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‘That’s a Wrap’

By Rod Blake

As the brokers, investors, portfolio managers and traders shut down their terminals last Friday afternoon, they were left to wonder if last weeks across the board index gains were the end of the previous 3-week market turndown and the start of another “buy the index” bull market or, was it just an “oversold relief rally” in front of more pain to come.

The way I see it – While last week’s North American index gains were good to see – one index, to me, stood out from the rest. The TSX Venture Exchange is close to becoming the leader of the pack. Not only did the  Venture Exchange gain some 3.53% last week – but the lowly junior board, with a year to date gain of 6.09%, is essentially tied with the 6.11% 2024 gain of the artificial intelligence (AI) overloaded NASDAQ, and less than a percentage point behind the North American leading big cap S&P 500 Index’s year to date gain of 6.92%, and well ahead of the TSX Composite’s 4.82% and Dow 30 1.46% 2024 gains. Who new? If you weren’t paying attention this surprising upturn would go unnoticed as the mainstream media certainly isn’t following this story. We used to have a slogan – “Sell in May and go away” as the TSX Venture, more than the other North American indexes, usually had a very negative rest of the year. Perhaps now, if the Venture can continue to outperform, the slogan will become – “Stay in May and play”.

Last week’s outperformance in copper issues carried over into the new week with:

Hudbay Minerals Inc. ‘HBM-T & N’ climbing to a new 6-year closing high of $12.03, with Taseko Mines Ltd. ‘TKO-T’ & ‘TGB-N.A’ closing at a new 14-year high of $3.62, and

Ivanhoe Mines Ltd. ‘IVN-T’ reaching a new all-time closing high of $20.62. This, as the price of copper rose to a new 2-year closing high of US$4.68 a pound.

Staying with base metals – zinc closed at a new 1-year high of US$1.34 a pound.

Lundin Mining Inc. ‘LUN-T’ and Teck Resources Ltd. ‘TECK.B-T’ & ‘TECK-N’, two base metal miners with exposure to copper and zinc, rose to respective new all-time closing highs of $16.48 and $69.77.

Gold remained below its recent all-time high, but investor enthusiasm for gold issues continued, with Franco Nevada Corp. ‘FNV-T & N’ reaching a new 5-month closing high of $168.58, as Agnico Eagle Mines Ltd. ‘AEM-T & N’ and Kinross Gold Corp. ‘K-T’ & ‘KGC-N’ closed at respective new 3-year highs of $89.94 and $9.35, while Alamos Gold Inc. ‘AGI-T & N’ and rose to a new all-time closing high of $21,12.

Solitario Resources Corp. ‘SLR-T’ & ‘XPL-N.A’ saw its stock price rise by $0.15 or 16.67% to $1.05 after the Denver, CO mineral developer received United State Forest Service (USFS) approval for drilling on the company’s flagship Golden Crest gold project in South Dakota.

Going the other way – Minera Alamos Inc. ‘MAI-V’ stock fell by $0.015 or 4.62% to $0.31 after the Mexican gold miner’s 2023 year end production figures and financials failed to live up to investor expectations.

Meanwhile – New Gold Inc. ‘NGD-T & N’ shareholders were pleased to watch their investment rise by $0.23 or 9.66% to an new 3-year high close of $2.61 after the Toronto, ON based gold & copper miner released not only an upbeat 1st-quarter production & financial report, but better yet – projected increasing production guidance for the next 3-years.

IMPACT Silver Corp. ‘IPT-V’ shares fell by $0.025 or 9.09% to $0.25 after the Vancouver, BC based miner took advantage of rising silver & zinc prices to announce a very large but very dilutive $6.2-million financing to help advance the company’s prospective Plomosas zinc, lead & silver property in Chihuahua, Mexico.

Century Lithium Corp. ‘LCE-V’ shareholders were very disappointed to watch their investment plunge lower by $0.24 or 34.29% to $ 0.46 after the Vancouver, BC based mineral developer’s long awaited Feasibility Study for the company’s flagship Clayton Valley Lithium Project in west-central Nevada fell well short of market expectations.

Albemarle Corporation ‘ALB-N’ stock rose by $6.30 or 5.29% to US$125.30 after the lithium giant’s 1st-quarter financials exceeded the street’s expectations.

