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

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‘That’s a Wrap’

By Rod Blake

As the brokers, investors, traders and portfolio managers reviewed last week’s market action, they couldn’t help but notice one obscure alert that kept flashing on their screens. They had become somewhat accustomed to new high alerts for the NASDAQ, Dow30, S&P 500 and TSX Composite, but this one had not flashed for a very long time. For such a long time that many weren’t even sure what it was for. On closer look – the alert was indicating that the lowly TSX Venture Exchange had just broken through resistance at about 560 and ended the week at a new 6-month high of 576. Now, was this just a one off blip before the Venture once again falls back to its recent role of near total insignificance, or could it be an indication of not only a breakout, but of more upside to come?

The way I see it – Not only is the Venture at a 6-month high, it is also up some 13% from the 510 low it established last November and up over 4% so far this year. Fun fact – only the artificial intelligence (IA) driven NASDAQ and S&P 500, up 8.4% and 8.1% respectively, are outperforming the Venture to date this year. One has to go back to the expansionary Covid-19 era of 2000 to see the last time the TSXV made a similar move of length or magnitude. A span where the Venture rose some 250% from a low of 400 in March 2000 to a high of over 1,000 one year later. It is not very often that the TSXV outperforms its larger cousins, but when it does, it can create some remarkable returns. Should 576 hold and build support, the next significant overhead resistance is at about 650 set one year ago. Trading volumes are still light at about 23-million shares a day but seem to be improving. Higher trading volumes are needed to flush out the old overhead sellers. Look for increased trading volumes to help push the Venture up to test the next 1-year resistance level of about 650. Is this the start of a significant run for the Venture? Time will tell. However, one might be well advised to not ignore this new breakout alert.

Timing is everything – and no sooner does the TSX Venture break out last Friday, then the following Monday – Gabriel Resources Ltd. ‘GBU-V’ shares’ implode down by $0.85 or 97.70% to just $0.02 on word that a binding tribunal had agreed with the Romanian Government’s earlier decision that Gabriel’s key Rosia Montana Gold & Siver Project in that country should not be allowed to proceed towards production. This event helped pull the Venture down by over 16-points to end the first trading day of the current week back at 559.

Going the other way – Sivercrest Metals Inc. ‘SIL-T’ & ‘SILV-N.A’ stock rose by $0.76 or 10.17% to $8.23 after the Vancouver, BC miner pleased investors with the 4th-quarter and full 2023 operating and financial results from the company’s flagship Las Chispas Gold & Silver Operation in Sonora, Mexico.

And the shareholders’ of Aurion Resources Ltd. ‘AU-V’ were pleased to see their investment rise by $0.06 or 11.54% to $0.58 on word that Rupert Resources Ltd. ‘RUP-T’ was in talks to acquire B2Gold’s ‘BTO-T’ & ‘BTG-N.A’ 70% position in their joint venture of properties near Rupert’s flagship Ikkari Gold Project in northern Finland.

Gold bullion’s rally carried over into the new week, with the world’s only true global currency rising to a new record close of US$2,183 a troy ounce (t oz).

Which no doubt helped the price of gold/copper miner New Gold Inc. ‘NGD-T & N’ to close at a new 1-year high of $2.30.

Silver rose to a new 31/2-month closing high of US$25.20 a t oz.

Exceptionally high-grade drill assays are fun to report. To this end, Mawson Gold Ltd. ‘MAW-V’ and Southern Cross Gold Ltd. ‘SXG-A’ reported that diamond drill hole SDDSC107 returned 7.2 grams per tonne gold (gm/t Au) uncut over 455.3 metres (m) from their Sunday Creek Project in Victoria, Australia.

Wesdome Gold Mines Ltd. ‘WDO-T’ shares’ fell by $0.72 or 7.18% to $9.31 after the Toronto, ON based miner disappointed with its 4th-quarter and full year 2023 operating and financial results.

In the right circumstances, miners can make a lot of money and return a good portion to their shareholders through dividends. Similarly, the companies that handle the minerals can do the same. Such was the case with Westshore Terminals Investment Corp. ‘WTE-T’ that saw the west coast coal shipping company’s stock price rise by $0.85 or 3.35% to close at $26.20 after raising its quarterly dividend by some 7.14% to $0.375 and better yet – declared a special dividend of $0.35 a share.

