‘That’s a Wrap’
By Rod Blake
As last week’s market action was wrapping up, it seemed that most of the media market pundits’ attention was focused on the whether or not the major American markets would hold or give up their impressive year to date gains. As for me – a retired broker who made a good portion of his living from junior stocks – I was focused on the TSX Venture Exchange as it tested its year to date and multi-year lows.
The way I see it – On a weekly chart and at a level of about 580, the lowly Venture Exchange has pretty much given back any of the meager gains it achieved during this frustrating year. But, looking at a yearly chart, one can clearly see that save for a short Covid-19 induced spike lower in early 2020, this is the third time since 2016 that the Venture has settled at about this level. As a broker and amateur chartist, long-term base building and multiple bottom testing were something I looked for as a sign that a stock, commodity or in this case an index may be poised to make a significant move higher. The theory being that the longer the base and the great number of bottom tests – the greater in time and magnitude of the expected measured move higher. So, while as disappointing as 2023 may have been for most junior stock investors – should the Venture once again bounce up from this level for a third time, it may bode well for a significant junior bull market to come.
First Quantum Minerals Ltd. ‘FM-T’ shares’ rose by $1.36 or 4.02% to $35.19 after the Toronto, ON based miner and its workers managed to avoid a labour strike at the company’s Cobre Panama copper mine in that Central American country.
Uranium stocks continued their market leadership with Fission Uranium Corp. ‘FCU-T’ reaching a new 6-month closing high of $0.89 a share, while NexGen Energy Ltd. ‘NXE-T&N’ closed a new all-time high of $8.43 and industry giant Cameco Corporation ‘CCO-T’ & ‘CCJ-N’ rose to a new 16-year closing high of $54.52.
No doubt helping this group was the price of Uranium that rose to a new 17-month high of US$62.00 a pound.
The price of crude oil rose to a new 10-month high of $91.03 a barrel after OPEC warned of Saudi and Russian production deficits of some 3-million barrels per day.
All of which helped petroleum service company Trican Well Service Ltd. ‘TCW-T’ reach a new 53/4-year closing high of $5.24 a share and oil sands giant Cenovus Energy Inc. ‘CVE-T&N’ to close at a new 10-month high of $28.15.
Trans Mountain Corporation warned that the ‘Pipeline Expansion’ to the west coast could be delayed by a further 9-months to December 2024 if regulators don’t soon approve an alternate route for the pipeline through difficult terrain south of Kamloops, BC. A hearing with The Canadian Energy Regulator is scheduled for next week in Calgary.
The influential Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs rose by 9-rigs over the past week to 641, down by 122 from this time last year. In Canada – the number of active rigs rose by 8-rigs to 190, down by 21 from a year ago.
Sigma Lithium Corp. ‘SGML-V’ share price soared up by $5.97 or 13.72% to $49.48 after the Vancouver, BC based mineral developer received multiple strategic proposals regarding the company and its flagship Grota do Cirilo Lithium Project in Brazil.
This as the price of lithium fell to a new 3-month low of US$ 25,602 per tonne.
From the time I was a young mining technologist running a drill program that was lucky enough to discover a significant ore body (Afton, 1972), I’ve always been intrigued how mother nature will sometimes give up some exceptionable drill holes. The latest I noticed was from Arizona Sonoran Copper Co. Inc. ‘ASCU-T’ which reported a number of diamond drill hole assays including 194.8 metres grading 1.37% copper from the mineral developer’s Parks/Salyer deposit in Arizona.
Taseko Mines Ltd. ‘TKO-T’ & ‘TGB-N.A’ stock surged up by $0.22 or 12.36% to $2.00 after the Vancouver, BC based miner announced the company had received a final Underground Injection Control Permit for its Florence Copper Project near Florence, AZ.
The price of Victoria Gold Corp. ‘VGCX-T’ shares’ rose by $0.20 or 3.16% to $6.52 after the Whitehorse, YT based miner added to its Yukon gold rich ground by acquiring the past producing Brewery Creek Mine and other Yukon mineral properties from Sable Gold Mines Corp. ‘SGLD-T’ for a cash and stock purchase price of some $13.5-million.
The U.S. dollar as measured by the Dollar Index or DXY rose to a new 6-month high of 105.40.
The CRB Commodity Index rose to a new 14-month high of 326.
The TSX Venture Exchange fell to a new 8-month closing low of 577 while conversely – the TSX Composite Index rose to a new 5-month closing high of 20,622.
Crude oil and Uranium were the resources with the most notable gains going into the weekend while lithium was the laggard.
For the Week – the DJI gained 0.12% to 34,618 while the S&P 500 lost 0.16% to 4,450 and the NASDAQ fell by 0.39% to 13,708. Across the line – the TSX gained 2.72% to 20,622 and the TSX Venture rose 1.72% to 591. The CBOE Volatility Index or VIX rose by 0.43% to 13.90.
With currencies – the Canadian dollar gained 0.85% to US$0.7392 and the U.S. dollar ‘DXY’ rose by 0.26% to 105.34.
With commodities – gold bullion gained 0.21% to US$1,923, and silver rose 0.39% to US$23.01, as copper improved by 1.90% to US$3.76, while lithium fell 5.92% to US$25.615. Crude oil gained 4.27% to US$91.03 as natural gas rose 1.15% to US$2.65, and uranium gained 2.06% to US$62.00. With soft commodities – lumber lost 1.38% to US$500. Overall – the CRB Commodities Index was up by 1.88% at 326.
One Last Thing – It’s widely known that governments are not usually the best at forecasting and keeping budgets, but this one by the Canadian federal government really breaks the mold. Earlier this year when the feds announced $28.2-billion in electric vehicle (EV) production subsidies to Volkswagen ($13.2b) and Stellantis ($15b), they proudly announced the subsidies would be paid back via taxes in just 5-years. In fact, now that the Parliamentary Budget Office has looked at the numbers – it looks like it will actually take some 20-years before Canadian taxpayers will break even from the taxes generated by these two EV endeavours.
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