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‘That’s a Wrap’

By Rod Blake

As the North American investors, traders and portfolio managers settled in for a shortened week following the Canadian Family Day and American President’s Day long weekends, most were somewhat confused and frustrated in that the long anticipated 2023 bull market was not playing out as per many pundits’ predictions.

The way I see it – In the early 20th century economist John Maynard Keynes was quoted as saying – “When my information changes, I alter my conclusions. What do you do, sir?” For investors, this means one has to be prepared to adjust one’s investment plan in the wake of unexpected events. At the end of 2022 investors piled into the market banking on economic suggestions that interest rates were soon to be topping and inflation was easing. Now, more recent data suggests this process may take longer than anticipated. Time will tell, but those expecting a large gains based on the former might be wise to heed Mr. Keynes’ timely intuition.

Teck Resources Ltd. ‘TECK.B-T’ & TECK-N’ confirmed that Canada’s largest mining company will spin off its steel making coal division into as standalone public entity Elk Valley Resources Ltd. while the remaining company will carry on as Teck Metals Corp.

Teck also announced that over the next 6-years the company will convert all of its multiple vote Class A common shares (100-votes per share) to single vote Class B shares (1-vote per share) in a move that will effectively relinquish control of the company from the founding Keevil family after all these years.

Sigma Lithium Corporation ‘SGML-V & Q’ shares’ surged up by $6.55 or 16.44% to $46.39 on reports that electric vehicle (EV) pioneer Tesla Inc. ‘TSLA-N’ was considering acquiring the Vancouver, BC based mineral explorer/developer and its flagship Grota do Cirilo Lithium Project in Brazil.

Shareholders of junior explorer/developer Vision Lithium Inc. ‘VLI-V’ saw their investment rise by $0.01 or 7.14% to $0.15 after the Val-Dor, QC based company released a Preliminary Economic Assessment (PEA) on its Sirmac #5 Lithium Dike Deposit that showed an extraordinary internal rate of return (IRR) of 839% and investment payback of less than 1-year

Lithium Americas Corp. ‘LAC-T & N’ reported receiving the key Letter of Substantial Completion from the U.S. Department of Energy (DOE) Loans Programs Office which, on final approval, should supply funding of up to 75% of the capital costs for construction of the company’s flagship Thacker Pass Lithium Project in Nevada.

Lithium Royalties Corp. announced the Toronto, ON based financier of lithium projects intends to go public by raising $150-million by way of an initial public offering or IPO through the members of the Toronto Stock Exchange.

This as lithium falls to a new 1-year low of US$55,371 per tonne.

Chesapeake Energy Corp. ‘CHK-Q’ announced the sale a further 172,000 net acres of its Eagle Ford Shale assets including approximately 2,300 wells to INEOS Energy in an all-cash deal of some US$1.4-billion.

The shareholders of Trican Well Services Ltd. ‘TCW-T’ were pleased to see their investment rise by $0.18 or 5.81% to $3.28 after the Calgary, AB based petroleum field service company reported a better-than-expected 4th-quarter report and more importantly – reinstated a quarterly dividend policy with an initial payment of $0.04 per share.

TransAlta Renewables ‘RNW-T stock dropped by $0.32 or 2.65% to $11.41 after the Calgary, AB based company’s 4th quarter report failed to meet the street’s expectations.

Meg Energy Corp. MEG-T’ announced the Calgary, AB based petroleum company has been informed by Trans Mountain Pipeline to expect to begin filling oil in the new TMX pipeline later this year and that the line to Vancouver, BC will be fully operational early in 2024.

The city of Montreal’s Sustainability Commission – sighting health and carbon emission concerns – follows the lead of California and recommends the phasing out of natural gas as a cooking and heating source for the city’s buildings…”as soon as possible.”

The key Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 7-rigs over the past week to 753, up by 103 from this time last year. Across the line – the number of Canadian active rigs fell by 4-rigs to 244, an increase of 20 in the past year.

This as the price of natural gas fell to a new 11/2-year low of US$2.07 per 1,000btus.

Equinox Gold Corp. ‘EQX-T & N’ shares’ rose by $0.17 or 3.56% to $4.95 after the Vancouver, BC based miner produced a record 150,439 ounces of gold in the 4th-quarter.

This as the price of gold dropped to a new 2-month low of US$1,811 an ounce.

And the US dollar ‘DXY’ rose to a new 2-month high of 105.23.

First Quantum Minerals Ltd. ‘FM-T’ continued its game of wits with the Panamanian Government by shutting down the company’s ore processing operations at the company’s Cobre Panamá mine.

Taseko Mines Ltd. ‘TKO-T’ & ‘TGB-N’ agreed to spend $60-million to purchase an additional 12.5% of the Gibraltar Copper Mine near Williams Lake, BC – giving the Vancouver, BC based mining company 87.5% control over the province’s second largest copper operation.

For the Week – the DJI lost 2.99% to 32,817 with the S&P 500 down 2.67% to 3,970 and the NASDAQ off by 3.33% to 11,395. In Canada – the TSX fell 1.44% to 20,219 while the TSX Venture lost 1.75% to 617. The CBOE Volatility Index or VIX rose by 8.40% to 21.67.

With currencies – the Canadian dollar lost 0.97% to US$0.7350 and the U.S. dollar ‘DXY’ rose by 1.31% to 105.23.

With commodities gold bullion lost 1.74% to US$1,811, as silver lost 4.64% to US$20.74, while copper fell 4.35% to US$3.96, and lithium dropped 18.02to US$56,371. Crude oil gained 0.08% to US$76.45 as natural gas gained 12.72% to US$2.57, while uranium lost 0.19% to US$51.70 . With soft commodities – lumber gained 0.79% to US$384. Overall – the CRB Commodities Index was down by 1.02% to 292.

And Finally – It might be time for the Canadian Government to refocus its immigration policy – not in its goal of 500,000-a-year in expected immigrants – but in the intent on these immigrants to embrace Canada. Case in point – recent Statistics Canada figures show that in the past 10-years only 47.7% of immigrants have become Canadian citizens – well down from the 75.1% who became citizens in the 10-year period to 2021.

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