CEO.CA Presents the Chairman's Briefing - July 11th, 2024
"Brass shines as fair to the ignorant as gold to the goldsmiths."
- Queen Elizabeth I
Metals/Crypto Prices
In Partnership With
WonderFi Launches Strategic Bitcoin and Ethereum Buying Plan to Diversify Treasury Assets
WonderFi Technologies Inc. (TSX: WNDR) (OTCQB: WONDF), Canada's leading regulated crypto company, has announced a strategic plan to diversify its treasury by incorporating Bitcoin and Ethereum.
Following the examples of Microstrategy and Tesla, WonderFi began purchasing these cryptocurrencies on July 5th and plans to invest around USD 100,000 weekly throughout Q3. Utilizing dollar cost averaging (DCA) to manage volatility, the company may also stake Ethereum for rewards.
Currently, the company holdes more than 40 BTC and 320 ETH.? President and CEO Dean Skurka stated, "WonderFi is committed to the crypto ecosystem and confident in the long-term value of cryptocurrencies.
In Today's?Briefing?
Gold
The metals have firmed up since our last Briefing. Where gold is concerned, we may be in the early stages of a significant shift in sentiment amongst retail investors around the globe (except in North America, of course) - Global gold ETFs see second consecutive month of inflows; North America still lags.
Earlier this week, analysts from the World Gold Council were keen to point out that June marked the second consecutive month of inflows into gold-backed exchange-traded funds—global holdings increased by 17.5 tonnes, valued at $1.4 billion last month.
“Inflows were widespread, with all regions seeing positive gains except for North America, which experienced mild losses for a second month. In general, lower yields in key regions and non-dollar currency weaknesses increased gold’s allure to local investors,” the analysts said.
The WGC emphasizes, however, that even with two months of positive activity, the market still has to dig itself out of a deep hole. Year-to-date, global Au ETFs have lost $6.7 billion, their worst H1 since 2013.
There are mixed signals out of the Central Bank gold buyers club. On the one hand - China’s PBOC Keeps Gold Buying on Hold for Second Month.
Nitesh Shah, a commodity strategist at WisdomTree: “It appears that gold prices remain a little too high and the PBOC is waiting for a further pullback before resuming its gold purchasing program.”On the other hand - India Boosts Gold Reserves by Most in Two Years, WGC Says
According to a WGC analyst: "The Reserve Bank of India added more than nine tons in June, based on calculations using weekly data from the bank, Krishan Gopaul said in a post on social medial platform X. That's the most since July 2022, and means India's reserves have expanded by 37 tons this year to 841 tons."
Silver
Where the gray metal is concerned, many view the current setup as a coiled spring of sorts - Silver could break $35 per ounce this summer – StoneX Group’s Razaqzada.
Referencing a recent surge that saw the metal bounce off support at $29 and then storm substantially higher, Fawad Razaqzada (Market Analyst at StoneX Group) stated: “Those gains came as the metal broke out of a continuation pattern and with the dollar falling against a basket of foreign currencies thanks to weakness in US data, raising investor expectations about a September rate cut by the US Federal Reserve. Concerns about the French elections on Sunday had also boosted precious metals’ appeal last week. But after a surprise win for left-wing alliance, which helped to keep Le Pen’s far right from power, this partly explains why both gold and silver have started this week on the backfoot, with European shares rebounding in a mild risk-on session."
The $30 level now serves as solid support.
This week, the data points that could influence the tenor of trade include Fed Chair Powell’s speeches to Congress today (Wednesday), then the consumer and producer price indexes on Thursday and Friday.
Copper
Something investors in the copper arena might fail to appreciate is the huge impact war has on supply/demand - Ukraine war sparks surge in copper demand.
Russia’s war against Ukraine is taxing global supply chains. It's all about bullets and artillery shells (bullet casings are made from brass, an alloy of copper and zinc). A NATO 155-millimeter artillery shell contains 0.5 kg of Cu, and Ukrainian forces are firing up to 7,000 of them each day.
“Every day, the war consumes many tonnes of copper–at the end of the war, there will be a new mine in Ukraine with all that copper scrap,” a producer told Fastmarkets.
The US produced an average of 14,400 shells a month before the war. According to DefenceOne, the specialist defense industry publication, they're expected to produce 100,000 shells per month by the end of 2025.
Fastmarkets analyst Andy Farida: “War is good for the metals business. Part of the reason copper prices have been resilient, while the other base metals have not, could be due to increased demand from the ongoing war in Ukraine.”
