‘That’s a Wrap’
by Rod Blake
As investors settled in for the second week and first full week of trading for 2023, they felt somewhat optimistic in that overall – the previous week to start the year had been positive.
The way I see it – Stock markets – especially junior markets – have a number of unique mini-cycles throughout the year that we brokers labeled ‘Sell in May and Go Away’, ‘The Summer Doldrums’, ‘Tax Loss Season’ and Santa Claus Rally. The current mini-cycle is ‘The January Effect’. Many believe that January tends to be one of the market’s best performing times of the year. There are a number of reasons for this such as fresh money coming back into the market, rising resource prices and a general investor optimism to start the year. Of interest for resource investors is that small cap resource stocks tend to outperform the overall market during this time.
The price of Copper Mountain Mining Corp. ‘CMMC-T’ shares’ rose by $0.40 or 22.10% to $2.21 after the Vancouver, BC miner reported a full restart of operations at the company’s copper operation near Princeton, BC following last month’s ransomware attack.
Petroleum giant country Saudi Arabia extended its footprint further into new energy minerals as its crown owned mining company Ma’aden signed a 50/50 joint venture with Barrick Gold Corp. ‘ABX-T’ & ‘GOLD-N’ to explore for copper in the oil rich country. In addition, Ma’aden took a US$126.4-million or 9.9% interest in Ivanhoe Electric Inc. ‘IE-T & N” along with a 50/50 joint venture to also explore for copper.
All of this as copper rose to a new 7-month high of US$4.21-a-pound.
While lithium fell to a 5-month low of US$71,848-per tonne.
And the Noranda Income Fund ‘NIF.UN-T’ units soared up by $0.42 or 42.86% to $1.40 on word the Salaberry-de-Valleyfield, Quebec zinc processer was being acquired by Canadian Electrolytic Zinc Ltd. in an all-cash deal of some C$53.2-millon or $1.42/unit.
Meanwhile, the price of Lundin Gold Inc. ‘LUG-T & Q’ stock increased by $0.74 or 5.23% to $14.89 after the Vancouver, BC based miner announced its Fruta del Norte gold mine in southeast Equador produced a record 121,139 ounces of gold in the 4th-quarter.
While sister company Lundin Mining Corp. ‘LUN-T’ & ‘LUMI-Q’ shares’ feel by $0.58 or 5.90% to $9.25 after the Toronto, Ontario miner issued 2022 production figures and projected 2023 production guidance that fell short of analysts’ expectations.
Gold bullion rose to a new 9-month high of US$1,920-an-ounce.
And silver climbed to a new 9-month high of US$24.26-an-ounce.
As the US Dollar Index or ‘VIX’ fell to a new 7-month low of 102.20.
Which helped to spark the downtrodden TSX Venture Exchange to finally show some strength and rise above previous resistance at 600 to a new 3-month high of 615.
West Fraser Timber Co. ‘WFG-T & N’ sighted softening lumber markets along with high fibre costs as reasons for announcing the Vancouver, BC based forest giant would cut its lumber production by 100-million board feet by indefinitely closing its Perry Sawmill in Florida.
Meanwhile – Vancouver based Interfor Corporation ‘IFP-T’ also announced a 100-million board feet or 8% cut in lumber production for the first quarter of this year.
And Canfor Corporation ‘T-CFP’ said the company will permanently close the pulp line of its Prince George, BC pulp & paper mill in March due to a lack of raw materials to adequately feed the mill.
All of this as Lumber dropped to a new 21/2-year low of US$348-per-1,000-board feet.
Algonquin Power & Utilities Corp. ‘AQN-T & N’ stock fell by $1.02 or 10.25% to $8.93 after the Oakville, ON power and renewable energy company announced a 40% cut in its quarterly dividend to just $0.1085-per-share.
Calgary, AB based Tourmaline Oil Corp. ‘TOU-T’ joined an ever-growing list of petroleum companies to offer greater returns to shareholders – this time Canada’s largest natural gas producer issued a special dividend of $2.00/share.
Natural gas fell to new 11-month low of US$3.49-per-1,000- btus.
The influential Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs rose by 3-rigs in the past week to 775, up by 174 from this time last year. Up north – the number of Canadian active rigs rose by 38-rigs to 227, an increase of 36 in the past year.
For the Week – the DJI rose by 2.00% to 34,303 as the S&P 500 rose by 2.67% to 3,999 and the NASDAQ gained 4.83% to 11,079. In Canada – the TSX rose by 2.75% to 20,360 and the TSX Venture gained 5.67% to 615. The CBOE Volatility Index or VIX fell by 13.16% to 18.35.
With currencies – the Canadian dollar gained 0.31% to US$0.7461 as the U.S. dollar ‘DXY’ fell by 1.64% to 102.20.
With commodities – gold bullion gained 2.84% to US$1,920 with silver up by 1.80% to US$24.26, as copper rose by 7.40% to US$4.21, while lithium lost 5.57% to US$71,848. Crude rose by 8.26% to US$79.86 while natural gas fell by 6.68% to US$3.49, and uranium gained 3.18% to US$50.35. Meanwhile, lumber gained 2.29% to US$358. Overall – the CRB Commodities Index rose by 4.90% to 300.
And Finally – A mini underwater gold rush may be in the making in the Salish Sea off the northwest coast of Washington State after scavengers say they have found the wreck of the side paddle wheeler S.S. Pacific that sank in early November, 1875 off the northwest tip of the Olympic Peninsula carrying passengers, cargo and among other things – about 4,000 ounces of gold from the Cassiar Gold Rush in northern British Columbia.