A Weekly Recap of All Things Resources to Friday, July 22nd
‘That’s a Wrap’
By Rod Blake
When the investors, brokers, traders and portfolio managers turned on their trading terminals early Monday morning they were encouraged to see the futures markets up and the U.S. dollar down. They knew that since the markets tend to look out about 8-months – this turn in futures and the Greenback could be signaling that perhaps the worst of the U.S. Fed credit tightening cycle might be behind them.
Fission Uranium Corp. ‘FCU-T’ made another significant step towards an eventual production decision for its prized Triple R uranium deposit in Northwest Saskatchewan after the Kelowna, BC based mineral company announced it had entered into an engagement and communication agreement with the local Buffalo River Dene Nation.
Suncor Energy Inc. ‘SU-T&N’ announced that in an effort to enhance shareholder value, the Calgary, Alberta integrated energy company had formed a committee to oversee a strategic review of its downstream retail business that may include selling part or all of their Petro-Canada retail operations.
The share price of Precision Drilling Corp. ‘PD-T & ‘PDS-N’ rose by $6.22 or 9.02% to $75.20 after the Calgary, Alberta well servicing company announced an agreement to purchase fellow well servicing company Arctic Energy Services Inc. for an all-cash price of some $38.2-million.
North American semiconductor independence took another step forward after Chemtrade Logistics Income Fund ‘CHE.UN-T’ announced a joint venture with Kanto Group to build a chemical plant in Casa Grande, Arizona as a new source high purity sulphuric acid to better meet the growing needs of domestic semiconductor manufacturers.
PrairieSky Royalty Ltd. ‘PSK-T’ stock rose by $0.83 or 4.74% to $18.33 after the Calgary, Alberta petroleum royalty company reported record 2nd-quarrter production and revenue figures.
The way I see it – While the oil & gas industry continues to lead the resource sector with outstanding revenue and earnings reports, the stock market continues to value this sector at much lower multiples. Sooner or later – the stock market always gets it right. So, this means one of two outcomes. Either the market is right now, and petroleum company share prices are going to sink to much lower levels or, the market is wrong at this time and the price of oil & gas stocks will rise to much higher prices.
And further to the observation that the market reacts to rumours – the share price of West Fraser Timber Co. ‘WFG-T&N’ soared up by $15.89 or 14.72% to $123.83 on unconfirmed reports that the world’s largest forestry company was a take-over target.
Mining giant Teck Resources Ltd. ‘TECK.B-T’ & ‘TECK-N’ announced a 50:50 joint venture with PolyMet Mining Corp. to develop the strategic NewRange Copper Nickel project in the Iron Range mining region of Minnesota.
The Canadian Nuclear Association believes that the pressing need to slash emissions makes the Canadian oilsands, with their remote locations and high energy requirements, ideally suited for the new small modular nuclear reactors (SMNRs) that are designed and built to meet the needs individual operations.
The important Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs rose by 2-rigs to 758, an increase of 267 from this time last year. On the Canadian side – the number of active rigs rose by 4 to 195 for an increase of 46 in the past year.
For the Week – The DJI rose 2.16% to 31,901 while the S&P 500 gained 2.56% to 3,962 and the NASDAQ improved by 3.34% to 11,834. Up north – the TSX gained 3,20% to 18,393 and the TSX Venture rose by 4.11% to 608.
And Finally – Gold bullion gained 2.11% to US$1,740, while silver fell by 0.05% to US$18.48 and copper rose by 2.79% to US$3.32. Elsewhere – crude oil fell by 3.01% to US$94.65 but natural gas soared up by 18.38% to US$8.31. The Canadian dollar fell by 0.41% to US$0.7746. Overall – the CRB Commodities Index rose by 3.08% to 301.