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‘That’s a Wrap’

By Rod Blake

Most investors, traders and portfolio managers began the new week with a feeling of some relief to see the markets open to the upside as, for the first time in three weeks, the headlines were not about another failed bank.

The way I see it – In this era of 24/7 media and instant analysis, the equity and bond markets as well as market pundits themselves cannot help but react to the latest or most significant story. Only time will tell whether or not the banking crisis is now behind us but over time I have observed that it is rare that something that is as widespread as a banking crisis would all but go away after just a few weeks.

It would seem that electric vehicles (EVs) are not just a passing fad, as a recent Canadian Auto Association (CAA) survey of over 16,000 people across the country found that 97% of EV owners would buy another. The common concerns over affordability, driving range and cold weather performance were found to be in decline while the biggest concern was not with the vehicles themselves but the overall lack of public charging stations.

Liontown Resources Ltd. ‘LTR-A’ shares’ surged higher by $0.975 or 63.93% to A$2.50 after the Perth based Australian lithium developer received an unsolicited A$5.5-billion all-cash takeover offer from American giant lithium producer Albemarle Corp. ‘ALB-N’.

The shareholders of Patriot Battery Metals Inc. ‘PMET-V’ & ‘PMT-A’ were pleased to see their investment rise by $0.92 or 7.20% to $13.70 after the junior explorer released encouraging drill hole lithium assays – including 83.7 meters of 3.13% lithium oxide (Li20) – from the company’s Corvette Property in the James Bay Region of Quebec.

This as the price of lithium fell to a new 31/3-year low of US$34,404 per tonne.

Cameco Corporation ‘CCO-T’ & ‘CCJ-N’ shares’ rose by $0.57 or 1.72% to $33.63 after the Saskatoon, SK uranium giant pulled off every taxpayer’s dream – namely winning a $300-million tax refund battle with the Canada Revenue Agency over income tax charged on the company’s foreign subsidiaries from 2007 – 2013.

Australia’s Origin Energy Ltd. ‘ORG-A’ stock rose by $0.26 or 3.28% to A$8.18 after the petroleum company agreed to an all-cash A$15.35-billion takeover offer by a consortium led by Canada’s Brookfield Asset Management ‘BAM-T & N’.

Spartan Delta Corp. ‘SDE-T’ shares’ rose by $0.99 or 7.18% to $14.78 after the Calgary, AB based petroleum company agreed to sell the company’s Gold Creek and Karr Montney assets to Calgary’s Crescent Point Energy Corp. ‘CPG-T & N’ for an all-cash consideration of some $1.7-billion.

Canada Infrastructure Bank announced a $277-million investment along with partners including Shell plc ‘SHEL-N’ and Suncor Energy Inc. ‘SU-T&N’ to build the $1.2-billion Varennes Carbon Recycling biofuels facility in Varennes, Quebec.

Natural gas dropped to a new 21/2-year low of US$1.99 per million British thermal units (mmbtus).

The key Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 3-rigs over the past week to 755, up by 82 from this time last year. Up north – the number of active rigs dropped by 26-rigs to 139, an increase of 15 in the past year.

It is rare that the price of an acquirer’s shares go up when announcing a deal so the market must like this one a lot as – the price of Lundin Mining Corp. ‘LUN-T’ stock rose by $0.54 or 6.91% to $8.35 after the Toronto, ON based miner agreed to buy 51% of the Caserones copper-molybdenum mine in Chile in an all-cash deal valued at some $950-million.

And while with copper – Copper Mountain Mining Corp. ‘CMMC-T’ stock gained $0.21 or 11.60% to $2.02 after the Princeton, BC miner issued a better than expected operations and financial outlook for 2023.

Barrick Gold Corp. ‘ABX-T’ & ‘GOLD-N’ announced the Toronto, ON based mining giant had reached an agreement with the government of Papua New Guinea that will see resumption of operations at the company’s Porgera gold mine that were suspended in 2020 and is projected to add some 700,000 ounces of gold to Barrick’s annual gold production profile.

The North American markets traded with some enthusiasm going into the weekend.

For the Week – the DJI gained 3.21% to 33,274 with the S&P 500 up by 3.48% to 4,109 and the NASDAQ ahead by 3.37% to 12,222. In Canada – the TSX rose by 3.07% to 20,100 and the TSX Venture gained 3.59% to 634. The CBOE Volatility Index or VIX fell by 13.98% to 18.70.

With currencies – the Canadian dollar gained 1.66% to US$0.7398 as the U.S. dollar ‘DXY’ fell by 0.59% to 102.51.

With commodities gold bullion fell by 0.46% to US$1,969, while silver gained 3.84% to US$24.09, with copper off by 0.24% to US$4.09, and lithium down by 14.53% to  US$34,404. Crude oil rose by 9.03% to US$75.67 as natural gas lost 0.46% to US$2.17, and uranium gained 0.30% to US$50.35. With soft commodities – lumber fell by 10.17% to US$371. Overall – the CRB Commodities Index was ahead by 3.52% to 294.

And Finally – the current interest in precious metals has not only caught the attention of investors, but also from thieves, as according to Carfax – the estimated number of catalytic convertors (which contain small amounts of platinum, palladium and rhodium) stolen from American autos tripled from about 52,000 in 2021 to some 153,000 in 2022.

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