A Weekly Recap of All Things Resources to Friday, January 20th
‘That’s a Wrap’
By Rod Blake
The new trading week began quietly with the American exchanges closed Monday for Martin Luther King Day. Meanwhile, resource investors were feeling pretty pumped after two consecutive weeks of remarkable gains in that sector.
The way I see it – There’s a classic 1989 Richard Dreyfuss movie called ‘Let it Ride’ about a down and out gambler (Jay Trotter) whose life changes dramatically for the better when he wins a number of horse races in a row. Similarly, the TSX Venture Exchange – the best barometer of the resource sector – has just started 2023 with two complete weeks of gains and has broken above a 3-month long resistance level of 600. Could North America’s poorest performing exchange put a few more weekly gains together and rise above the next resistance level of 700 or even approach last year’s high of 950? The first 3-months of the year are traditionally very kind the resource market and by extension should be good for the lowly Venture Exchange. Should this scenario play out – just like Jay Trotter – TSX Venture investors may feel dramatically better about the value of their portfolios.
The TSX Venture Exchange rose to a new 3-month high of 624.
Eldorado Gold Corp. ‘ELD-T’ shares’ fell by $0.23 or 1.90% to $11.86 after the mid-tier gold producer’s 2022 gold posted gold production of 453,916 ounces fell short of the Vancouver, BC based company’s guidance of 460,000 – 490,000 ounces.
Conversely, IAMGOLD Corporation ‘IMG-T’ & ‘IAG-N’ announced the Toronto, ON based company produced a better than expected 713,000 ounces of gold last year.
The price of Wesdome Gold Mines Ltd. ‘WDO-T’ stock dropped by $1.30 or 16.73% to $6.47 after the Toronto, ON based gold miner reported 2022 production numbers and worse yet – 2023 guidance that fell well below the markets’ expectations.
This as gold bullion rose to a new 9-momth high of US$1,933-an-ounce.
And silver climbed to a new 9-month high of US$24.30-an-ounce.
The Canadian Federal Government approved the construction of Brisbane, Australia’ based Allkem Ltd. ‘AKE-T & A’ Galaxy Lithium mine in the James Bay area of northern Quebec which is projected to supply an average of 5,400 tonnes per day of lithium ore over the next 15 – 20 years.
Meanwhile – as he toured the Vital Metals’ rare earth elements processing plant in Saskatoon, SK, Canada’s Prime Minister Justin Trudeau stated – “The world will look to Canada to step up its production of rare earth elements and bolster supply chains.”
American Lithium Corp. ‘LI-V’ & ‘AMLI-Q’ shares’ rose by $0.31 or 7.73% to $4.32 after the Vancouver, BC based mineral developer released an updated Mineral Resource Estimate (MRE) which highlighted a 64% increase in the measured & indicated resource estimate of lithium carbonate equivalent material for the company’s Tonopah Lithium Claims project in Nevada.
This as lithium fell to a new 5-month low of US$70,412-a-tonne.
While copper climbed to a new 7-month high of US$4.25-a-pound.
Birchcliff Energy Ltd. ‘BIR-T’ shares’ gained $0.28 or 3.22% to $8.97 after the Calgary, AB based petroleum company announced a tenfold increase in its quarterly dividend from $0.02 to $0.20-per-share and also issued a production growth guidance of 10% over the next 5-years.
All of this as natural gas fell to a new 11/2-year low of US$3.13/1,000 btus.
While the International Energy Agency (IEA) forecast that – due to lifting of Chinese Covid restrictions – global oil demand will rise by 1.9-million barrels of oil per day (mb/d) in 2023 to a record 101.7-mb/d.
The key Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 4-rigs in the past week to 771, up by 167 from this time last year. In Canada – the number of active rigs rose by 14-rigs to 241, an increase of 29 in the past year.
The price of Fission Uranium Corp. ‘FCU-T’ stock rose by $0.06 or 7.3% to $0.88 after the Kelowna, BC based company’s released the results of the feasibility study on its flagship Patterson Lake South uranium project in Saskatchewan’s Athabasca Basin that included among other things – a 42% increase in mine life to 10-years to go along with an after tax internal rate of return (IRR) of 27.2% and an operating cost of just $13.02-per-pound of uranium.
The price of lumber fell to a new 21/2-year low of US$339-per-1,000 board feet.
The U.S Dollar Index or ‘DXY’ dropped to a new 8-month low of 102.01.
For the Week – the DJI lost 2.71% to 33,375 and the S&P 500 fell by 0.65% to 3,973 while the NASDAQ gained 0.55% to 11,140. Across the line – the TSX rose by 0.70% to 20,503 and the TSX Venture gained 1.46% to 624. The CBOE Volatility Index or VIX was up by 2.72% to 19.85.
With currencies – the Canadian dollar improved 0.07% to US$0.7466 as the U.S. dollar ‘DXY’ fell by 0.19% to 102.01.
With commodities – gold bullion lost 0.36% to US$1,913 with silver off by 1.40% to US$23.92, while copper rose by 0.95% to US$4.25, and lithium lost 2.00% to US$70,412. Crude rose by 2.23% to US$81.64 while natural gas fell by 10.32% to US$3.13 and uranium lost 5.19% to US$48.80. Meanwhile, lumber gained 20.39% to US$431. Overall – the CRB Commodities Index rose by 1.00% to 303.
And Finally – Canadian workers must have a lot of confidence in their abilities and futures as a recent poll by recruitment firm Robert Half found that 50% of respondents planned to search for new jobs in the next 6-months – well up from the 28% who thought the same way just one year ago.