A Weekly Recap of All Things Resources to Friday, May 17th

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‘That’s a Wrap’

By Rod Blake

As I reviewed the end of week market stats last Friday, the broad conclusion was that all five of the North American Indexes that I follow for this commentary were up on the week, and in particular, the U.S. markets were ahead for the third week in a row. But, as I looked a little deeper – the TSX Venture Exchange seems to be gaining momentum and with a weekly gain of 2.58%, was not only the best performing index, it finished the week just under the psychologically important level of 600. This is the second time in a year that the venture has approached 600. The main difference is that last year it was approaching 600 from above and on its way to a multi-year low of 507. This time, the Venture was attempting to through break the 600 level from below and hopefully on its way to higher highs to come.

The way I see it markets, just like the ocean, move in waves. And while it is not proven scientifically, it is believed by wave watchers such as surfers that waves tend to come in groups of seven and they build one upon the other with each wave growing in size and momentum until the 7th, which is usually the largest and most powerful of the set. Similarly, markets tend to move in waves with each wave building upon the last until there is a peak or blow off. The lowly Venture Exchange has seen 5 upward waves and 4 corrections from that low last November. These waves seem to be gaining momentum led by the broad based rising prices of uranium, crude oil, natural gas, gold, silver and now copper, zinc and nickel. Is the current wave to 600 the largest and last? Or, as the wave watchers think, are there still more bullish waves to higher levels to come? No one knows for sure, but for now it seems – surfs up!

Copper continued its recent trend from lower left to upper right with the red metal reaching a new 2-year closing high of US$5.08 a pound.

Which helped Taseko Mines Ltd. ‘TKO-T’ & ‘TGB-N.A’ stock to climb to a new all-time 12-year closing high of $4.00 and Capstone Copper Corp. ‘CS-T’ to close at a new all-time high of $11.20.

Hudbay Minerals Inc. ‘HBM-T & N’ shares’ surged higher by $1.69 or 14.06% to close at a new 13-year high of $13.71 after the Toronto, ON copper/gold miner’s 1st-quarter production and financial numbers beat most analyst expectations.

Sprott Inc. ‘SII-T’ announced plans to launch the Sprott Physical Copper Trust.

Zinc rose to close at a new 11/4-year high of US$1.38 a pound.

Which no doubt helped giant copper/zinc miner Teck Resources Ltd. ‘TECK.B-T’ & “TECK-N’ stock to close at a new all-time high of $73.22.

Silver reached a new 11-year closing high of US$31.49 and gold bullion rose to close at a new all-time high of US$2,414.

Precious metal miners continued to attract investor interest with Endeavour Silver Corp. ‘EDR-T’ & ‘EXK-N’ shares closing at a new 1-year high of $5.25 and IAMGOLD Corporation ‘IMG-T’ & ‘IAG-N’ shares’ reaching a new 4-year closing high of $6.17.

The board of directors of New Gold Inc. ‘NGD-T’ & ‘NGD-N.A’ placed a bet on their future by purchasing an additional 26.1% of the company’s flagship New Afton Mine from the Ontario Teachers’ Pension Plan for an all-cash purchase price of $255-million. This gives the Toronto, ON based miner an 80.1% interest in the historic copper/gold mine near Kamloops, BC.

Orla Mining Ltd. ‘OLA-T’ & ‘ORLA’N’ shares’ gained $0.48 or 9.21% to $5.69 after the Vancouver, BC based gold miner impressed the street with its 1st-quarter production and financial figures.

Nickel rose to close at a new 10-month high of US$9.61 a pound.

Natural gas rose to a new 4-month closing high of US$2.63 per million British thermal units (MMBtus).

Which no doubt helped the price of Birchcliff Energy Ltd. ‘BIR-T’ stock to rise to a new 4-month closing high of $5.96 after the Calgary, AB natural gas & oil producer released favourable 1st-quarter production and financial figures and better yet – forecast an upbeat guidance for the rest of 2024.

This as the industry standard Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs rose by 1-rig in the past week to 604, down by 116 rigs from this time last year. Up north – the number of Canadian active rigs dropped by 2-rigs to 114, up by 29-rigs from one year ago.  

Asahi Kasei Corporation announced the Japanese multinational company would build a $1.6-billion electric vehicle (EV) battery separator plant in Port Colborne, Ontario, estimated to be in operation by 2027.

Meanwhile, Patriot Metals Inc. ‘PMET-T’ and lithium industry giant Albemarle Corporation ‘ALB-N’ mutually agreed not to extent their 9-month Memorandum of Understanding (MOU) to develop Patriot’s Corvette lithium project in Quebec.

Albemarle may wish to rethink that decision as Patriot’s stock rose by $0.36 or 4.42% to 8.50 after drill hole CV24-405 reported 122.5-metres (m) of 1.42% lithium oxide (Li2O) from the company’s CV5 zone at Corvette.

Some lithium issues continued to win back investor confidence with Standard Lithium Ltd. ‘SLI-V’ & ‘SLI-N.A’ shares’ closing at a new 3-month high of $2.60.

NFI Group Inc. ‘NFI-T’ stock rose by $0.56 or 3.61% to $16.06 after the Winnipeg, MB transit bus manufacturer announced the sale of 33 of the company’s next-generation Xcelsior CHARGE NGtm 40-foot battery electric buses (BEBs).

Forest stocks continued to be out of favour with Doman Building Materials Group Ltd. ‘DBM-T’ falling to a new 4-month closing low of $7.21.

Uranium issues caught a bid late in the week as – Denison Mines Corp. ‘DML-T’ & ‘DNN-N’ closed at a new 13-year high of $3.06 and industry giant Cameco Corporation ‘CCO-N’ & ‘CCJ-N’ rose to close at a new all-time high of $72.21.

The TSX Venture Exchange rose to close at a new 9-month high of 615 and trading volumes reached 74.58-million shares a day, and the TSX Composite closed at a new all-time high of 22,465.

Down south – the Dow 30, S&P 500 and NASDAQ rose to respective new all-time closing highs of 40,004, 5,308 and 16,742.

Meanwhile, going the other way – the CBOE Volatility Index or VIX fell to a new 3-month closing low of 12.41.

Natural gas and silver were the commodities that performed the best over the week, while lithium and uranium underperformed the most.

All five North America American markets were in the black going into the weekend as U.S. inflation figures hinted that interest rates may start to come down sooner than later.

For the Week – the DJI gained 1.24% to 40,004, while the S&P 500 rose 1.53% to 5,303, and the NASDAQ gained 2.11% to 16,686. In Canada the TSX gained 0.70% to 22,465 and the TSX Venture rose 3.02% to 615. The CBOE Volatility Index or VIX fell 4.46% to 11.99.

With currencies – the Canadian dollar gained 0.44% to US$0.7346, while the U.S. dollar ‘DXY’ fell 0.77% to 104.49.

With commodities – gold bullion rose 2.29% to US$2,414, as silver gained 11.83% to US$31.49, and copper rose by 9.25% US$5.08, while lithium lost 4,51% to US$14,587. Crude oil gained 2.30% to US$80.00, as natural gas rose 16.89% to US$2.63, while uranium fell 2.79% to US$90.65. With soft commodities – lumber rose 8.42% to US$528. Overall – the CRB Commodities Index was unchanged at 338.

And Finally – as the electric vehicle (EV) market matures, The Automotive News reports there are three main things that potential EV buyers are looking for – a 20-minute charging time, a 350-mile or 563-kilometre driving range, and a new EV to cost US$50,000.

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