A Weekly Recap of All Things Resources to Friday, January 26th

‘That’s a Wrap’

By Rod Blake

After being away for week of warm sun and recreation in Palm Springs, it was nice to come back and see the TSX Composite (21,067) near a 2-year high, the NASDAQ (15,426) at a 2^1/2-year high, and the Dow Industrials (38,002) and S&P 500 Index (4,865) at all-time highs. But it was disappointing to see the TSX Venture Exchange (550) still flat 3-weeks into the New Year and only some 40-points above a 3^1/2-year low established this past November.

The way I see it – The TSX Venture Exchange is like the little kid in the playground who is almost always the last pick to become part of the game. The Venture with its overweight of resource issues is currently of little interest to the big investment funds that are focused on Artificial Intelligence (AI) and big cap corporate earnings. Eventually though, every little kid grows up and their skills become more valuable to the other players. And just like the little kid – resources of the will eventually show their true worth to investors and the Venture will once again become an integral part of the North American investment community.

Perhaps it will be uranium that once again attracts investors’ attention to the resource sector, as the price of U3O8 rose by $13.50 in the past week to a new 16-year high of US$106.00 a pound.

All of which helped the Sprott Physical Uranium Fund ‘U.UN-T’ to a new 2^1/2-year closing high of $33.01.

Fission Uranium Corp. ‘FCU-T’ stock rose to a new 8^3/4-year closing high of $1.25 on word the Kelowna, BC based explorer was preparing to commence a 6,000-metre diamond drill program at its PLS high-grade uranium project in Saskatchewan’s Athabasca Basin.

Similarly – Denison Mines Corp. ‘DML-T’ & ‘DNN-N.A” shares’ rose to a new 13-year closing high of $2.80 after the Toronto, ON based miner, along with its joint venture partner Orano Canada Inc., announced the restart of its McLean Lake uranium mine, also in Saskatchewan’s Athabasca Basin.

Also with uranium – NexGen Energy Ltd. ‘NXE-T & N’ and Cameco Corporation ‘CCO-T’ & ‘CCJ-N’ rose to respective new closing highs of $10.53 and $68.51.

Moving forward from uranium production to enrichment – Capital Power Corp. ‘CPX-T’ shares rose by $1.18 or 3.26^% to $37.35 after the ‘ Edmonton, AB based power company announced it has entered into an agreement with Ontario Power Generation to develop and deploy grid-scale small modular nuclear reactors (SMNRs) in strategic locations of Alberta.

Going the other way – the price of lithium continued to languish and fell to a new 2^1/2-year low of US$13,230 a tonne (t).

Which no doubt helped the price of E3 Lithium Ltd. ‘ETL-V’ to fall to a new 1^1/2-year low close of $1.84 and Frontier Lithium Inc. ‘FL-V’ to drop to a new 3-year closing low of $0.68.

The U.S. Energy Information Administration (EIA) projects that solar powered electricity generation will surpass that of natural gas and coal by 2027.

Gold stocks had a mixed week with the price of Eldorado Gold Corp. ‘ELD-T stock rising by $0.74 or 4.55^% to close at $17.00 after the Vancouver, BC based miner impressed the street with its 4^th-quarter gold production.

IAMGOLD Corp. ‘IMG-T’ & ‘ IAG-N’ shares’ rose by $0.47 or 15.11^% to $3.58 as the Toronto, ON based miner reported the start-up procedures of its key Côté Gold Project northwest of Sudbury, Ontario were on track for production this March.

Meanwhile – Barrick Gold Corp. ‘ABX-T & N’ shares’ fell by $2.61 or 11.05^% to close at $21.02 after the Toronto, ON based miner failed to impress investors with its 4^th-quarter production and 2024 guidance.

And the shareholders of B2Gold Corp. ‘BTO-T’ & ‘BTG-N’ watched their investment plunge lower by $0.42 or 10.45^% to close at a near 5-year low of $3.60 after the Vancouver, BC based miner projected a higher than expected cost of production for 2024.

