A Weekly Recap of All Things Resources to Friday, March 1st

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‘That’s a Wrap’

By Rod Blake

As the brokers, investors and portfolio managers closed their terminals last Friday they had the collective satisfaction that, those that were invested in passive index funds had managed to carve out significant gains for the better part of 4-months now. All of this almost stress free. Just invest in the Dow 30, the S&P 500, the NASDAQ, the TSX Composite or even the Japan Nikkei 225 then lean back and watch the markets move higher and higher. Easy money…

The way I see it – The late Jim Croce said it best – “You don’t p__s into the wind.” If you are or you’re going to be an investor in resource stocks, and especially junior resource issues, you should keep Jim’s lyrics taped to your trading terminal. As a resource broker I learnt many times over the years that you can’t wish a market higher even though you know that a particular issue is worth more than the ticker indicates. When resource markets are out of favour they can be completely out of favour. And for the most part, that is the current reality of the resource markets, especially those involved with precious metals or lithium. Right now the media, analysts, and institutions are completely fixated on the Magnificent Seven induced artificial intelligence (IA) market and its spinoffs. This will continue as long as it continues. Resource investors can be smug with the knowledge that this type of market usually ends badly, but that doesn’t take away from the fact that it is going amazingly well to date and may continue for some time. For now, the best a resource investor can do is accumulate favourites and wait for the wind to blow their way.

How low can a market go? With gold within $50 of its recent all-time high – the world’s largest gold miner Newmont Corporation ‘NEM-N’ and ‘NGT-T’ had it closing stock price fall to a new 5-year low of US$29.86, while 1-million ounce producer B2Gold Corp. ‘BTO-T’ & ‘BTG-N.A’ shares’ fell to a new 51/2-year closing low of $3.19.

China’s Yintai Gold Co. Ltd was finally named as the $368-million mystery suitor of Vancouver, BC mineral developer Osino Resources Corp. ‘OSI-V’ and its key Twin Hills Gold Project in central Namibia.

Lithium stocks continues to suffer with American Lithium Corp. ‘LI-V’ & ‘AMLI-Q’ and Standard Lithium Ltd. ‘SLI-V & N.A’ trading down to respective new 31/2-year closing lows of $0.92 and $1.56.

No doubt helped lower as Apple Inc. ‘AAPL-Q’, citing projected compressed profit margins in the electric vehicle (EV) sector, announced the giant technology company was halting its 10-year project to develop an Apple EV.

On a related note – Lion Electric Company ‘LEV-V & N- stock plunged lower by $0.40 or 16.88% to $1.97 after the Montreal, PQ based medium and heavy-duty electric vehicle (EV) manufacturer failed to impress investors with its 4th-quarter sales figures and 2024 growth projections.

This as a consortium of auto companies have sponsored “Ionna” – an electric vehicle (EV) charging company with a mandate to install some 30,000-plus EV charging stations across the United States and Canada.

Some copper stocks continued to receive renewed investor interest with the price of Hudbay Minerals Inc. rising by $0.68 or 9.43% to close at a 1-year high of $7.89 after the Toronto, ON based copper miner pleased the street with the company’s strong 4th-quarter financials and better yet, upped the company’s guidance for 2024.

And fellow copper miner – Taseko Mines Ltd. ‘TKO-T’ & TGB-N traded up to a new 10-month closing high of $2.13.

The shareholders’ of Sandfire Resources America Inc. ‘SR-V’ were thrilled to watch their investment surge upward by $0.10 or 125.00% to $0.18 after the Montana Supreme Court ruled to reinstate the company’s operating permit for its Black Butte Copper Project. (Now, if only Northern Dynasty Minerals Ltd. ‘NDM-T & ‘NAK-N’ could get a similar like ruling.)

Going the other way – Ivanhoe Mines Ltd. ‘IVN-T’ stock fell by $0.59 or 4.03% to close at $14.06 after the Toronto based miner projected higher 2024 costs at the company’s flagship Kamoa-Kakula Copper Complex in Africa’s Democratic Republic of the Congo (DRC).

After a 3-week slump, some uranium stocks traded higher on renewed investor interest.

Africa Oil Corp. ‘AOI-T’ stock fell by $0.19 or 8.33% to $2.09 after the Vancouver, BC based petroleum company issued an unexpected 4th-quarter operating loss.

Canadian petroleum giant Imperial Oil Ltd. ‘IMO-T & N’ stock rose to a new record closing high of $86.17.

Crescent Point Energy Corp. ‘CPG-T & N’ shares’ rose by $0.46 or 4.75% to close at a new 4-month high of $10.15 after the Calgary, AB petroleum company beat the street’s expectations with its 4th-quarter and 2023 financial and operating results plus, better yet, issued and optimistic guidance for 2024.

Meanwhile, in a recent filing with Canada Energy – Trans Mountain Pipeline stated that the final cost of the west coast expansion project would climb by about another 10% to $30.9-million. Remember – this project began in 2013 with an estimated cost of $5.4-million.

The U.S. Energy Information Administration (EIA) announced that country’s oil demand rose in 2023 to 20.23-million barrels per day (mmb/d), just below the record high set in 2019.

This as the closely followed Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs rose by 3-rigs in the past week to 629, down by 120-rigs from this time last year. Across the line – the number of Canadian active rigs was unchanged at 231, down by 15-rigs from one year ago.

The major North American markets continued their bullish move late into the week with the TSX Composite closing at a new 2-year high of 21,552, while to the south, the S&P 500 and NASDAQ rose to respective new all-time closing highs of 5,137 and 16,275.

And for the first time in many months, the TSX Venture Exchange finally caught a bid – rising to a new 51/2-month closing high of 572 on an improved volume of some 28-million shares traded.

Late in the week, lithium stocks attracted a bid, with many in the green for the first time in many weeks.

Gold Bugs cheered wildly as Gold bullion surged higher on Friday to close at a new all-time high of US$2,083 a troy ounce (t oz).

Natural gas and lithium rose the most over the week, while uranium and copper were down the most.

All of the North American markets rallied going into the weekend.

For the Week – the DJI lost 0.11% to 39,087 as the S&P 500 gained 0.94% to 5,137 and the NASDAQ rose 1.74% to 16,275. Up norththe TSX gained 0.65% to 21,552 and the TSX Venture rose 4.38% to 572. The CBOE Volatility Index or VIX fell 4.65% to 13.11.

With currencies – the Canadian dollar fell 0.41% to US$0.7374, while the U.S. dollar ‘DXY’ dropped 0.11% to 103.97. 

With commodities – gold bullion gained 2.36% to US$2,083, as silver gained 0.87% to US$23.12, while copper lost 0.52% to US$3.86, and lithium gained 6.22% to US$14,080. Crude oil rose 4.55% to US$79.97, and natural gas gained 15.82% to US$1.83, while uranium fell 6.82% to US$95.00. With soft commodities – lumber roe 0.89% to US$569. Overall – the CRB Commodities Index fell 1.60% to 317.

One Last Thought – It’s time to pass the torch. That is – the population/economic torch. You see – Statistics Canada reported that for the first time, Millenials (those born between 1981 & 1996) have overtaken us Baby Boomers as the largest proportion of the country’s population. Thus, ending an amazing 65-year run that positioned my post Second World War demographic as the primary driver of Canada’s population and economic growth. Now, we’re handing that responsibility to the next generation – the Millenials. Canada today seems somewhat disoriented and fragile in an uncertain world. I wish them well.

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