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‘That’s a Wrap’

 By Rod Blake

After a few nervous weeks of correction, the brokers, investors, portfolio managers and traders who held U.S Index funds were confident that now, with two consecutive weeks of gains, that the bull market that began in October 2023 was back on track, that the central bankers were wrestling inflation back into its pre Covid-19 bag, and that artificial intelligence (AI) would continue to lead the markets higher. Meanwhile, those weighted to resources were left wondering if “I should have sold in April” after resources just had their worst week since the current mini-6-month bull market began last November, and perhaps another depressing summer lay ahead.

The way I see it Today’s resource markets are a far cry from those of the last few years. Many commodities such as gold, silver and uranium have broken through previous long-term resistance that will now provide support in a downturn. Other commodities such as copper lithium and rare earths are in increasing demand and the world races towards a zero-emission future. North American housing has never been in more demand. Financings on the TSX Venture Exchange are becoming more frequent and increasing in size, and trading volumes are rising. Commodities might be going through a correction, but I don’t think it will depress markets as in the past few years. I’ll be looking for support levels to hold and economics to keep upward pressure on demand. Perhaps this time it is different.

Fireweed Metals Corp. ‘FWV-V’ scored a coup and its stock price rose by over 17% to close at $1.23 on word that Adam Lundin, Chair of Lundin Mining Corp. ‘LUN-T had joined the Vancouver, BC zinc explorer as a Strategic Advisor.

It is said that the best place to look for gold is where the old miners used to be. Such was the good fortune for West Red Lake Gold Mines Ltd. ‘WRLG-V’ as the Vancouver, BC based mineral explorer reported recovering 415 of an estimated 2,500 ounces of gold that the company believes a previous operator left behind in its now shuttered sag mills of the old Madsen Mine mill in Northwest Ontario.

Some gold equities continued their bullish run with Franco-Nevada Corp. ‘FNV-T & N’ closing at a new 11/2-year high of $174.75 and Agnico Eagle Mines Ltd. ‘AEM-T & N’ reaching a new all-time closing high of $93.15.

Similarly, some copper stock charts continued to move from lower left to upper right with Capstone Copper Corp. ‘CS-T’ closing at a new all-time high of $10.56.

First Quantum Minerals Ltd. ‘FM-T’ shares’ closed at a new 6-month high of $18.58 on rumours that the new government in Panama would be receptive on re-opening the company’s Cobre Panama copper mine. This is the highest price for the Toronto, ON based miner’s stock since the previous government voted to shut down the mine last October.

Silver companies also saw some love with – Pan American Silver Corp. ‘PAAS-T & N’ stock rising $2.62 or 10.23% to a new 2-year closing high of $28.22 after the Vancouver, BC based silver miner pleased investors with its 1st-quarter production figures.

Fortuna Silver Mines Inc. ‘FVI-T’ & ‘FSM-N’ shares’ gained $0.49 or 7.42% to close at a new 2-year high of $7.09 after the Vancouver, BC based miner beat the streets’ expectations with the company’s 1st-quarter financials.

Similarly, Endeavour Silver Corp. ‘EDR-T’ & ‘EXK-N’ stock reached a new 9-month closing high of $4.54.

Shareholders’ of Teck Resources Ltd. ‘TECK.B-T’ & ‘TECK-N’, the giant bellwether company of Canadian mining, saw their investment rise to close at a new all-time high of $70.84.

Uranium issues caught an unexpected bid with industry giant Cameco Corporation ‘CCO-T’ & ‘CCJ-N’ and developer NexGen Energy Ltd. ‘NXE-T & N’ closing at respective record highs of $71.43 and $12.00.

NexGen also announced the Vancouver, BC based mineral developer was purchasing 2,702,410 pounds of natural uranium concentrate U3O8 for US$250-million to hold as inventory s the company advances its flagship Rook 1 Project in northern Saskatchewan.

The driller’s helper in me likes to report exceptional drill hole intercepts. This one comes from Vancouver, BC based Faraday Copper Corp. ‘FDY-T’ reporting its diamond drill hole LM-2 returned 103.64 metres (m) grading 1.34% copper (Cu) and 0.28 grams per tonne (g/t) of gold (Au) from the company’s Copper Creek project in Arizona.