Lithium Americas Corp. ‘LAC-T & N’ shares’ surged up by $0.43 or 5.58% to close at a 2-month high of $8.13 after the Vancouver, BC based mineral developer received a conditional commitment of a US$2.26-million loan from the U.S. Department of Energy (DOE). The loan will help to facilitate the construction of the company’s Thacker Pass lithium processing facility in Humboldt County, Nevada.

Lithium rose to a new 31/2-month high of US$16,167 a tonne (t).

Copper stocks continued to be resource market favourites with Hudbay Minerals Inc. ‘HBM-T & N’ and Taseko Mines Ltd. ‘TKO-T’ & ‘TGB-N.A’ rising to new respective 2 -year new closing highs of $9.38 and $2.62, while Capstone Copper Corp. ‘CS-T’ closed at an all-time high of $8.15.

Hudbay also announced that Japan industrial giant Marubeni Corporation had agreed to spend $12-million to earn a 20% non-operating interest in three of Hudbay’s exploration projects near Flin Flon, Manitoba.

This as the price of copper rose to a new 11-month high of US$4.11 a pound (lb).

Going the other way – the price of iron ore fell to a new 7-month low of US$105.50 a tonne (t).

NexGen Energy Ltd. ‘NXE-T & N’ announced the discovery of new intense uranium mineralization 3.5 kilometers east of the company’s flagship Arrow Deposit in the Athabasca Basin of northern Saskatchewan.

Imperial Oil Ltd. ‘IMO-T & N’ stock continued to be under accumulation and rose to a new all-time closing high of $91.75.

This as the price of crude oil rose to a new 41/2-month high of US$81.26 a barrel.

Calfrac Well Services Ltd. ‘CFW-t’ stock fell by $0.25 or 5.62% to $4.20 after the Calgary, AB based petroleum well site service company warned that low natural gas prices would negatively affect the company’s guidance for 2024.

And TC Energy Corp. ‘TRP-T & N’ announced the Calgary, AB based company had agreed to sell its Price Rupert Gas Transmission pipeline project to local first nation Nisga’a Nation and its Houston, TX based partner Western LNG for as yet undisclosed terms.

This as the influential Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs rose by 7-rigs in the past week to 629, down by 125-rigs from this time last year. Up north – the number of Canadian active rigs fell by 18-rigs to 207, unchanged from one year ago.

Western Forest Products Inc. ‘WEF-T’ share price continued to suffer and fell to a new 13-year closing low of $0.56.

This as the price of lumber rose to a new 3-month high of US$579 a thousand board feet (mbf).

The TSX Composite rose to a new 2-year closing high of 21,970.

The S&P 500 reached a new closing high of 5,175.

Lithium and copper led commodities higher on the week, while natural gas and lumber were the biggest drag.

The CRB Commodities Index rose to a new 41/2-month high of 327.

Trading volumes on the TSX Venture continued to improve – reaching 45.7-million shares a day.

Only the TSX Composite Index managed to etch out a small gain going onto the weekend.

For the Week – the DJI lost 0.02% to 38,715, as the S&P 500 fell 0.14% to 5,117, and the NASDAQ dropped 0.70% to 15,973. In Canadathe TSX gained 0.51% to 21,849 as the TSX Venture lost 4.34% to 551. The CBOE Volatility Index or VIX fell 2.31% to 14.40.

With currencies – the Canadian dollar lost 0.46% to US$0.7383, while the U.S. dollar ‘DXY’ rose 0.70% to 103.46. 

With commodities – gold bullion lost 0.96% to US$2,158, as silver gained 3.70% to US$25.20, and copper rose 5.66% to US$4.11, and lithium improved by 7.28% to US$16,167. Crude oil rose 4.03% to US$81.06, and natural gas fell 7.18% to US$1.68, while uranium dropped 2.67% to US$91.00. With soft commodities – lumber fell 3.65% to US$555. Overall – the CRB Commodities Index gained 2.51% to 327.

And Finally – This past week, the central bankers of both the United States and Canada reiterated that their long term agenda to return inflation back down to the targeted 2% level was working. But, some things, such as the price of automobiles, just don’t seem to add up. According to Autotraderthe average price of a new car in Canada rose by nearly 20% in 2023 to some $67,817.

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