A Weekly Recap of All Things Resources to Friday, June 30th
‘That’s a Wrap’
By Rod Blake
The new trading week began with resource stocks and especially gold stocks lagging the general market. To this end it was with a feeling of déjà vu to hear Barrick Gold Corp. ‘ABX-T’ & ‘GOLD-N’ CEO Mark Briskow state that “Copper is as strategic as gold is precious.” as the world’s second largest gold miner prepares to spend some US$7-billion to develop a copper/gold project in Pakistan and diversify the company’s economic base.
The way I see it – It seems that what once went around still does come around. I can clearly remember in the 1990s Barrick’s founder Peter Munk being criticised for allowing Barrick to invest in copper projects and for selling gold forward to protect the company from what was then very weak gold prices. The criticism being that gold investors wanted their companies to be pure gold plays, producing and selling only gold at current prices so as to take advantage of rising prices that, in every gold bugs mind, were sure to come. So far Mr. Briskow’s plans are being accepted. But it will be interesting to see how shareholders react if gold finally breaks free of its current range and goes to new highs or should the price of copper fall.
BULGOLD Inc. ‘ZLTO-V’ stock rose by $0.02 or 6.67% to $0.32 on word that Dundee Resources Ltd., a subsidiary of Dundee Corp. ‘DC.A-T’, had acquired a 15% interest in the fellow Toronto, ON based junior explorer through a recently closed $0.30 per unit private placement.
Meanwhile the price of NovaGold Resources Inc. ‘NG-T & N’ shares’ fell by $0.74 or 12.37% to $5.24 after the Vancouver, BC based mineral developer’s 2nd-quarter report failed to reveal any significant advancement for its flagship Dolin Gold project in Alaska.
This as the price of gold bullion fell to new 3-month low of US$1,908 a troy ounce.
Denison Mines Corp. ‘DML-T’ & ‘DNN-N’ shares’ rose by $0.01 or 0.64% to $1.58 after the Toronto, ON based released an updated Feasibility Study for the company’s Phoenix uranium deposit in the Athabasca Basin region of northern Saskatchewan.
Crescent Point Energy Corp. ‘CPG-T & N’ announced a revised 17.5% increase to the Calgary, AB company’s 2023 production forecast to some 195,000 barrels per day.
This as OPEC predicted that – even with electrification – global oil demand will rise by 23% by 2045 to 110 million barrels per day.
The widely distributed Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 8-rigs over the past week to 674, down by 76 from this time last year. Across the line – the number of Canadian active rigs dropped by 2, for a gain of 1 in the past year.
Polestar Automotive Holding UK PLC ‘PSNY-N’ joined a growing list of electric vehicle (EV) manufacturers to adopt Tesla’s industry leading North American Charging Standard (NACS) that will enable the Sweden based company’s EVs the convenience of recharging at any of Tesla’s 12,000 (and growing) charging points across North America.
Foremost Lithium Resource & Technology Ltd. ‘FAT-C’ shares’ plunged by $0.015 or 11.54% to $0.115 after the Vancouver, BC based junior mineral explorer surprised the market by announcing a consolidation of its share structure by issuing 1-new share for 50-old shares.
The way I see it – As a broker, I hated these cosmetic share consolidations designed solely to raise the price of a company’s stock. Such a move is an insult to existing shareholders who have been supporting the company – many for a long period of time. A mineral company’s share price should rise over time as management adds assets to the company’s portfolio. A 1-for-50 rollback shows that existing management has failed in this endeavour. Most importantly – when a stock is rolled back without adding assets the post-consolidation share price often drifts back down to test the pre-consolidation price. In this case – about $0.13.
The North American markets traded quietly but optimistically going into the July 1st Canada Day long weekend and the July 4th U.S. Independence Day quasi long weekend – with the S&P 500 and NASDAQ closing at new 15-month respective highs of 4,450 and 13,788.
For the Week – the DJI gained 2.02% to 34,407 with the S&P 500 up by 2.35% to 4,450 and the NASDAQ ahead by 2.19% to 13,788. In Canada – the TSX gained 3.80% to 20,155 Â and the TSX Venture rose by 3.67% to 621. The CBOE Volatility Index or VIX rose by 1.12% to 13.59.
With currencies – the Canadian dollar lost 0.26% to US$0.7548 while the U.S. dollar ‘DXY’ gained by 0.06% to 102.94.Â
With commodities – gold bullion lost 0.10% to US$1,919, while silver gained 1.56% to US$22.75, as copper dropped 1.57% to US$3.75, and lithium fell by 1.71% to US$42,313. Crude oil gained 1.53% to US$70.50 and natural gas gained 2.57% to US$2.79, as uranium fell by 0.33% to US$56.20. With soft commodities – lumber lost 5.70% to US$529. Overall – the CRB Commodities Index was off by 1.37% at 288.
And Finally – Attention to detail is usually a good thing, but lack of it can be an extremely bad thing. Case in point – someone in Ontario, who forgot to check or lost their Lotto Max lottery ticket, forfeited $70-million when the ticket’s 1-year timeline for cashing it in expired on Thursday.