A Weekly Recap of All Things Resources to Friday, July 12th
‘That’s a Wrap’
By Rod Blake
As I observed the markets from afar for a little over a week, two observations caught my attention. The first was obvious in that a handful of Artificial intelligence (AI) stocks continued to pull the S&P 500 and NASDQ Exchanges to new all-time highs. The second and far less noticeable to the mass media was that the TSX venture Exchange was up some 2.81% to 586. Only the AI weighted NASDAQ (+3.5%) had a fared better. Not only that, but the junior bourse is now up some 5.90% so far in 2024 – ahead of the 5.3% gain for the senior TSX Composite and 4.5% year to date gain for the Dow 30. Again – only the AI weighted S&P 500 (+16.7%) and NASDAQ (+22.3%) have greater gains on the year to date.
The way I see it – As a broker I hated summer. Not summer the season, which was usually great. But summer in the junior markets. Historically from early June to Labour Day the TSX Venture suffered from depressed prices on low trading volumes. The Venture often gave back all of its yearly gains in those few months. Sometimes an area play, or strong commodity market would negate the summer doldrums but for the most part the rule of thumb was “Sell in May and Go away”.
This year looks to be different. Having the Venture up in early July says to me that investor interest is returning to the commodity space led by gold silver and copper – three minerals used in computing, electrification and with gold & silver – currencies. We are only midway through summer, and these key commodities could still go south. But should these gains hold, then the traditional fall market rally could be very powerful indeed.
The strength in precious metals spilled over into the new week with –
Kinross Gold Corp. ‘K-T’ & ‘KGC-N’ shares’ rising to a new 31/2-year closing high of $12.55 while New gold Inc. ‘NGD-T & N.A’ stock closed at a new 6-year high of $3.28 and Lundin Gold Inc. ‘LUG-T’ shares’ rose to a new 16-year closing high of $23.46.
Silver stocks also fared well with the share price of Vizsla Silver Corp. ‘VZLA-V’, Endeavour Silver Corp. ‘EDR-T’ & ‘EXK-N’, and Pan American Silver Corp. ‘PAAS-T &N’ all reaching respective 2-year closing highs of $2.02, $6.60 and $24.00.
Meanwhile, the share price of Hecla Mining Co. ‘HL-N’ rose by $0.41 or 7.43% to US$5.93 after the iconic American silver miner pleased the street with its 2nd-quarter production figures.
Unfortunately – Lithium fell to a new 3-year closing low of US$12,445 a tonne (t).
Which no doubt helped the share price of American lithium giant Albemarle Corporation ‘ALB-N’ to fall to a new 4-year closing low of US$90.47, while juniors Patriot Batter Metals Inc. ‘PMET-T’ stock closed at a new 2-year low of $4.69, Century Lithium Corp. ‘LCE-V’ shares’ dropped to a new 4-year closing low of $0.27 and Lithium Americas Corp. ‘LAC-T & N’ stock fell to a new all-time closing low of $3.45.
This as Volkswagen announced it might close the company’s Brussels Audi electric vehicle (EC) production plant due to a sharp drop in demand for high end EVs.
Cuban nickel producer Sherritt International Corp ‘S-T’ saw its stock price fall to a new 31/2-year closing low of $0.25.
This as the price of nickel fell to a new 3-month closing low of US$7.67 a pound.
Lumber also had a bad week falling to close at a new 11/2-year low of US$439 per 1,000 board feet (MBF).
Which encouraged investors to sell Doman Building Materials Group Ltd. ‘DBM-T’ stock down to a new 11/2-year closing low of $6.55 and Canfor Corporation ‘CFP-T’ and Weyerhaeuser Company ‘WY-N’ to close at respective new 4-year lows of $13.59 and US$27.58.
Uranium stocks got a boost on word that Kazakhstan, the world’s largest producer of U3O8, would increase its Mineral Extraction Tax (MET) on yellowcake, currently at 6%, to a sliding scale ranging from 4% to 18% in 2026, based on production.
Strathcona Resources Ltd. ‘SCR-T’ shares’ rose by $1.39 or 4.56% to $31.86 after the Calgary AB based petroleum company announced it would team with Canada Growth Fund (CGF) to develop a $1-billion carbon capture and sequestration infrastructure on Strathcona’s steam-assisted gravity drainage oil sands facilities in Saskatchewan and Alberta.
The industry key Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 1-rig in the past week at 584, down by 91-rigs from this time last year. Up north – the number of Canadian active rigs was up by 14-rigs to 189, up by 2-rigs from one year ago. Â
Teck Resources Ltd. ‘TECK.B-T’ & ‘TECK-N’ shares’ rose by $1.92 or 2.87% to $69.52 after the Vancouver, BC based Canadian mining giant declared a special dividend of $0.50 as it closed the US$7.3-billion sale of the company’s coal assets to Glencore plc ‘GLEN-L’.
And, late in the week, the share price of Filo Corporation ‘FIL-T’ surged up by $1.75 or 6.67% to $27.98 on rumours that the Vancouver, BC based mineral explorer and developer was a takeover target by as yet unknown entities.
The American S&P 500 and NASDAQ Exchanges rose to respective new all-time closing highs of 5,634, and 18,647.
While in Canada – the TSX Composite Index reached a new wall-time closing high of 22,674.
Gold bullion and uranium were higher on the week, while silver and copper were off the most.
All five of the North American exchanges were up on the week.
For the Week – the DJI gained 1.59% to 40,001, and the S&P 500 rose 0.86% to 5,615 while the NASDAQ was up 0.25% to 18,398. In Canada – the TSX gained 2.79% to 22,674 and the TSX Venture rose 1.37% to 594. The CBOE Volatility Index or VIX rose 0.16% to 13.50.
With currencies – the Canadian dollar gained 0.07% to US$0.7335, while the U.S. dollar ‘DXY’ fell 0.75% to 104.08.Â
With commodities – gold bullion gained 0.88% to US$2,412, while silver fell 1.44% to US$30.76, as copper lost 1.50% to US$4.59, and lithium lost 0.87% to US$12,445. Crude oil lost 1.38% to US$82.29, and natural gas fell 0.43% to US$2.32, while uranium gained 0.58% to US$86.15. With soft commodities – lumber was unchanged at US$446. Overall – the CRB Commodities Index fell 0.58% to 341.
And Finally – How much more does it cost to live here in Lotus Land (British Columbia)? On my recent travels from Surrey, BC to Swift Current, SK and back I found the price of regular gasoline was about $1.80 a litre here in the Lower Mainland, then dropping to about $1.70 in the BC interior and $1.55 in Alberta and Saskatchewan. The best gasoline bargain was in the tiny Alberta/Saskatchewan border town of Walsh, AB where a litre of regular gasoline was posted at $1.42.