A Weekly Recap of All Things Resources to Friday, December 1st
‘That’s a Wrap’
By Rod Blake
On reviewing last Friday’s U.S. Thanksgiving long weekend market quiet market closes – three things gave me some optimism. One was that the extended bull run in the price of uranium and uranium stocks has, for the most part, still gone unnoticed by the media. Second was that the TSX Venture (up 0.19%) had managed to hang on to the previous week’s 4% gains. And the third was that silver (up 2.49%) outperformed gold (up 1.11%) for a second consecutive week.
The way I see it – There is a saying in the brokerage community that – “Bull markets start on page 15 and end on page one”. This goes back to the era where newspapers were the primary source of information, but the premise remains the same today. I’ve mentioned in previous columns how bull markets usually start quietly and proceed almost unnoticed until well into their cycle. If this is the case, then this mostly media unnoticed bull run in uranium and uranium equities still has a long way to go. I would say that in terms of media coverage the uranium story is still on about page 10. Today, the page one story being artificial intelligence and the magnificent seven companies that make up the brunt of that sector. As for new bull markets – The TSX Venture is up two weeks in a row and only a month away from its traditional 1st-quarter rally. It looks like most of tax loss selling may be done. If this is so, and the bottom (507) is set, then the pending 1st-quarter rally could be greater than many would expect. Watch for silver to continue to outperform gold over the next few months. If this trend continues – we could be in for a precious metals’ bull market not seen in many years.
Last week’s price action in silver spilled over to the new week as the price of the poor man’s gold rose to a new 61/2-month closing high of US$25.48 a troy ounce (t oz).
All of which helped the price of Fortuna Silver Mines Inc. ‘FVI-T’ & ‘FSM-N’ shares’ to rise to a new 6-month closing high of $5.45.
Meanwhile gold bullion rose to a new 12/3–year high close of US$2,072 a t oz.
Which helped the price of Kinross Gold Corp. ‘K-T’ & ‘KGC-N’ stock reach a new 2-year closing high of $8.02 and Eldorado Gold Corp. ‘ELD-T’ to reach a new 3-year closing high of $18.24.
Minera Alamos Inc. ‘MAI-V’ shares’ surged up by $0.07 or 21.38% to $0.39 after the Vancouver, BC based junior gold miner impressed investors with the company’s 3rd-quarter financial and operating results.
And the price of White Gold Corp. ‘WGO-V’ stock rocketed up by $0.08 or 30.77% to $0.34 after the Toronto, ON based mineral explorer announced a fully committed $5.1-million financing to help advance the company’s White Gold District projects in Yukon.
Baytex Energy Corp. ‘BTE-T’ reported selling certain of the Calgary, AB based company’s ‘Viking’ assets to a yet undisclosed buyer for $153.8 million. The assets represent only 4,000 barrels of oil equivalent per day (boe/d) of the company’s total production of 155,000 boe/d, with the proceeds going to pay down corporate debt.
Suncor Energy Inc. ‘SU-T & N’ announced the Calgary, AB based energy giant, along with minority partners, has restarted the floating Terra Nova Production, Storage and Offloading platform off the coast of Newfoundland and Labrador.
And TC Energy Corp. ‘TRP-T & N’ reported their Coastal GasLink pipeline, that will carry natural gas from Northwest Alberta and Northeast British Columbia to LNG Canada’s liqufied natural gas (LNG) facility near Kitimat, BC, is mechanically complete, ahead of the Calgary, Alberta company’s deadline. Coastal GasLink is the first pipeline to the west Coast of Canada in over 70-years.
This as the price of natural gas dropped to a new 3-month closing low of US$2.78 per million British Thermal Units (MMBtu).
The key Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs rose by 3-rigs over the past week to 625, down by 159 rigs from this time last year. In Canada – the number of active rigs fell by 5-rigs to 192, downby 3-rigs from one year ago.
Tesla Inc. ‘TSLA-N’ announced the first deliveries of the company’s long awaited Cybertruck electric (EV) pick-up truck.
Meanwhile, the share price of Lion Electric Co. ‘LEV-T & N’ fell by $0.08 or 3.52% to $2.19 after the Montreal, PQ based medium and heavy-duty electric vehicle (EV) manufacturer announced the layoff of 150 or about 10% of the company’s workers in an effort to stabilize its cost structure.
This as the price of lithium fell to a new 21/3-year low of US$16,592 a tonne.
Which no doubt helped to pull the price of Standard Lithium Ltd. ‘SLI-T & N.A’ stock down to a new 3-year closing low of $2.99.
Northern Dynasty Minerals Ltd. ‘NDM-T’ & ‘NAK-‘ stock fell by $0.05 or 9.43% to $0.48 after the U.S. Army Corps of Engineers (USACE) further extended the deadline to comment on the viability of the Vancouver, BC based mineral developer’s Pebble Copper/Gold Project in Southwest Alaska.
And the price of First Quantum Minerals Ltd. ‘FM-T’ sank by another $2.22 or 16.53% to close at $11.11 after the Supreme Court of Justice in Panama ruled that the previously approved Law 406 that extended the life of the Toronto, ON based Cobre Panama Copper Mine in that Central American country – was unconstitutional.
The price of uranium rose to a new 16-year high of US$81.00 a pound.
The US Dollar Index ‘DXY’ fell to a new 31/2-month low of 102.74.
Gold and silver were the commodities that had the best gains on the week, while lithium and lumber were down the most.
The major North American markets enjoyed a good November and first day of December with the TSX venture Exchange rising to a new 2-month closing high of 546 while the TSX Composite closed at a 21/2-month high of 20,453. The American markets did much better with the S&P 500, NASDAQ and Dow 30 all rising to new respective 2-year closing highs of 4,595, 14,305 and 36,246.
For the Week – the DJI gained 2.42% to 36,246 with the S&P 500 up 0.79% to 4,595 and the NASDAQ ahead by 0.38% to 14,305. Across the line – the TSX gained 1.74% to 20,453 and the TSX Venture rose 2.63% to 546. The CBOE Volatility Index or VIX rose 0.56% to 12.63.
With currencies – the Canadian dollar gained 0.97% to US$0.7407 while the U.S. dollar ‘DXY’ fell 0.17% to 103.22.
With commodities – gold bullion gained 3.45% to US$2,072, as silver rose 4.81% to US$25.48, and copper gained 3.17% to US$3.91, while lithium lost 8.89% to US$16,635. Crude oil lost 1.48% to US$74.07 and natural gas dropped 3.14% to US$2.78, while uranium gained 0.93% to US$81.00. With soft commodities – lumber lost 4.15% to US$526. Overall – the CRB Commodities Index lost 1.56% to 308.
One Last Thought – I’ve said this before, but due to recent events it is worth repeating. Mining is a dangerous profession. Just this week 41-tunnel workers were freed after being trapped for 17-days in a tunnel they were working on in northern India. (Tunnelling is mining). Also this week, eleven miners in South Africa were killed after their mine elevator or cage suddenly dropped 200-metres. If the workers who perished were fire fighters, police or military, they would be given a state like funerals. But miners – not so much.