As an old field technologist, it’s always fun to report exceptional drill hole assays such as – Patriot Battery Metals Inc. ‘PMET-V’ reporting 126.3 meters (m) of 1.66% lithium oxide (Li20) from diamond drill hole CV24-374 taken at the company’s Corvette Property in the James Bay region of Quebec.

Forest companies continued to be out of favour as:

Weyerhaeuser Company ‘WY-N’ stock dropped to a new 51/2-month closing low of US$30.17.

While the share price of Western Forest Products Ltd. ‘WEF-T’ closed at a new 131/2-year low of $0.53.

Interfor Corp. ‘IFP-T’ announced the Burnaby, BC based forestry company would reduce its lumber production by about 10% across all of its operating regions from May to September due to current low fiber prices.

This as the price of lumber dropped to a new 6-month closing low of US$492 per 1,000 board feet (MBF).

Cameco Corporation ‘CCO-T’ & ‘CCJ-N’ stock fell by $4.72 or 6.99% to $62.81 after the Saskatoon, SK based uranium giant’s acquisition of Westinghouse created an unexpected loss in the company’s 1st-quarter financials.

Uranium companies got a lift later in the week on word that the U.S. Senate approved a bill to ban Russian uranium imports to that country. The bill also frees up US$2.7-billion to help build out America’s domestic uranium processing industry that currently gets about 12% of its uranium from Russia.

Only one day after establishing a new all-time high mentioned above and the price of Ivanhoe Mines Ltd. ‘IVN-T’ fell by $1.96 or 9.51% to $18.66 after the African copper miner surprised the market with an unexpected 1st-quarter loss of some $69-million.

Crescent Point Energy Corp. ‘CPG-T & N’ continued to outperform most petroleum issues by rising to a new 2-year closing high of $12.62.

Oil sands giant Cenovus Energy Inc. ‘CVE-T & N’ rewarded shareholders after a strong 1st-quarter by awarding a special$0.135 dividend to along with a 29% increase the company’s annual dividend to $0.72.

The Canada Energy Regulator (CER) approved the final permits for the Trans Mountain oil pipeline expansion, which clears the way for the highly anticipated pipeline to start delivering a total of 890,000 barrels of Alberta crude per day (bpd) to the port of Vancouver.

The comprehensive Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 6-rigs in the past week to 605, down by 143 rigs from this time last year. Up north – the number of Canadian active rigs rose by 2-rigs to 120, up by 27-rigs from one year ago.  

Natural Gas and uranium etched out the greatest gains in commodities over the week, while crude oil and silver lost the most.

All three American markets were ahead going into the weekend as economic indicators suggested a U.S. Fed interest rate cut may come sooner than earlier indicated, while the two-resource weighted Canadian indexes were down on the week.

For the Week – the DJI gained 1.14% to 38,676, while the S&P 500 rose 0.55% to 5,128, and the NASDAQ gained 1.43% to 16,156. In Canada the TSX fell 0.09% to 21,947 and the TSX Venture lost 0.85% to 582. The CBOE Volatility Index or VIX fell 10.19% to 13.49.

With currencies – the Canadian dollar fell 0.15% to US$0.7307, and the U.S. dollar ‘DXY’ lost 0.89% to 105.08.

With commodities – gold bullion fell 1.67% to US$2,301, while silver dropped 2.43% to US$26.55, as copper rose by 0.22% US$4.58, and lithium gained 1.06% to US$15,363. Crude oil fell 6.88% to US$77.96, while natural gas rose 12.57% to US$2.15, and uranium gained 6.56% to US$91.75. With soft commodities – lumber lost 2.34% to US$501. Overall – the CRB Commodities Index fell 4.34% to 331.

One Last Thought – It never fails to amaze how modern media can put an alarmist slant on most any event. Case in point – with this week’s long awaited start-up of the Trans Mountain pipeline expansion, along with the economic benefits of increased exports of valuable Alberta crude oil out of Vancouver’s Burrard Inlet – many reports dwelled on the premise that because there will be more tanker traffic, and because of the recent Baltimore bridge incident – there was a greater likelihood of one of the tankers striking a bridge.

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