A Weekly Recap of All Things Resources to Friday, April 5th
‘That’s a Wrap’
By Rod Blake
As the brokers, investors, portfolio managers and traders closed their terminals ahead of the Easter long weekend, there was a feeling of some satisfaction that the four major North American markets had now advanced for almost two consecutive quarters going back to the lows of last October. The TSX is up some 18%, the S&P 500 up 28%, the Dow 30 up 23%, and the NASDAQ up 30%. And after a false start and resulting pullback earlier in March – even the small cap TSX Venture Exchange is up about 9% from its November low.
The way I see it – while all of the markets are up over the past five+ months, there is one distinct difference in that – while the four major markets are all at or near all-time highs, the lowly TSX Venture is just up 9% from a four year low. From a risk reward basis – in which market is now the best place to be? Can the majors keep pushing to new highs or is it easier for the Venture to continue to build from an oversold position. A year ago, the four major markets, led by artificial intelligence (IA) issues clearly started to outperform their junior cousin. But now, with gold at a record high, crude oil rising, uranium holding near its high, copper in demand, lithium coming off a bottom – the Venture is once again attracting some attention. This renewed interest is also seen through trading volumes that are now testing 37-million shares a day as opposed to the lows of 23-million a day just one month ago. If this trend continues, look for the Venture to once again take out and then hold the recent high of 575 set early in March. From there, if the stars align – a march towards 600 is possible. Perhaps, after many years of underperformance – the TSX Venture Exchange might finally be the place to be.
IAMGOLD Corporation ‘ IMG-T’ & ‘IAG-N’ shares’ rose by $0.42 or 9.29% to a new 41/2-year closing high of $4.94 after the Toronto, ON based miner reported the first gold pour from the company’s Côté Gold Mine southwest of Timmons, Ontario. IANGOLD expects Côté to produce about 220,000 – 290,000 ounces of gold per year (ozAu/y).
Gold bullion rose to a new all-time closing high of US$2,327 a troy ounce (t oz).
Which no doubt helped to propel Kinross Gold Corp. ‘ K-T’ & ‘KGC-N’ up to a new 21/3-year closing high of $8.71, Agnico-Eagle Mines Ltd. ‘AEM-T & N’ to close at a new 3-year high of $84.27 and Eldorado Gold Corp. ‘ELD-T’ & ‘EGO-N’ to reach a new all-time closing high of $20.53.
Silver finally caught a bid and rose to a new 3-year closing high of US$27.43 a troy ounce (t oz).
And IMPACT Silver Corp. ‘IPT-V’ rose to a new 1-year closing high of $0.34 while Hecla Mining Co. ‘HL-N’ closed at a new 9-month high of US$5.53.
Ballard Power Systems Inc. ‘BLDP-T & Q’ stock rose by $0.68 or 18.04% to $4.45 after the Vancouver, BC based alternate energy company reported that Poland’s Solaris Bus & Coach had ordered a record 1,000 of Ballard’s fuel cell engines to be deployed in Solaris’ European buses through 2027.
Trans Mountain Corporation reported that the construction related challenges in British Columbia’s Fraser Valley have been resolved and the 590,000 barrel per day (bbl/d) pipeline expansion will go into commercial service on May 1st.
Meanwhile, Pembina Pipeline Corp. ‘PPL-T’ & ‘PBA-N’ announced a 20-year long-term agreement with Calgary, AB based ARC Resources Ltd. ‘ARC-T’ where ARC will supply 200 million cubic feet per day (MMcf/d) of natural gas to Pembina and Haisla Nation’s proposed US$3.4-billion floating Cedar liquefied natural gas (LNG) Project to be constructed near Kitimat, BC .
This as crude oil continued its march higher and rose to a new 6-month closing high of US$86.71 a barrel (bbl).
Which helped Canadian oil giants Imperial Oil Ltd. ‘IMO-T & N’ and Canadian Natural Resources Ltd. ‘CNQ-T & N’ to reach new respective all-time closing highs of $99.04 and $110.32.
