A Weekly Recap of All Things Resources to Friday, June 23rd
‘That’s a Wrap’
By Rod Blake
After a week away golfing and visiting family and friends in British Columbia’s spectacular Okanagan and Similkameen districts I returned to this post to see that the markets were carrying on with more of the same. That is – the large cap U.S. markets that held the so called magnificent seven Artificial Intelligence (AI) stocks marched on to multi-month highs while the rest of the market and especially the resource stocks, fell further and further behind.
The way I see it – Portfolio managers and investors alike are staying with the AI market for the fear of missing out (FOMO). Fear of selling now and missing out on further gains to come. This strategy takes more money to get into the AI sector as the market moves higher which in turn takes more money away from other sectors including resources. I’ve heard the interest in the current resource market as being the same as having just a handful of people supporting a sporting event in a major stadium. Very hard to see and even harder to be heard. The one positive slant to this market is that resource investors have more time to accumulate their favourites.
This as the price of gold bullion and silver sank to a new 3-month respective lows of US$1,914 and US$22.30 a troy ounce.
Telus Corp. ‘T-T’ announced the telecommunication giant had partnered with Australian electric vehicle (EV) charging company JOLT to install up to 5,000 public fast chargers across Canada.
Hyundai Motor Co. and Rivian Automotive Inc. ‘RIVN-Q’ join GM and Ford in adopting Tesla’s ‘TSLA-N’ electric vehicle (EV) charging stations.
Meanwhile the U.S. Department of Energy announced a US$9.2-billion loan to Ford Motor Co. ‘F-N’ to enable the iconic America auto company to build three EV battery plants in Kentucky and Tennessee.
This as figures supplied by Benchmark Mineral Intelligence suggest that the world needs to invest at least $514-billion across the battery supply chain to meet the projected 2030 demand – including $220-billion in mining, $51-billion for lithium processing and recycling, 93-billion for battery materials and $201-billion in gigafactories.
Marimaca Copper Corp. ‘MARI-T’ shares’ rose by $0.15 or 3.75% to $4.15 after the Vancouver, BC based mineral developer received a $20-million financing from Japan’s Mitsubishi Corporation that will be used to advance the company’s flagship Marimaca Copper Project in Chile.
You can tell it’s a bear market for precious metals when the price of Sitka Gold Corp. ‘SIG-C’ stock was unchanged at $0.10 after the Vancouver, BC, the junior explorer reported 422.7 metres of 0.74 grams per tonne gold form the company’s RC Gold Project east of Dawson City, Yukon.
A U.S. federal judge has told Calgary, AB based Enbridge Inc. ‘ENB-T & N’ that the company has only three years to shut down and to move the part of its controversial Line 5 pipeline off of Native American land that it now crosses.
Calgary, AB based Baytex Energy Corp. ‘BTE-T&N’ announced an enhanced production profile for the rest of 2023 mainly due to the company’s recent acquisition of U.S. domiciled Ranger Oil Corp.
The influential Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 5-rigs over the past week to 682, down by 71 from this time last year. In Canada – the number of active rigs rose by 10, for a gain of 15 in the past year.
Stillwater Critical Minerals Corp. ‘PGE-V’ stock surged up by $0.055 or 33.33% to $0.22 on word that mining giant Glencore Canada Corp. had taken down a $4.94-million private placement representing a 9.99% strategic investment in the Vancouver, BC based junior explorer and its flagship Stillwater West Ni-PGE-Cu-Co +Au project in Montana.
Mining giant Newmont Corporation ‘NEM-N’ & ‘NGT-T’ was forced to declare force majeure on metal deliveries from its Peñasquito gold/silver mine in Mexico due to an ongoing miners’ labour strike.
Uranium rose to a new 14-month high of US$57.75 a pound.
While the price of lumber reached a new 3-month high of US$561 per 1,000 board feet.
And the Canadian loonie rose to a new 9-month high of US$0.7601.
Meanwhile the CBOE Volatility Index or VIX fell to a new 3-year low of 12.90 as investors continued to feel that the economic world was unfolding as it should.
The markets limped into the weekend mainly due to weak resource prices weighing on the Canadian side while profit taking of the magnificent seven stocks pulled down the American indexes.
For the Week – the DJI lost 1.67% to 33,727 with the S&P 500 down 1.41% to 4,348 and the NASDAQ off by 1.44% to 13,493. Up north – the TSX lost 2.79% to 19,418 and the TSX Venture fell by 2.44% to 599. The CBOE Volatility Index or VIX dropped by 0.74% to 13.44.
With currencies – the Canadian dollar gained 0.12% to US$0.7568 and the U.S. dollar ‘DXY’ rose by 0.63% to 102.88.
With commodities – gold bullion lost 1.69% to US$1,921, with silver off by 7.40% to US$22.40, as copper dropped 1.80% to US$3.81, and lithium fell by 1.83% to US$43,045. Crude oil lost 3.26% to US$69.44 while natural gas gained 3.26% to US$2.72, as uranium fell by 2.16% to US$56.50. With soft commodities – lumber gained 7.06% to US$561. Overall – the CRB Commodities Index was down by 2.99% at 292.
And Finally – How time goes buy and companies change. To that end it was of interest to read that Netflix had terminated its DVD-by-mail service that started the now streaming company some 25-years ago.