A Weekly Recap of All Things Resources to Friday, November 1st

‘That’s a Wrap’

By Rod Blake

As the brokers, investors, traders and portfolio managers prepared for the last trading week of October, there was a collective sense of trepidation as the North American markets seemed to be looking for a reason to turn lower in light of their extended bull run and the uncertain outcome of the pending American federal election only one short week away.

The way I see it – Years ago we used to ride the roller coaster at the Pacific National Exhibition (PNE). Known as the largest wooden structure of its type, the roller coaster was always a thrilling and exciting ride – even though we all knew the ride in detail from beginning to end. But as thrilling as overall the ride was – there was nothing like that feeling of uncertainty as the cars slowly limbed that first monstrous hill, only to seemingly pause at the top before plummeting into the abyss below. Exciting, scary and thrilling all at the same time after time, even though we all knew what was coming and what to expect. I think this is similar to what investors are feeling today. The major North American Markets have been climbing a 2-year bull hill that never seems to reach a top. It has been a nail bighting climb, but we all know that sometime there will be a top and a resulting fall. Is this the top? No one knows so – sit tight and enjoy the ride.

The stream of companies looking to secure nuclear power continued with Aecon Group Inc. ‘ARE-T’, after the Toronto, ON based infrastructure company announced an agreement to purchase United Engineering & Constructors Inc. – a nuclear and conventional power contractor located in Mount Laurel, NJ for an all-cash purchase price of some US$33-million.

Aecon stock rose later in the week to close at a new all-time high of $27.52 on the back of a buoyant 3^rd-quarter report.

Sabre Gold Mines Corp. ‘SGLD-V’ stock surged up by $0.10 or 80.00^% to close at a new 22-month high of $0.225 after the Toronto, ON based mineral developer agreed to an all-stock and debt takeover by fellow Toronto based miner Minera Alamos Inc. ‘MAI-V’.

Lode Gold Resources Inc. ‘LOD-V’ shares’ rose by $0.10 or 50^% to $.30 after the Toronto, ON, based explorer completed its previously announced 1-for-10 stock consolidation and subsequent spin-out of subsidiary Gold Orogen.

Crude oil fell to a new 1^1/2-month closing low of US$67.31 a barrel.

The Canadian Loonie fell to close at a new 4^1/2-year low of US$0.7164.

Lumber rose to close at a new 6^1/2-month high of US$556 per 1,000 board feet (mbf).

Gold bullion continued its blue-sky climb by closing at a new all-time high of US$2,785 a troy ounce (toz).

Which certainly helped Kinross Gold Corp. ‘K-T’ & ‘KGC-N’ to reach a new 13-year closing high of $14.90 and Agnico Eagle Mined Ltd. ‘AEM-T & N’ to close at a new all-time high of $123.74.

Silver issues also caught a bid with –

Endeavour Silver Corp. ‘EDR-T’ & ‘EXK-N’ and MAG Silver Corp. ‘MAG-T & N.A’ to close at respective new 3-year highs of $7.72 and $25.04.

Trican Well Services Ltd. ‘TCW-T’ stock rose by $0.25 or 5.83^% to $4.54 after the Calgary, AB based company pleased the street with it 3^rd-quarter financials.

Secure Energy Services Ltd. ‘SES-T’ shares’ gained $1.36 or 9.88^% to a new 9^1/2-year closing high of $15.13 after the Calgary, AB based energy infrastructure company impressed investors with its 3^rd-quarter financials.

This as the closely followed Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs was unchanged in the past week at 585, down by 33-rigs from this time last year. Up north – the number of Canadian active rigs fell by 3-rigs to 213, up by 17-rigs from one year ago.  

Interest rate sensitive utility TransAlta Corp. ‘TA-T’ & ‘TAC-N’ climbed to a new 2^1/4-year closing high of $14.60.

Lithium issues also drew some investor interest with –

Lithium Americas Corp. ‘LAC-T & N’ shares climbing to close at a new 6-month closing high of $6.31 after the company announced the closing of a US$2.26-billion loan from the U.S. Department of Energy (DOE) to help facilitate the construction of the Thacker Pass lithium project in Humboldt County, Nevada.

Standard Lithium Ltd.  ‘SLI-V & N.A’ shares rose to close at a new 1-year high of $3.45 after the Vancouver, BC based developer announced a licensing agreement with Koch Technology Solutions LLC to deploy Koch’s Lithium Selective Sorption (“Li-Pro LSS”) technology.

The NASDAQ Exchange rose to close at a new all-time high of 18,713.

Lumber and natural gas were the best performing commodities on the week, while silver and crude oil were off the most.

The North American equity markets went decisively negative on Thursday, only to recover somewhat on Friday to enter the weekend on a positive note.

For the Week – the DJI lost 0.15^% to 42,052, with the S&P 500 off 1.36^% to 5,729, and the NASDAQ down 1.51^% to 18,240. Across the line – the TSX fell 0.85^% to 24,255 and the TSX Venture lost 2.58^% to 604. The CBOE Volatility Index or VIX rose 7.62^% to 21.88.

With currencies – the Canadian dollar fell 0.43^% to US$0.7164, while the U.S. dollar ‘DXY’ rose 0.02^% to 104.34. 

With commodities – gold bullion lost 0.40^% to US$2,734, as silver fell 3.38^% to US$32.49, while copper was unchanged at US$4.33, and lithium gained 1.33^% to US$10,155. Crude oil fell 3.02^% to US$69.46, while natural gas gained 4.74^% to US$2.65, and uranium lost 2.74^% to US$79.75. With soft commodities – lumber gained 4.91^% to US$556. Overall – the CRB Commodities Index fell 0.89^% to 334.