A Weekly Recap of All Things Resources to Friday, October 13th

‘That’s a Wrap’

By Rod Blake

In reviewing last week’s market activity, one thing stood out amongst all of the rest – and that was the total collapse of the TSX venture Exchange. While it is clear that the North American markets are correcting, with the Dow, S&P 500 and NASDAQ sagging to respective 3-month closing lows of 33,002, 4,229 and 13,059, and the TSX Composite at an 11-month closing low of 19,021 – the lowly Venture plunged by 4.5% in one week to a new 31/2-year closing low of 528.

The way I see it – While 528 is an ugly level for the Venture, it has still not broken this long-term support level going back to 2016. Except for the Covid-19 induced panic in early 2020, this is now the third time that the Venture has tested this critical support level. Twice the Venture has bounced from this level, and I will be watching closely to see if it can do it again. We’re coming into tax loss season, which is historically not kind to the Venture and could induce more pressure. I would suggest there are some very oversold stocks of good companies on the beleaguered Venture Exchange and most likely there are more to come. But should the venture hold at or near this level – then a significant New Year’s rally may well be in the works. Bottom fishing anyone? 

During the week – Calibre Mining Corp. ‘CXB-T’ shares’ rose by $0.10 or 7.75% to $1.39 after the Vancouver, BC based junior miner reported better than expected 3rd-quarter total production of 73,485 ounces of gold from the company’s mines in Nicaragua and Nevada.

Similarly, the closing share price of Vancouver’s SilverCrest Metals Inc. ‘SIL-T’ & ‘SILV-N.A’ gained $0.35 or 5.65% to a close of $6.54 after the reporting improved 3rd-quarter tonnage production from the company’s Las Chispas Operation in Sonora, Mexico. 

Going the other way – Torex Gold Resources Inc. ‘TXG-T’ stock fell by $1.29 or 8.76% to end the day at $13.44 after the Toronto, ON based miner’s 3rd-quarter production figures fell short of investors’ expectations.

Osisko Development Corp. ‘ODV-T & N’ reported receiving the very important Environmental Assessment (EA) Certificate for the Montréal, QC based mineral developer’s Cariboo Gold Project near Wells, BC.

The shareholders of Australia’s Newcrest Mining Ltd. ‘NCM-A & T’ and Americas Newmont Corporation ‘NEM-N’ both voted in favour of the previously announced US$15-billion takeover of Newcrest by Newmont, thereby adding to Newmont’s stature as the world’s largest gold producer. 

Lundin Gold Inc. ‘LUG-T’ shares rose by $1.32 or 8.67% to close at $16.55 after Toronto, ON based miner pleased the street with 3rd-quarter gold production from the company’s prized Fruta del Norte mine in southeast Ecuador.

The stock price of Dakota Gold Corp. ‘DC-N’ rose by $0.16 or 5.95% to close at US$2.85 after the Lead, SD based mineral developer locked in a US$17-million investment from Orion Mine Finance.

Exxon Mobil Corporation ‘XOM-N’ announced the giant American integrated energy company was taking over Pioneer Natural Resources ‘PXD-N’ in an all-stock deal valued at some US$59.5-billion that will more than double Exxon’s Permian Basin production to about 1.3-million barrels of oil equivalent per day (moebd).

Canadian petroleum production giants Cenovus Energy Inc. ‘CVE-T & N’ shares’ rose to a new 11-month closing high of $28.81 and Canadian Natural Resources Ltd. ‘CNQ-T & N’ closed at a new all-time high of $91.09.

This as the price of Natural gas rose to a new 9-month high of US$3.39 per 1-million British Thermal Units (mmbtus).

The key Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs rose by 3-rigs over the past week to 622, down by 147 from this time last year. Up north – the number of Canadian active rigs increased by 13-rigs to 193, down by 23 from a year ago. 

And with must be seen as a setback for Canada’s federal Liberal government – the Supreme Court of Canada ruled (5 – 2) that the controversial federal Impact Assessment Act or Bill C-69, introduced in 2019 and – nicknamed by some as “The No More Pipelines Bill” – which regulates natural resource projects in the provinces, exceeded the bounds of the federal government’s traditional jurisdictions and was therefore on balance – unconstitutional.

A recent near 13-year high in the price of uranium (US$72.75) was bound to attract new investment to that sector. As such, Denison Mines Corp. ‘DML-T’ & ‘DNN’ announced a US$55.13-million ‘Bought Deal’ financing to help advance the Toronto, ON mineral developer’s Phoenix in-situ recovery uranium operation at Denison’s Wheeler River Project in northern Saskatchewan’s Athabasca Basin.

Similarly, the price of Fission Uranium Corp. ‘FCU-T’ stock price rose by $0.07 or 8.64% to close at $0.88 after the Vancouver, BC mineral developer closed a $9.2-million ‘Bought Deal’ flow-through financing to help develop the company’s PLS uranium project also in northern Saskatchewan’s Athabasca Basin.

Crude oil and gold bullion were the resources with the most notable gains at the end of the week, while uranium and natural gas were the laggards.

For the Week – the DJI gained 0.78% to 33,670 while the S&P 500 gained 0.44% to 4,328 and the NASDAQ fell by 0.18% to 13,407. Across the line – the TSX gained 1.12% to 19,462 while the TSX Venture fell 0.94% to 529. The CBOE Volatility Index or VIX gained 10.92% to 19.32.

With currencies – the Canadian dollar improved by a modest 0.01% to US$0.7321 and the U.S. dollar ‘DXY’ rose by 0.52% to 106.66. 

With commodities – gold bullion gained 5.51% to US$1,933, and silver improved by 5.14% to US$22.70, as copper lost 1.38% to US$3.58, while lithium fell 0.05% to US$22,774. Crude oil gained 5.93% to US$87.88 while natural gas lost 3.60% to US$3.21, and uranium dropped 5.15% to US$69.00. With soft commodities – lumber rose by 2.85% to US$505. Overall – the CRB Commodities Index gained 2.88% at 321.

And Finally – As the leaves turn colour and one’s mind turns to winter recreation, some like to enjoy these activities at Whistler, BC. And while Whistler is known as a ‘high-end’ resort, this transaction seems to reach another level of opulence. It seems someone or persons recently purchased an underground parking spot close to the lifts for – now wait for it….$195,000.