A Weekly Recap of All Things Resources to Friday, July 28th
‘That’s a Wrap’
By Rod Blake
As the brokers, investors, portfolio managers and traders surveyed the North American markets going into the last week of July, it was hard not to be optimistic as the TSX Composite was near a 3-month high while the U.S. Dow, S&P 500 and NASDAQ indexes were at 18-month highs. Yes all was good until they cast their gaze on the TSX Venture Exchange which had lost almost 2% the previous week and at just above 600, was locked in a bottom trading range that goes all the way back to the summer of 2022.
The way I see it – Comedian Rodney Dangerfield had his signature line – “I don’t get no respect” which I think accurately describes the markets view of the TSX venture Exchange and by extension, resources in general. The current tech led rally has left most any interest in resources far behind. For example – gold bullion with a 2nd-quarter average price of about US$1,980 an ounce just had its best quarterly average price ever – gold stocks are down about 8% on average for the quarter. Base metals, lithium, and critical minerals are not faring much better. One encouraging sign is that petroleum stocks seem to be following the price of crude oil (US$80.66) higher of late. Another isolated bit of encouragement has the price of uranium is testing 12-year highs. But while the stock price of sector giant Cameco Corporation ‘CCO-T’ is trading at 15-year highs ($44.94) and a couple of other senior uranium stocks are holding their own on Canada’s senior board (TSX), for the most part, the rest of the uranium sector listed on the Venture are trading near multi-year lows. The Venture Exchange has a history of being dormant for extended periods of time and then coming to life with a major event such as new highs in resource prices, a new mineral discovery, a dominant area play, or a new mineral or product being in vogue. The Venture Exchange probably needs such an event to give it back some respect.
TC Energy Corp. ‘TRP-T & N’ share price fell by $2.70 or 6.83% to a 31/2-year low of $36.83 after the Calgary, AB based energy company announced the sale of a 40% interest in two of the company’s American pipelines, Columbia Gas Transmission, LLC and Columbia Gulf Transmission, LLC to Global Infrastructure Partners in an all cash deal of some $5.2-billion.
Later in the week the company announced it would split into two separate trading entities – one focused on energy and one focused on pipelines.
Crescent Point Energy Corp. ‘CPG T & N’ stock rose by $0.36 or 3.41% to 10.77 as the Calgary, AB based petroleum company continued to give back to shareholders by declaring a $0.035 per share “Special Dividend” to go along with its regular quarterly dividend of $0.10 per share.
Similarly – the price of Precision Drilling Corp. ‘PD-T’ rose by $5.51 or 7.05% to $83.70 after the Calgary, AB based driller impressed the street with its 2nd-quarter financials.
This as the price of crude oil rose to a new 3-month high of US$80.66 per barrel.
The key Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 5-rigs over the past week to 664, down by 103 from this time last year. Across the line – the number of Canadian active rigs rose by 6-rigs to 193, down by 11 from a year ago.
14-years after signing a G20 initiative to eliminate fossil fuel subsidies – Ottawa became the first of the G20 nations to announce Canada’s plan to phase out “inefficient fossil fuel subsidies”.
General Motors, BMW, Honda, Hyundai, Kia, Mercedes and Stellantis jointly announced that the automakers would build enough high-power charging stations across Canada and the United States to charge 30,000 electric vehicles (EVs).
Mag Silver Corporation ‘MAG-T & N’ stock rose by $1.51 or 10.19% to $16.33 after 2nd-quarter production from the company’s Juanicipio silver mine in Mexico exceeded analysts’ expectations.
It is well known that in this socially conscious era that mineral exploration companies must have the endorsement of their endeavours from the local stakeholders. So it wasn’t too surprising when the price of Doubleview Gold Corp. ‘DBG-V’ shares plunged lower by $0.12 or 28.6% to $0.30 on word that the Tahltan First Nation was opposing any continuing operations at the Vancouver, BC based junior explorer’s Hat Project southwest of Dease Lake, BC.
Conversely, Northern Dynasty Minerals Ltd. ‘NDM-T’ & ‘NAK-N’ surged up by $0.08 or 23.53% to $0.42 after the State of Alaska filed a motion in the United States Supreme Court arguing that the U.S. Environmental Protection Agency’s (EPA) veto of Northern Dynasty’s Pebble Project hindered the state’s right to develop its mineral resources.
The TSX Composite Index (TSX) rose to a new 3-month high of 20,582.
Down south – The Dow Jones Industrials (DJI) and S&P 500 rose to new respective 18-month highs of 35,520 and 4,582.
The CRB Commodities Index rose to a new 11-month high of 315.
For the Week – the DJI gained 0.66% to 35,459 with the S&P 500 up 1.01% to 4,582 and the NASDAQ ahead by 2.02% to 14,317. Up north – the TSX lost 0.14% to 20,519 but the TSX Venture gained 1.30% to 625. The CBOE Volatility Index or VIX fell by 1.99% to 13.33.
With currencies – the Canadian dollar lost 0.22% to US$0.7544 as the U.S. dollar ‘DXY’ rose by 0.61% to 101.71.
With commodities – gold bullion lost 0.15% to US$1,959, with silver down by 1.06% to US$24.33, while copper gained 3.16% to US$3.92, and lithium fell by 6.86% to US$38,817. Crude oil gained 5.25% to US$80.66 while natural gas lost 2.94% to US$2.64, and uranium rose by 0.72% to US$56.15. With soft commodities – lumber lost 5.49% to US$516. Overall – the CRB Commodities Index was up by 1.62% at 313.
And Finally – It’s summer and time for a break, so as such this scribe is taking the next couple of weeks to travel to Swift Current, SK to visit family and friends and chase a few golf balls. If all goes according to plan, ‘That’s a Wrap’ will resume on Friday August 18th.