Yukon mineral explorer Snowline Gold Corp. ‘SGD-V’ continued to release diamond drill gold assays that I have to read twice to confirm. This time the Vancouver, BC based company announced Hole V-23-070 returned 382.4 metres averaging 2.12 grams per tonne (g/t) gold from its flagship Rogue Project Valley target.

Impact Silver Corp. ‘IPT-V’ stock rose by $0.01 or 8.82^% to $0.185 after the Vancouver, BC based miner reported encouraging diamond drill hole zinc/lead assays from the company’s recently acquired Plomosas zinc/lead mine in northern Mexico.

Trans Mountain Corporation received pipeline variance approval for a portion of its expansion through the Fraser Valley and announced the long overdue and over budget ($30.9-billion) pipeline expansion will begin filling in February and will start operating up to its designed 890,000 barrels per day (bbl/d) capacity in the second quarter of this year.

Petroleum prices might get a little tight across British Columbia’s Lower Mainland and Vancouver Island for the next month as Parkland Corporation ‘PKI-T’ had to shut down its Burnaby refinery in order to deal with leak and odor issues.

Gran Tierra Energy Inc. ‘GTE-T& N.A’ shares’ rose by $0.23 or 4.66^% to $5.17 after the Calgary, AB based petroleum producer offered positive production guidance for 2024.

Sighting air pollution, security of supply and economic concerns – the Biden administration unexpectedly cancelled any new U.S. liquefied natural gas (LNG) production applications.

The key Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs rose by 1-rig in the past week to 621, down by 150 rigs from this time last year. Across the line – the number of Canadian active rigs increased by 7-rigs to 230, down by 17-rigs from one year ago.

Copper stocks caught a bit of a bid with the price of HudBay Minerals Inc. ‘HBM-T&N’ rising to a new 6-month closing high of $7.61 and Ivanhoe Mines Ltd. ‘IVN-T’ closing at an all-time high of $14.91.

West Fraser Timber Co. ‘WFG-T&N’ announced that due to a lack in supply of economically viable fibre, the Vancouver, BC based forestry giant would permanently close its Fraser Lake sawmill in central British Columbia that currently employs 175 people.

During the week – the TSX closed at a near 2-year high of 21,125, the NASDAQ closed a new 2^1/2-year high of 15,511 and the Dow 30 and S&P 500 rose to new respective all-time closing highs of 38,109 and 4,894.

Natural gas and crude led commodities higher on the week, while gold bullion was the only drag.

The CRB Commodities Index rose to a new 2-month high of 314.

The markets were mixed to end the week with many investors flattening long positions or taking profits ahead of an uncertain weekend.

For the Week – the DJI gained 0.62^% to 38,109 with the S&P 500 up 1.12^% to 4,891 and the NASDAQ ahead by 1.10^% to 15.455. Up north – the TSX gained 1.04^% to 21,125 while the TSX Venture fell 0.18^% to 551. The CBOE Volatility Index or VIX dropped 0.30^% to 13.26.

With currencies – the Canadian dollar fell by 0.12^% to US$0.7436 and the U.S. dollar ‘DXY’ gained 0.24^% to 103.48. 

With commodities – gold bullion lost 0.54^% to US$2,018, as silver rose 0.84^% to US$22.80, and copper gained 1.58^% to US$3.85, while lithium gained 0.17^% to US$13,286. Crude oil gained 6.61^% to US$78.09, and natural gas rose 10.71^% to US$2.79, while uranium was unchanged at US$106.00. With soft commodities – lumber rose 5.11^% to US$556. Overall – the CRB Commodities Index rose by 3.29^% to 314.

One Last Thought – It seems that Ottawa’s interest payments are going up just like those of the average debtor as Statistics Canada reports that the federal government’s 3^rd-quarter 2023 interest payments on its debt rose by over 37^% from the same quarter a year ago to $11.3-billion.