Corporation ‘BTO-T’ & ‘BTG-N.A’ to close at a new 1^3/4-year high of $4.54 and Skeena Resources Ltd. ‘SKE-T & N’ to close at a new 2^1/2-year high of $12.30.

Sprott Physical Gold Trust ‘PHYS-T & N’ closed at a new all-time high of $27.56.

Mining can be a dangerous business and as such – Barrick Gold Corp. ‘ABX-T & N’ announced the indefinite closing of the company’s Porgera Gold Mine in Papua New Guinea due to local tribal violence.

Capstone Copper Corp. ‘CS-T’ rose to a new 2-month closing high of $10.04.

Lucara Diamond Corp. ‘LUC-T’ reported the recovery of a remarkable 1,094 carat rough diamond from the Vancouver, BC based company’s Karowe Mine in Botswana.

The closely monitored Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 2-rigs in the past week to 588, down by 42-rigs from this time last year. Across the line – the number of Canadian active rigs fell by 7-rigs to 211, up by 21-rigs from one year ago.  

Lithium companies continued to suffer from lack of investor interest with Century Lithium Corp. ‘LCE-V’ dropping to close at a new 4-year low of $0.22 while Lithium Royalty Corp. ‘LIRC-T’ fell to a new all-time closing low of $5.90.

Lumber stocks finally caught a bid with Weyerhaeuser Company ‘WY-N’ and Canfor Corporation ‘CFP-T closing at respective new 5-month highs of US$33.59 and $16.69, while West Fraser Timber Co. Ltd. reached a new all-time closing high of $129.43.

West Fraser also sighted high fiber costs and soft lumber prices in announcing the indefinite closing of the company’s sawmill in Lake Butler, Florida.

Interest sensitive utilities and pipelines stayed in favour with TransAlta Corporation ‘TA-T’ & ‘TAC-N’ stock closing at a new 1-year high of $13.29 while shares of Enbridge Inc. ‘ENB-T & N’ closed at a new 1^3/4-year high of $54.98.

Uranium equities received some overdue investor interest late in the week after the share price of Constellation Energy Corp. ‘CEG-Q’ surged up by $46.48 or 22.29^% to US$254.98 after the giant American energy company announced the restarting of its Three Mile Island Unit 1 nuclear plant in Pennsylvania and a 20-year power purchase agreement with Microsoft Corporation ‘MSFT-‘N’.

Natural gas and crude oil led commodities higher on the week, while uranium was the only drag.

During the week, the TSX Composite Index, Dow30 Industrials and S&P 500 closed at respective new all-time highs of 23,868 and 42,063 and 5,714.

All of the North American equity markets were positive going into the weekend as investors enjoyed the collective comfort of reducing interest rates.

For the Week – the DJI gained 1.62^% to 42,063, with the S&P 500 up 1.37^% to 5,703 and the NASDAQ ahead 1.49^% to 17,948. In Canada – the TSX rose 1.27^% to 23,868 and the TSX Venture gained 0.86^% to 585. The CBOE Volatility Index or VIX fell 2.48^% to 16.15.

With currencies – the Canadian dollar gained 0.18^% to US$0.7371, while the U.S. dollar ‘DXY’ lost 0.33^% to 100.78. 

With commodities – gold bullion gained 1.51^% to US$2,620, with silver ahead 1.20^% to US$31.09, as copper rose 2.64^% to US$4.27, and lithium gained 0.83^% to US$10,296. Crude oil rose 2.89^% to US$71.23, and natural gas gained 6.09^% to US$2.44, while uranium fell 0.75^% to US$79.45. With soft commodities – lumber rose 2.00^% to US$510. Overall – the CRB Commodities Index gained 3.08^% to 335.