A Weekly Recap of All Things Resources to Friday, July 15th

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‘That’s a Wrap’

By Rod Blake

As professional and amateur investors alike settled in for the first full trading week of the second half of the year, they were all hoping that the previous week’s market uptick was the start of a bottoming process that could bring this excruciating correction to an end.

Great Bear Royalties Corp. ‘GBR-V’ shares shot up by $2.12 or 48.18% to $6.52 after the Ontario based precious metals royalty and streaming company agreed to a $200-million takeover by International Royalty Corp., a wholly-owned subsidiary of much larger royalty and streaming company Royal Gold Inc. ‘RGLD-Q’.

Gold Fields Ltd. ‘GFI-J&N’ sweetened its takeover offer to Yamana Gold Inc. ‘YRI-T’ & ‘AUY-N’ shareholders by announcing the Johannesburg based gold miner will seek a listing on Canada’s Toronto Stock Exchange (TSX) and will enhance its dividend policy to reflect the increased bottom line earnings that Yamana will bring to the merged company.

OPEC’s first forecast for 2023 sees global oil demand growing by 2.7-million barrels per day next year to reach almost 103-million barrels per day and will outpace world-wide supply by over 100-million barrels per day.

And almost on cue – crude oil drops by $9.08 or 8.87% to a 2-month low of US$94.32.

Meanwhile – an ever-rising U.S. dollar helps gold bullion to fall to a 9-month low of US$1,704 an ounce.

All of which helps to push the TSX Venture Exchange – the world’s premier resources market to a 2-year closing low of 584.

The share price of New Gold Inc. ‘NGD-T&N’ dropped by $0.33 or 26.40% to $0.99 after the Canadian miner reported production issues with both its Rainy River Mine in Ontario and it’s New Afton Mine near Kamloops, BC.

The Bank of Canada surprised the market by raising its key overnight interest rate by a 24-year high of 1.0% to 2.5%.

Belgium’s Umicore N.V. ‘UMI-BR’ announced the materials technology company will invest $1.5-billion to build an electric vehicle (EV) battery facility in Loyalist, Ontario.

Even Barrick Gold Corp. ‘ABX-T’ & ‘GOLD-N’ couldn’t escape the market’s negativity as its share price fell by $0.73 or 3.41% to $20.67 after the world’s second largest gold producer’s 2nd-quarter production and sales figures failed to live up to analysts’ expectations.

And the price of Wesdome Gold Mines Ltd. ‘WDO-T’ stock dropped by $1.12 or 10.29% to $9.76 after the Ontario based miner announced 2nd-quarter production issues at its Eagle River and Kiena gold mines.

The way I see it – No one can say when this bear market will end, but if over 33-years of professional observation mean anything – I can confidently say that at the bottom of the market almost all of the corporate and economic news you hear will be negative – just as most of the news was positive at the market peak just six short months ago.

Methanex Corporation ‘MX-T’ & ‘MEOH-Q’ joined a growing list of petroleum companies to raise its dividend. The company’s share price rose by $2.42 or 5.40% to $47.27 after the world’s largest supplier of methanol raised its quarterly dividend by 20% to US$0.175 per share.

The key Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs rose by 4-rigs to 756, an increase of 272 over the year. In Canada – the number of active rigs rose by 16 to 191 for an increase of 41 in the past year.

For the Week – The DJI lost 0.35% to 31,228 as the S&P 500 fell by0.92% to 3,863 and the NASDAQ dropped by 1.57% to 11,452. Across the line – the TSX fell by 3,31% to 18,394 while the TSX Venture dropped 5.04% to 584.

Gold bullion lost 2.18% to US$1,704, as silver fell by 3.62% to US$18.59 and copper dropped 7.67% to US$3.23. Elsewhere – crude oil lost 6.87% to US$97.59 but natural gas surged up by 16.42 % to US$7.02. The Canadian dollar was off by 0.66% to US$0.7778. Overall – the CRB Commodities Index fell by 4.89% to 292.

And Finally – While China seems to get more than enough economic and social attention – it was of great interest to see that a new UN Department of Economic and Social Affairs report predicts India, with a current population of 1.41-billion people, will overtake China’s 1.43-billion people sometime in 2023 – a good 4-years ahead of previous predictions. The report also noted that China’s population will start to decline next year as well. 

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