A Weekly Recap of All Things Resources to Friday, March 8th

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‘That’s a Wrap’

By Rod Blake

A surprisingly thing happened in the equity markets last Friday, March 1st. Just as another uneventful week in the resource sector was drawing to a close, the price of gold bullion suddenly shot up by some $40 to a new all-time closing high of US$2,083. This move in gold spurred the TSX Venture Exchange, the home of most of the world’s junior gold companies, into renewed life and North America’s almost forgotten 5th bourse traded an encouraging 28-million shares and rose over 2% to end the week at a new 5-month high of 572. Was this a one-day blip in an otherwise almost uneventful junior market, or the start of a long awaited bull market? Place your bets accordingly.

The way I see it – The move in gold and the Venture on Friday was significant not only in magnitude but also in its timing. You see, Friday was the last day of trading before the first day of the perennial Prospectors & Developers Association of Canada (PDAC) Mineral Exploration & Mining Convention in Toronto, Ontario. This is the world’s premier gathering of those with any connection to the mineral industry and is especially important to those juniors looking for an audience of investors or financiers to support their company’s endeavours. Up until Friday, save for a few uranium issues, there was little, if any, enthusiasm for the junior resource sector. Friday’s market action could just be the spark this sector sorely needed. Timing is everything.

Gold bullion’s rally carried over into the new week and the yellow metal rose to a new all-time closing high of US$2,179 a troy ounce (t oz). And gold’s little cousin – silver rose to close at a new 21/2-month high of US$24.30 a t oz.

Meanwhile, lithium, the other metal that has been frustrating investors of late, rose to a new 3-month high of US$15,070 per tonne (t).

Which no doubt helped the price of Century Lithium Corp. ‘LCE-V’ to close at a new 4-month high of $0.75.

Although the stock price of Albemarle Corporation ‘ALB-N’ fell to a new 31/3-year closing low of US$109.40 after the lithium industry giant announced a US$1.75-billion financing.

Pulsar Helium Inc. ‘PLSR-V’ shares’ soared up by $0.59 or 59.00% to $1.59 after the Vancouver, BC based company reported “helium-rich gas” flowed naturally from the junior explorer’s Jetstream #1 appraisal well at its Topaz helium project in Minnesota.

Copper issues continued to attract investor attention with Taseko Mines Ltd. ‘TKO-T’ & ‘TGB-N’ closing at a new 10-month high of $2.34 after the Vancouver, BC based miner released a very robust 4th-quarter and year-end 2023 report.. Also, HudBay Minerals Inc. ‘HBM-T & N’ rose to a new 2-year closing high of $8.58, and Capstone Copper Corp. ‘CS-T’ reached a new all-time closing high of $7.80.

Pine Cliff Energy Ltd. ‘PNE-T’ shares’ fell by $0.11 or 9.82% to $1.01 after the Calgary, AB natural gas oriented producer company cut its monthly dividend by 50% to $0.005 or $0.06 per year, and also cut its capital programs for 2023.

And the price of Paramount Resources Ltd. ‘POU-T’ dropped by $3.88 or 12.37% to close at $27.48 after the Calgary, AB based petroleum company offered a reduced guidance for the coming year.

Going the other way – shareholders of Canadian Natural Resources Ltd. ‘CNQ-T & N’ were pleased to see their investment rise to a new all-time closing high of $97.70 after the Calgary, AB based petroleum giant released robust 4th-quarter and full year 2023 financials and better yet, raised its quarterly dividend by 5% to $1.05.

This as the key Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 7-rigs in the past week to 622, down by 124-rigs from this time last year. Up north – the number of Canadian active rigs fell by 6-rigs to 225, up by 2-rigs from one year ago.

Lumber stocks were mixed with the price of Canfor Corp. ‘CFP-T’ rising $0.36 or 2.16% to close at $17.01 after the Vancouver, BC based company issued a better than expected 4th-quarter and full-year 2023 financials.

However, Doman Building Materials Group Ltd. ‘DBM-T’ shares’ fell by  $0.37 or 4.50% to close at $7.85 after the Vancouver, BC based company’s year-end 2023 financials showed little improvement over 2022.

Meanwhile, with no news out, Western Forest Products Inc. ‘WEF-T’ stock fell to a new 13-year closing low of $0.605.

The TSX Venture Exchange closed a new 6-month high of 576 and the TSX Composite rose to a new 2-year closing high of 21,795.

The S&P 500 reached a new closing high of 5,157.

Lithium and silver were the best performing commodities on the week, while crude oil and uranium underperformed the most.

The CRB Commodities Index rose to a new 41/2-month closing high of 322.

All of the North American major markets were off going into the weekend while the TSX Venture managed to hold onto its weekly gain.

For the Week – the DJI lost 0.93% to 38,723, as the S&P 500 fell 0.25% to 5,124, and the NASDAQ dropped 1.17% to 16,085. Across the linethe TSX gained 0.86% to 21,738 and the TSX Venture rose 0.70% to 576. The CBOE Volatility Index or VIX rose 12.43% to 14.74.

With currencies – the Canadian dollar gained 0.58% to US$0.7417, while the U.S. dollar ‘DXY’ fell 1.08% to 102.74. 

With commodities – gold bullion gained 4.61% to US$2,179, as silver gained 5.10% to US$24.30, and copper rose 0.78% to US$3.89, and lithium improved by 7.03% to US$15,070. Crude oil lost 2.56% to US$77.92, and natural gas fell 1.10% to US$1.81, while uranium dropped 1.58% to US$93.50. With soft commodities – lumber rose 1.23% to US$576. Overall – the CRB Commodities Index gained 0.63% to 319.

One Last Thought – With the increased cost of mortgages constantly in the news these days, it was of interest to read that, according to the Canadian Taxpayers Federation – Canada’s top bank executives received a total of $3.5-million in performance bonuses in 2022.

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