A Weekly Recap of All Things Resources to Thursday, February 22nd

‘That’s a Wrap’

By Rod Blake

This week’s resource market commentary is shortened by two-days due to the holiday Monday and my travels on Friday to Princeton and Penticton, BC to visit family watch my grandson play hockey.

As I was typing up last week’s market summary one stat stood out and made me pause and reflect, as I couldn’t remember when I’d seen it last, if at all. What is it that would grab the attention of this retired old broker? What stood out wasn’t the price of singular resource or sector. No – what caught my attention was that both the TSX Composite and TSX Venture Exchange closed last Friday up on the week, while all three of the American major markets, Dow 30, S&P 500 and NASDAQ were down on the week.

The way I see it – Although only one week – I think this might be a signal that the markets are turning to favour the resource sector. I went back through my notes for the two years I have been writing this column and I couldn’t find another week where both of the Canadian markets were up while their American counterparts were down. What made this doubling interesting is that there doesn’t seem to be a significant resource rally going on right now, or any Canadian economic news that would draw investors attention to the TSX and Venture at this point in time. Usually, save for a major resource rally, or in the case of the Venture, a major mineral discovery or area play, the two Canadian markets tend to follow their American cousins down or up. So for them to be up on their own signals to me that perhaps investment sentiment is turning away from the current 4-month magnificent-7 artificial intelligence (IA) led rally and back to more domestic things like the minerals the world will need to produce while trying to electrify the planet. Granted, one week of resource market outperformance isn’t a rally or even a trend. But, if one week turns into two and then two into three…

Compare if you will, the stark difference of investor interest in a resource sector that is in favour – namely uranium, to one that is near completely out of favour – such as gold. Consider the fortunes of Fission Uranium Corp. ‘FCU-T’ that in one-week, recently completed a $75-million ‘Bought Deal’ (money up front) brokered financing, to those of Lode Gold Minerals Corp. ‘LOD-V’, that just filed for an extension to complete a small $1.5-million non-brokered financing announced some six-weeks earlier in early January.

One junior gold that is getting favourable investor interest is Snowline Gold Corp. ‘SGD-V’ that saw the price of its stock rise by $0.25 or 4.69% to close at $5.58 after the Vancouver, BC based mineral explorer announced the discovery of a second gold area of interest “Aurelius” some 12-kilometers north-west of the companies current “Valley” discovery in eastern Yukon.

But, also in Yukon – the market was still indifferent to Western Copper and Gold Corp. ‘WRN-T & N’, and forced the company’s stock price down to a new 31/2-year closing price of $1.29.

If having one take-over bid is good, then having two must be very good. Such was the case for the shareholders of Osino Resources Corp. ‘OSI-V’, who witnessed their investment soar up by $0.37 or 26.62% to $1.76 after the Vancouver, BC based mineral developer received a superior $1.90 all-cash takeover offer from an as yet unnamed entity. The new offer was well above a prior $1.55 cash & stock takeover proposal by Toronto, ON based Dundee Precious Metals Inc. ‘DPM-T’ just 2-months ago.

Calibre Mining Corp. ‘CXB-T’ stock rose by $0.04 or 2.65% to $1.55 after the Vancouver, BC based gold miner pleased investors with the company’s 4th-quarter and year-end 2023 financials, but better yet, raised its 2024 production forecast to 275,000 – 300,000 ounces.

Wheaton Precious Metals Corp. ‘WPN-T & N’ shares’ fell by $4.78 or 8.00% to $55.00 when the Vancouver, BC precious metals streaming company’s 2024 guidance failed to meet analysts’ expectations.

Teck Resources Ltd. ‘TECK.B-T’ and ‘TECK-N’ stock rose by $0.67 or 1.30% to close at $52.11 after Canada’s largest mining company delivered an upbeat 4th-quarter report.

And citing a need for further dialogue and input, the BC government said the province would not be proceeding with its proposed Land Act Amendments.

Methonex Corporation ‘MX-T’ & ‘MEOH-Q’ shares’ fell by $6.69 or 10.54% to $56.81 after the Vancouver, BC based company incurred start-up production delays at the company’s new 1.8-milloin tonne Geismar 3 methanol plant in Geismar, Louisiana.

Meanwhile, the stock price of Enerplus Corp. ‘ERF-T & N’ surged up by $1.90 or 8.56% to close at $24.10 after the Calgary, AB based petroleum company agreed to a US$11-billion cash & stock takeover deal from Houston, TX based Chord Energy Corp. ‘CHRD-Q’.

Suncor Energy Inc. ‘SU-T & N’ announced the Calgary, AB based petroleum company’s 4th-quarter oil sand production reached a record of 757,000 barrels of oil per day (bbls/d). (It would seem the Trans Mountain Pipeline Expansion completion can’t come soon enough.)

The Australian government has added nickel to its list of critical minerals that are essential for the development of advanced technologies and have high economical value.

Rivian Automotive Inc. ‘RIVM-Q’ shares’ tumbled by $3.94 or 35.60% to US$11.45 after the American electric vehicle (EV) manufacturer’s 4th-quarter and year-end financials were well below the street’s expectations.

Meanwhile, executives of Ford Motor Co. ‘F-N’ stated that, although “electric vehicles (EVs) are here stay”, the giant U.S. automaker was “deferring certain capital investments in EVs until justified by demand and prospects of returns” as “mainstream customer adoption of EVs is happening at a slower rate than the industry expected.”

Data company JATO announced that Tesla’s ‘TSLA-N’ Model Y, with sales of 1.23-million units, overtook Toyota’s Rav4, with sales of 1.07-million units, as the world’s bestselling vehicle in 2023. This marks the first year that an EV has attained the #1 selling crown.

Natural gas and Copper were the best performing commodities over the shortened week, while silver and lithium were the worst performers.

The North American major markets staged a late week artificial intelligence (IA) led rally that saw the TSX Composite close at a new 2-year high of 21,318 while the Dow 30, S&P 500 and NASDAQ all closed at respective new all-time closing highs of 39,069, 5087 and 16,042.

It took over 34-years but Japan’s Nikkei 225 Index finally rose above its previous October 1989 high to close at a new all-time high of 39,099.

For the shortened Week – the DJI gained 1.14% to 39,069 with the S&P 500 up 1.62% to 5,087 and the NASDAQ ahead by 1.69% to 16,042. Up north – the TSX gained 0.29% to 21,318 while the TSX Venture fell 0.72% to 553. The CBOE Volatility Index or VIX rose 2.11% to 14.54.

With currencies – the Canadian dollar rose 0.03% to US$0.7417, while the U.S. dollar ‘DXY’ fell 0.30% to 103.96.

With commodities – gold bullion gained 0.55% to US$2,024, while silver lost 2.78% to US$22.75, as copper rose 1.83% to US$3.89, and lithium fell 2.07% to US$13,241. Crude oil lost 1.02% to US$78.32, while natural gas gained 7.50% to US$1.72, and uranium was unchanged at US$103.20. With soft commodities – lumber fell 0.18% to US$563. Overall – the CRB Commodities Index gained 0.32% to 316.

One last Thought – The federal government announced that the last 23 of the once 227 offshore oil & gas permits on Canada’s west coast have been relinquished, driving the final nail into any potential petroleum revenue from British Columbia’s coastal waters.