This as the closely followed Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 1-rig in the past week to 620, down by 131-rigs from this time last year. Across the line – the number of Canadian active rigs fell by 15-rigs to 136, up by 9-rigs from one year ago. Â
Rising crude prices are also good for uranium issues and Fission Uranium Corp. ‘FCU-T’ stock rose by $0.13 or 13.40% to $1.10 when the Vancouver, BC based mineral developer announced more geotechnical diamond drilling to commence at the company’s flagship PLS high-grade uranium project in Saskatchewan’s Athabasca region.
Following suit – fellow uranium developers Denison Mines Corp. ‘DML-T’ & ‘DNN-N.A’ rose to a new 13-year closing high of $3.00, and NexGen Energy Ltd. ‘NXE-T & N’ shares’ rose to a new all-time closing high of $11.91.
Copper issues continued to attract investor interest with the price of Hudbay Minerals Inc. ‘HBM-T & N’ closing at a new 2-year high of $10.01 and Taseko Mines Ltd. ‘TKO-T’ & ‘TGB-N’ to reach a new 11-year closing high of $3.30 and Capstone Copper Corp. ‘CS-T’ to close at a new all-time high of $8.99.
Junior copper issues also got some long overdue interest with the price of Kodiak Copper Corp. ‘KDK-V’ reaching a new 4-month closing high of $0.74.
This as the price of copper rose to a new 2-year high of US$4.24 a pound (pd).
Lithium issues also caught a bid with Century Lithium Corp. ‘LCE-V’ stock rising to a new 9-month closing high of $0.91 and Lithium Americas Corp. ‘LAC-T & N’ closing at a new 16-mongh high of $9.60.
Going the other way – Tiaga Motors Corp. ‘TAIG-T’ stock plunged down by $0.34 or 53.12% to $0.30 after the Montreal, PQ based electric off-road vehicle manufacturer issued 4th-quarter and full year 2023 financials that were well below the street’s expectations and worse yet – announced a temporary curtailment of vehicle production due to an overstock of inventories.
Shell plc ‘SHEL-Q’ announced the energy giant would close 1,000 of the company’s 40,000 gas stations worldwide in the next two years and add 15,000 new electric vehicle (EV) chargers to its network of more than 55,000 chargers.
Perhaps fully electric vehicles (EV) are not the only way to the future as Ford Motor Company ‘F-N’ announced the Dearborn, MI based company’s 1st-quarter hybrid electric vehicle (HEV) sales rose by 42% to 38,421 units.
The CRB Commodities Index rose to close at a new 2-year high of 343.
The CBOE Volatility Index or ‘VIX’ rose to a new 5-month closing high of 16.35.
Silver and copper were the commodities that improved the most on the week, while lumber was the only drag.
The Canadian markets outperformed their southern neighbours with the TSX Venture Exchange rising to a new 6-month closing high of 585 while the TSX composite Index rose to a new all-time closing high of 22,264.
The TSX Composite and Venture Exchange were positive at the end of the week, while the three major American markets were negative.
For the Week – the DJI lost 2.27% to 38,904, as the S&P 500 fell 0.95% to 5,204, and the NASDAQ dropped 0.80% to 16,248. In Canada – the TSX gained 0.44% to 22,264 and the TSX Venture rose 3.73% to 584. The CBOE Volatility Index or VIX gained 23.21% to 16.03.
With currencies – the Canadian dollar lost 0.33% to US$0.7358, and the U.S. dollar ‘DXY’ fell 0.26% to 104.29.
With commodities – gold bullion gained 4.82% to US$2,327, as silver rose 10.34% to US$27.43, while copper improved by 5.74% US$4.24 and lithium gained 2.07% to US$15,109. Crude oil gained 4.18% to US$86.45, as natural gas rose 1.71% to US$1.78, and uranium gained 4.12% to US$88.50. With soft commodities – lumber fell 2.56% to US$571. Overall – the CRB Commodities Index gained 3.31% to 343.
One Last Thought – As the artificial intelligence (IA) induced “Buy the Index” bull market seems to be correcting – investors might want to be reminded of the benefits of a diversified portfolio. One of the primary benefits of diversification is risk reduction. By spreading investments across different assets, sectors or geographic regions, investors can mitigate the impact of adverse events in their portfolio.