A Weekly Recap of All Things Resources to Friday, September 8th
‘That’s a Wrap’
By Rod Blake
As the brokers, investors, portfolio managers and traders opened their terminals following the Labour Day long weekend, they did so with a combined sense of complacency and relief in that – save for the TSX Venture Exchange – the major North American markets were well ahead on the year. And, except for a few days of banking issues in March, the markets had steadily climbed the worries if higher interest rates, continued war in Ukraine and perceived recessions. Even the CBOE Volatility Index or VIX was at a 3-year low of 13.09. Now, with only 4-months left in the year – what could possibly go wrong?
The way I see it – September could go wrong, and perhaps October as well. Historically, these two months often combine to be the worst market performance period of the year. In fact, the current market rally started when the markets bottomed last October. Also, September and October have been known to see some of the market’s worst sudden downdrafts. As a young broker, I can clearly remember the Black Monday market crash of October 19th, 1987 and years later, the horrific 9/11/2001 World Trade Centre attack on New York City that shook investor confidence. With four months to go – nothing is a sure thing.
Enbridge Inc. ‘ENB-T & N’ becomes North America’s largest natural gas utility after the Calgary, AB based energy company announced a US$14-billion cash & debt purchase of three of Dominion Energy Incorporation’s ‘D-N’ U.S. weighted subsidiaries.
Similarly – Calgary’s Peyto Exploration & Development Corp. ‘PEY-T’ purchased the Alberta Deep Basin petroleum assets from Spain’s Repsol Canada Energy Partners for an all-cash price of some US$468-million.
This as the price of crude oil rose to a new 9-month high of US$87.78 a barrel.
All of which helped the stock of producer Crescent Point Energy Corp. ‘CPG-T&N’ to close at a new 15-month high of $11.57 – Â and service company Trican Well Service Ltd. ‘TCW-T’ to reach a new 53/4-year closing high of $5.22 a share.
The closely followed Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs rose by 1-rig over the past week to 632, down by 127 from this time last year. Across the line – the number of Canadian active rigs dropped by 5-rigs to 182, down by 23 from a year ago.
Century Lithium Corp. ‘LCE-V’ announced the Vancouver, BC based mineral developer had received a provisional patent for the company’s Lithium Extraction Facility in Amargosa Valley, Nevada. The patent pertains to the handling of solutions derived from clays at the company’s Clayton Valley Lithium Project in Nevada.
This as the price of lithium fell to a new 3-month low of US$27,227 per tonne.
The price of uranium rose to a new 17-month high of US$60.75 a pound.
All of which helped the price of NexGen Energy Ltd. ‘NXE-T&N’ stock to a new 16-month closing high of $7.60 a share and giant uranium producer Cameco Corporation ‘CCO-T’ & ‘CCJ-N’ to close at a new 16-year high of $50.82.
Northern Dynasty Minerals Ltd. ‘NDM-T’ & ‘NAK-N’ shares’ rose by $0.05 or 13.51% to $0.42 after the Vancouver, BC based mineral developer released an updated positive independent technical report on the company’s beleaguered giant Pebble Project in Southwest, Alaska.
Shares’ of Major Drilling Group International Inc. ‘MDI-T’ fell by $0.27 or 3.10% to $8.45 after the Moncton, NB based mineral drilling company’s 1st-quarter financials failed to exceed those of one year prior.
Liberty Gold Corp. ‘LGD-T’ released encouraging reverse circulation drill hole gold assays including 0.61 grams per tonne (g/t) over 76.2 meters from the Vancouver, BC based company’s Black Pine Oxide Gold Project (Black Pine) in southeastern Idaho.
West Fraser Timber Co. Ltd. ‘WFG-T&N’ announced the Vancouver, BC based forest giant had agreed to purchase Cochrane, Alberta’s Spray Lake Sawmills in an all-cash deal of some $140-million.
The CRB Commodity Index rose to a new 1-year high of 320.
Boralex Inc. ‘BLX-T’ along with its Innu community First Nations partners secured a $608-million financing from a banking syndicate with the funds going towards development of their 200-megawatt (MW) Apuiat wind farm on Quebec’s North Shore.
Uranium, lumber and crude oil were the notable resources with gains going into the weekend.
The TSX Venture Exchange fell back to test its 8-month low of 581.
For the Week – the DJI lost 0.75% to 34,577 with the S&P 500 down 1.31% to 4,457 and the NASDAQ off by 1.92% to 13,762. Up north – the TSX lost 2.29% to 20,075 and the TSX Venture fell 1.86% to 581. The CBOE Volatility Index or VIX rose by 5.73% to 13.84.
With currencies – the Canadian dollar lost 0.31% to US$0.7330 while the U.S. dollar ‘DXY’ rose by 0.78% to 105.07.
With commodities – gold bullion lost 1.13% to US$1,919, while silver fell 5.21% to US$22.92, as copper dropped by 2.89% to US$3.69, and lithium fell 1.77% to US$27,227. Crude oil gained 1.84% to US$87.30 while natural gas fell 5.07% to US$2.62, and uranium rose by 3.85% to US$60.75. With soft commodities – lumber gained 0.80% to US$507. Overall – the CRB Commodities Index was up by 0.31% at 320.
And Finally – One has to wonder why do they do it? Case in point – The Sports Institute of Mexico City has just disqualified about 3,000 or 10% of the 30,000 runners who took part in the recent Mexico City Marathon for cheating by taking cars or public transit for a portion of or to finish the race.