Even some beaten down lithium equities got some interest with Standard Lithium Ltd. ‘SLI-T & N.A’ rising to a new 3-month closing high of $2.38.

Westshore Terminals Investment Corp. ‘WTE-T’ shares’ fell by $1.76 or 6.62% to $24.62 after the giant west coast coal terminal reported an unexpected drop in 1st-quarter shipping and revenue.

Going the other way – Finning International Inc. ‘FTT-T’ stock rose by $1.41 or 3.45% to $42.23 after the west’s leading company for mining and construction met analysts’ expectations with its 1st-quarter financials and better yet – raised its quarterly dividend for a 23rd consecutive year this time by 10% to $0.275.

Kinross Gold Corp. ‘K-T’ & ‘KGC-N’ shares’ gained $0.46 or 4.95% to close at a new 3-year high of $9.75 after the Toronto, ON based miner impressed the street with the company’s 1st-quarter production and financials.

Going the other way – the price of Osisko Development Corp. ‘ODV-T & N’ stock fell by $0.10 or 4.17% to $2.40 after the Montreal, PQ gold miner’s 1st-quarter revenue fell short of the market’s expectations.

Suncor Energy Inc. ‘SU-T & N’ – Canada’s largest integrated energy company – reported the company’s 1st-quarter petroleum product rose to a record 835,000 barrels per day (bbls/d).

Enbridge Inc. ‘ENB-T & N’ stock closed at a new 1-year high of $51.67 after the Calgary, AB based pipeline giant’s 1st-quarter financials exceeded analysts’ expectations.

And, we could have witnessed a short squeeze in the making as, only weeks after plunging to a 4-year low of $1.61 – Natural gas, in just a few days, rose to a new 3-month closing high of US$2.31 per million British thermal units (MMBtu).

 This as the closely followed Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 2-rigs in the past week to 603, down by 128 rigs from this time last year. Across the line – the number of Canadian active rigs dropped by 4-rigs to 116, up by 22-rigs from one year ago.  

Lumber issues continued to be out of favour with Western Forest Products Inc. ‘WEF-T’ shares falling to a new 141/2-year closing low of $0.51.

Meanwhile, Vancouver, BC based Canfor Corporation ‘CFP-T’ sited challenging operating conditions and a shortage of economic timber in announcing the permanent closing of its Polar sawmill in Bear Lake, BC and suspension of planned reinvestment in the company’s mill in Houston, BC.

The TSX Venture Exchange rose to a new 8-month closing high of 597 and the TSX Composite Index closed at a new all-time high of 22,376.

Silver and natural gas were the commodities with the greatest gains over the week, while lumber and lithium reported the greatest losses.

All five North America American markets were in the black going into the weekend as world affairs and economics seemed to be in balance.

For the Week – the DJI gained 2.16% to 39,513, while the S&P 500 rose 1.85% to 5,223, and the NASDAQ gained 1.15% to 16,341. In Canada the TSX gained 1.65% to 22,309 and the TSX Venture rose 2.58% to 597. The CBOE Volatility Index or VIX fell 6.97% to 12.55.

With currencies – the Canadian dollar gained 0.10% to US$0.7314, and the U.S. dollar ‘DXY’ rose 0.21% to 105.30.

With commodities – gold bullion rose 2.56% to US$2,360, as silver gained 6.06% to US$28.16, and copper rose by 1.53% US$4.65, while lithium lost 0.57% to US$15,276. Crude oil gained 0.31% to US$78.20, while natural gas rose 4.65% to US$2.25, and uranium gained 1.63% to US$93.25. With soft commodities – lumber lost 2.79% to US$487. Overall – the CRB Commodities Index gained 2.11% to 338.

And Finally – As Canadian law enforcement departments grapple with a surge in auto thefts – it was with a smile to read that the official vehicle of the federal Minister of Justice was stolen three times in as many years from 2021 – 2023.

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