A Weekly Recap of All Things Resources to Friday, November 3rd

‘That’s a Wrap’

By Rod Blake

While the majority of the investors, brokers, traders and portfolio managers were once again disappointed with yet another week of negative markets, there was a small group that were suddenly optimistic. Those few that followed junior resource issues and especially gold or gold securities that trade on the TSX Venture Exchange saw gold suddenly rise above US$2,000 last Friday and the lowly Venture Exchange jump up by almost 1% to end the week flat as opposed to its very negative counterparts.

The way I see it – There are very few times when the TSX Venture outperforms the other major North American markets. This is usually when there has been a major new mineral discovery and resulting area play such as Hemlo gold in 1982 and Lac de Gas diamonds in 1991, or when a new product such as marijuana in 2015 – captures speculators’ interest, or when a commodity such as gold breaks out of a trading range and moves to new highs. Gold bullion, while not yet at a new high, is close. Gold has gained about $175 in the past 3-weeks, and at last Friday’s close of US$2,006, is now only some $70 or 3.5% below the yellow metal’s all time high of US$2,075 set in August of 2000. Little wonder gold is garnering some long overdue attention. Now granted, this sudden rise in gold coincides with the current Israel/Hamas conflict, just as it surged when Russia invaded Ukraine in early 2022. And just like then, it may fail once again to reach new highs. However, this is the fourth time gold has pushed up through this $2,000 resistance level in the past 3-years. Fourth time lucky? Right now, there is a small group of investors thinking this might be the time. Plus, gold is approaching its traditional New Year’s season of strength. Should gold finally break through to new highs, this small group will grow exponentially, and the lowly Venture Exchange will not be so lowly anymore.

The trading week started on a negative note in the mineral sector –

First, the price of First Quantum Minerals Ltd. ‘FM-T’ shares’ plunged $7.96 or 28.47% to a three-year low close of $20.00 after the government of Panama conceded to protestor demands and announced the country will hold a public referendum to decide if the Toronto, ON abased miner’s previously approved 20-year mining concession, for the company’s Cobre Panamá copper mine, will go ahead or not.

Lithium continued to be a conundrum for investors, as just when demand for electric vehicles is said to be high – the price of lithium fell to a new 6-month low of US$22,274 a tonne.

All of which helped to pull the share price of lithium industry giant Albemarle Corporation ‘ALB-N’ down to a new 3-year closing low of US$122.88 a share.

And the low price of lithium didn’t help the junior markets either, as the TSX venture Exchange fell to a new 31/2-year low of 513.

Meanwhile, the Canadian dollar fell to a new 1-year low of US$0.7205.

Tuesday was a good day for Saskatchewan mineral interests as BHP Group ADR ‘BHP-N’ doubled the global mining giant’s investment in potash by approving a $6.4-billion Stage 2 expansion of the company’s Jansen potash project east of Saskatoon, SK.

And then the share price of Cameco Corporation ‘CCO-T & ‘CCJ-N’ rose by $4.37 or 8.35% to a 161/2-year closing high of $56.73 after the Saskatoon, SK based uranium giant 3rd-quarter financial report handily beat the streets’ expectations.

The price of uranium rose by another dollar to a new 151/2-year high of US$74.00 a pound.

All of which helped the price of Fission Uranium Corp. ‘FCU-T’ stock to close at a new 11-month high of $0.95.

Pine Cliff Energy Ltd. ‘PNE-T’ stock rose by $0.10 or 6.94% to $1.54 after the Calgary, AB based natural gas focused producer increased its land and resource position with the purchase of privately held Certus Oil & Gas Inc. for an all-cash price of $100.0-million.

TC Energy Corp. ‘TRP-T&N’ shares’ rose by $0.75 or 1.59% to $48.52 after the Calgary, AB based energy giant announced the long awaited Coastal GasLink pipeline – is physically complete. The 750 kilometre long pipeline will transport natural gas from Northeast British Columbia and Northern Alberta to the LNG Canada liquefaction facility currently under construction near Kitimat, BC.

The price of Athabasca Oil Corp. ‘ATH-T’ stock increased by $0.09 or 2.18% to $4.21 after the Calgary, AB based petroleum company’s 3rd-quarter financials revealed record Adjusted Funds Flow and Free Cash Flow.

The share price of Calgary, AB based petroleum giant Canadian Natural Resources Ltd. ‘CNQ-T & N’ rose to a new all-time closing high of $93.29.

This as the key Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 7-rigs over the past week to 618, down by 152 from this time last year. Up north – the number of Canadian active rigs was unchanged at 193, down by 13 from a year ago.

Centerra Gold Inc. ‘CG-T’ & ‘CGAU-N’ stock rose by $0.64 or 9.08% to close at $7.69 after the Toronto, ON based miner’s 3rd-quarter financials handily beat analysts’ expectations.

Shareholders of Toronto, ON based senior gold producer, Kinross Gold Corp. ‘K-T’ & ‘KGC-N’ saw the price of their investment rise to a new 11/2-year closing high of $7.58.

And the price of Taseko Mines Ltd. ‘TKO-T’ & ‘TGB-N.A’ shares’ gained $0.04 or 2.70% to close at $1.52 after the Vancouver, BC based miner announced that due to no objections, the company’s final Underground Injection Control (UIC) permit for its Florence Copper project in Arizona was now in effect. The permit allows the underground injection project to proceed to production.

TransAlta Corporation ‘TA-T’ &’TAC-N’ stock rose by $0.34 or 3.28% to $10.72 after the Calgary, AB based power company expanded its Alberta and British Columbia power footprint by announcing a $658-million cash & debt purchase of fellow utility, Heartland Generation.

Lumber and uranium were the commodities with the greatest gains at the end of the week, while crude oil and gold bullion were down the most.

The North American markets rallied for the second half of the week after the U.S. Fed once again left interest rates unchanged for the second meeting in a row.

For the Week – the DJI gained 5.07% to 34,061 with the S&P 500 up 5.85% to 4,358 and the NASDAQ ahead by 6.60% to 13,478. Across the line – the TSX gained 5.81% to 19,825 and the TSX Venture rose 0.77% to 521. The CBOE Volatility Index or VIX fell 29.90% to 14.91.

With currencies – the Canadian dollar gained 1.46% to US$0.7315 while the U.S. dollar ‘DXY’ fell 1.39% to 105.09.

With commodities – gold bullion lost 0.70% to US$1,992, while silver gained 0.39% to US$23.20, and copper gained 1.10% to US$3.66, while lithium lost 0.01% to US$22,435. Crude oil lost 4.79% to US$80.96 while natural gas rose by 1.16% to US$3.49, and uranium gained 1.37% to US$74.00. With soft commodities – lumber gained 3.67% to US$508. Overall – the CRB Commodities Index lost 0.93% to 320.

One Last Thought – The weight of higher interest rates and an uncertain world seems to be weighing on the public’s perception of the future, as a recent poll commissioned by the Association of Canadian Studies found that -“Millennials do not feel they’re going to do as well as Baby Boomers and the Baby Boomers seem to concur”. That outlook on life seems somehow sad…