‘That’s a Wrap’
By Rod Blake
Gold bugs began the week wondering what else could possibly go wrong for them as after a mostly disappointing 2022 they had enthusiastically watched their precious metal climb steadily from its November low of US$1,632-an-ounce to a new 9-month high of US$1,951 – and hopefully on to US$2,000 – only to see it tumble $86 in only next 2-days to end last week back at US$1,865.
The way I see it – My stepfather, Martin Gibbeson, was a prominent financier/promoter back in the heydays of the Vancouver Stock Exchange ‘VSE’ during the 1970s – 1980s and ran the markets for numerous junior mining company stocks. Many times, after observing him work a stock up over a series of days, weeks or months he would suddenly start to sell the same issue to quickly force a price lower. When asked why? – he would say it was time to ‘Shake the Tree’ in that too many short-term traders were piling onto the stock and clipping it for an easy ride up. By shaking the tree, he would scare out these late traders and give the company’s long-term investors an opportunity to purchase healthy positions which also helped to form a new base for the stock. And yes – while times are different now and the gold market is much more sophisticated than a junior VSE resource stock – we might have just witnessed the shaking of the tree for the gold market. Marty would be smiling…
Newcrest Mining Ltd. ‘NCM-T & A’ shareholders began the week by watching their investment surge up by $2.88 or 14.32% to $22.99 after the Australian miner received an A$27.16/sh all stock takeover offer from Denver, CO based Newmont Corporation ‘NEM-N’ & ‘NGT-T’ which, if completed, would form a massive mining entity producing over 10-million gold equivalent ounces (GEO) per year.
The price of First Quantum Minerals Ltd. ‘FM-T’ stock fell by $2.25 or 8.06% to $25.65 after the Toronto, ON based miner reported a suspension of concentrate loadings at the Cobre Panamá port, Punta Rincón due to concerns over the calibration of the facility’s weigh scales.
Vancouver, BC based Finning International Inc. ‘FTT-T’ – a great barometer of the health of the resource industry – reported the Caterpillar distributor’s 4th-quarter 2022 net revenue increased by 34% year over year (y/y) to $2.4-billion and a earnings increased by 37% y/y to $0.89 per share.
Lithium Americas Corp. ‘LAC-T & N’ shares’ rose by $3.12 or 9.89% to $34.68 after the U.S. Federal Court of Appeal ruled in favour of the company’s plan to develop its Thacker Pass lithium project in Nevada.
Century Lithium Corp. ‘LCE-V’ teamed up with Koch Technology Solutions to engage Koch’s Li-ProTM direct lithium extraction process into Century’s lithium extraction facility in Amargosa Valley, Nevada.
This as the price of lithium fell to a new 8-month low of US$69,236/tonne.
West Fraser Timber Co. Ltd. ‘WFG-T & N’ announced the one month closing of its Cariboo Pulp & Paper mill in Quesnel, BC.
Alberta’s ATB Financial reported that – thanks to a 12% increase in conventional oil production and a 2% increase in oil sands output – the province’s petroleum industry produced a record 3.73-million barrels of oil per day in 2022 – nearly double what the land locked province produced in 2010.
Calgary, AB based oil & gas service provider Precision Drilling Corp. ‘PD-T’ reported 2022 revenue increased by 64% over the previous year to $1.617,194.
The price of crude oil surged up by over $1.65 a barrel late in the week after Russia played ‘Tit for Tat’ and cut its crude oil production by 500,000 barrels per day in response to western sanctions.
The key Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs rose by 2-rigs in the past week to 761, up by 126 from this time last year. In Canada – the number of active rigs increased by 1-rig to 250, an increase of 31 in the past year.
Cameco Corporation ‘CCO-T’ & ‘CCJ-N’ stating – “Demand for nuclear power, supported by growth across the near, medium and long term, is driving the best fundamentals we have ever seen for the nuclear fuel market.” saw its stock rise by $1.68 or 4.57% to $38.44 after the free world’s largest uranium producer reported 4th-quarter financials that handily beat analysts’ expectations.
Meanwhile NexGen Energy Ltd. ‘NXE-T & N’ announced the commencement of the 2023 exploration program across the company’s extensive uranium holdings in the southwest Athabasca Basin region of Saskatchewan.
For the Week – the DJI lost 0.17% to 33,869 with the S&P 500 down 1.11% to 4,090 and the NASDAQ off by 2.41% to 11,718. Up north – the TSX fell 0.70% to 20,612 and the TSX Venture lost 1.13% to 613. The CBOE Volatility Index or VIX rose by 11.78% to 20.49.
With currencies – the Canadian dollar gained 0.50% to US$0.7493 and the U.S. dollar ‘DXY’ improved by 0.63% to 103.57.
With commodities – gold bullion lost 0.05% to US$1,864, as silver lost 5.66% to US$22.02, with copper dropping 0.99% to US$4.02, and lithium down 0.27% to US$69,236. Crude oil rose by 8.68% to US$79.76 as natural gas gained 7.11% to US$2.56 while uranium fell by 1.37% to US$50.50. With soft commodities – lumber dropped 15.60% to US$422. Overall – the CRB Commodities Index gained 1.72% to 295.
And Finally – While we’re seeing more and more electric vehicles (EVs) on our roads, the trend would still seem to be in its infancy as according to data company Sustainalytics – the size of the global EV market is projected to grow from the current US$287 billion to an amazing US$1.3 trillion in 2028.