A Weekly Recap of All Things Resources to Thursday, March 28th

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‘That’s a Wrap’

By Rod Blake

Last week, those brokers, investors, and portfolio managers who mainly hold Index exchange traded funds (ETF) were once again vindicated as all of the major North American markets shook off two weeks of uncertainty and once again forged upward to new all-time highs. This unique investment has become a market darling, working almost continually for the past 5-months as investors buy more and more index ETFs as central bankers signal that their efforts to break the back of inflation seems to be working. It’s a very simple and so far effective investment theory with some markets such as the NASDAQ up some 30% from its October lows. No need to pick a stock. Just buy and hold the index and let the central bankers lead the market higher on your behalf. No muss, no fuss.

The way I see it – There’s a saying in poker circles that goes something like “If you’ve been in the game for 30-minutes and you don’t know who the patsy is, you’re the patsy.” The patsy being someone who is easily taken advantage of. I’ve been in the markets long enough to know that they are mostly random. That is, the indexes are made up of companies that add or subtract to the performance of the index based on their individual value. Indexes tend to ebb and flow based on the accumulative random effects of these companies. Over time, the indexes tend to go up because the underlying economy allows most companies to be successful over time, with investors paying accordingly to participate in their success. Now we have this trendy new investment phenomenon that the markets continually go up, not so much because of company performance, but because the central bankers will provide an easy path to prosperity with no end in sight. No research or insight needed. Just buy the index, hold and prosper. Take a good look at the players at your investment table. Do you know who the patsy is?

Taseko Mines Ltd. ‘TKO-T & ‘TGB-N.A’ stock rose by $0.18 or 6.67% to $2.88 after the Vancouver, BC based copper miner agreed to buy the remaining 12.5% of the company’s flagship Gibralter Mine near Williams Lake, BC form partners Dowa Metals & Mining Co. Ltd. and Furukawa Co., in a $117-million all-cash deal payable over 10-years.

Meanwhile, Toronto, ON based Hudbay Minerals Inc. ‘HBM-T & N’ shares’ improved by $0.10 or 1.07% to close at $9.48 after Canada’s fourth largest copper producer announced the company’s copper production was expected to increase by 16% in 2024 to 153,000 tonnes. Hudbay is also the country’s fifth largest gold producer with an average annual production of some 272,500 ounces per year.

Other copper stocks continued to attract investor interest with Capstone Copper Corp. ‘CS-T’ rising to a new all-time high $8.62.

Awalé Resources Ltd. ‘ARIC-V’ shares’ surged up by $0.40 or 100.00% to $0.80 after the Vancouver, BC based junior explorer reported their diamond drill hole OEDD-83 returned 45.7grams per tonne (g/t) gold over 32 meters from the company’s Odienné Project in Côte d’Ivoire (Ivory Coast).

It is said that a good deal is when both sides come out ahead on the news. Such was the case for the shareholders’ of Alamos Gold Inc. ‘AGI-T & N’ that saw their investment rise by $1.27 or 6.88% to a close of $19.72 after the Toronto, ON based gold miner announced it was acquiring fellow Toronto based gold miner Argonaut Gold Inc. ‘AR-T’ in an all-stock deal that valued Argonaut at some $325-million. Argonaut’s stock rose $0.195 or 31.67% to close at $0.395 after the announcement of the take-over.

Gold bullion rose to a new all-time closing high of US$2,220 a troy ounce (t oz.).

Which no doubt helped the price of Kinross Gold Corp. ‘K-T’ & ‘KGC-N’ to reach a new 21/3-year closing high of $8.37 and Eldorado Gold Corp. ‘ELD-T’ to close at a new 61/2-year high of $19.04.

And the TSX Composite Index to close a new record high of 22,167.

Crude oil rose late in the week to a new 5-month closing high of US$82.98 per barrel (bbl).

Big oil continued to catch a bid with the share price of Calgary, AB based Canadian Natural Resources Ltd. ‘CNQ-T & N’ and Imperial Oil Ltd. ‘IMO-T & N’ closing at respective new all-time highs of $103.33 and $93.70.

This as the key Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 3-rigs in the past week to 621, down by 134-rigs from this time last year. Up north – the number of Canadian active rigs fell by 18-rigs to 151, up by 12-rigs from one year ago.  

Fission Uranium Corp. ‘FCU-T’ announced that the company’s 15-hole or 5,567-meter winter diamond drill program at the company’s PLS high-grade uranium project in Saskatchewan’s Athabasca Basin produced a number of highly prospective areas that will be prioritized for follow up drilling.

The S&P 500 and Dow 30 reached respective new all-time closing highs of 5,254 and 39,807.

Natural gas and crude oil were the commodities that rose the most on the week, while lithium and lumber fell the most.

Four of the five of the North American indexes were in the black going into the Good Friday shortened long weekend with only the NASDAQ off by 0.12%.

For the Week – the DJI gained 0.84% to 39,807, as the S&P 500 rose 0.38% to 5,254, while the NASDAQ fell 0.30% to 16,379. In Canada the TSX gained 0.83% to 22,167 and the TSX Venture rose 1.99% to 563. The CBOE Volatility Index or VIX fell 0.38% to 13.01.

With currencies – the Canadian dollar gained 0.44% to US$0.7382, as the U.S. dollar ‘DXY’ gained 0.12% to 104.56.

With commodities – gold bullion gained 2.54% to US$2,220, as silver rose 0.81% to US$24.86, while copper was unchanged at US$4.01, and lithium fell 6.76% to US$14,802. Crude oil gained 2.91% to US$82.98, and natural gas rose 5.42% to US$1.75, while uranium was unchanged at US$85.00. With soft commodities – lumber fell 3.46% to US$586. Overall – the CRB Commodities Index gained 0.30% to 332.

And Finally – The Alberta government has determined that it’s time for electric vehicle (EV) owners to pay their fair share of the provinces road taxes that are for the most part paid through fuel taxes. So, in that regard, EV owners will incur an annual $200 electric vehicle tax starting in early 2025.

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