Robert Friedland: “If someone is pointing a gun at you, you need that copper to shoot back.”
In Partnership With
??Exploration Update:?Mogotes?Metals completed 2,185 m of diamond core drilling in three holes from February to May 2024.
??New Discoveries:
??Filo Alunita: 1.6 km silica-alunite trend, assays: 4.3 g/t Au, >100 g/t Ag.
??Rincon: 2.3 km trend, assays: 1.35 g/t Au, 825 ppm Cu, 142 ppm Mo.
??CEO Statement: “Our?team successfully drilled 2,185 meters of diamond core providing an initial test at 3 of our 9 prospects. ?We are encouraged by this initial drilling, as all holes intersected extensive alteration, veining and visible copper and, or base metal sulphides, consistent with large scale porphyry / epithermal mineral systems.”
General Mining Sector News
Let's (Not) Make a Deal
The rules governing mining M&A inside Canada's borders now fall under a new directive as part of Prime Minister Justin Trudeau's efforts to protect Canada's critical minerals sector and national security interest. According to Industry Minister Francois-Philippe Champagne, the Canadian government will only approve foreign takeovers of large Canadian (critical minerals) mining companies "in the most exceptional of circumstances" - Canada puts its big miners off limits just as M&A is heating up.
Some of the most attractive TO targets in the global mining arena reside in Canada's subsurface layers, but they're now officially off the table (Canada's list of 34 critical minerals includes copper, zinc, potash, and uranium).
So, just what might constitute an "exceptional circumstance," you ask? A Canadian government spokesperson declined to elaborate.
Canada is apparently still reeling from the last major wave of M&A 18 years back when resource-hungry foreign predators took out nickel miner Inco Ltd and aluminum producer Alcan Inc.
The move appears to insulate domestic companies from takeovers when the world’s biggest mining firms are hunting for metals that underpin the global transition away from fossil fuels. Industry giants such as Glencore Plc, BHP Group Ltd. and Rio Tinto Plc have been seeking to boost exposure to metals like copper as the appetite for large, transformational deals returns across the industry.
Francois-Philippe Champagne again: “This high bar is reflective of the strategic importance of Canada’s critical minerals sector and how important it is that we take decisive action to protect it.”
If you were to quiz the mining analysts over at the Bank of Nova Scotia on the subject, they'd tell you that these new M&A rules will leave the nation's biggest producers with lower valuations than their global peers - Canada Move to Limit Mining M&A Hurts Big Metals Producers, Scotia Says.
Scotiabank analysts Orest Wowkodaw and Eric Winmill said in a Monday note: “The directive “significantly compresses M&A optionality and potentially restricts financing options for Canadian miners. As a result, we now anticipate most Canadian miners to trade at lower valuation multiples versus global peers.” See?!
I'm guessing Minister Francois-Philippe Champagne won't lose any sleep over Scotia's lower valuation concerns.
The Ongoing Saga that is Victoria Gold
Shortly after the company reported that "continued environmental surface water quality sampling at multiple points downstream of the property has not detected any cyanide," the CBC dropped the following headline:?Cyanide detected in creek after Victoria Gold's heap leach failure at Eagle gold mine.
Last Thursday, Energy, Mines, and Resources Minister John Streicker said four water samples taken from different areas around the mine have tested positive for cyanide, but the levels are mostly low.
Streicker said levels in Haggart Creek were 0.04 milligrams per litre, while Dublin Gulch showed 0.001 milligrams per litre. "This level of cyanide in Haggart Creek could affect fish," he said. "Fish toxicity testing is underway."
Meanwhile, the Na-Cho Ny?k Dun First Nation is calling for an "urgent" halt to all mining activities on their land in the wake of the slide. They also want an independent investigation and review into what they characterize as "the region's most recent and potentially catastrophic mining failure."
"We have been sounding the alarm for decades on the need for sustainable development and responsible mining. The integrity of our lands, people and ecosystems are our top priority," Chief Dawna Hope said.
Headlines like this next one telegraph a view held by many of those who have been following the events closely: Victoria Gold may not survive landslide crisis, source believes.
A source wishing to remain anonymous told The Yukon Star that the company will likely declare bankruptcy by September, or possibly sooner. The source cited lean cash reserves ($40 million) and debts that include $70 million in payables and another $50 million it owes to the Caterpillar company for equipment deployed at the mine.
Over on the TSX, the downward spiral continues as the risk side of the equation eclipses the potential for reward...
But the credits haven't rolled on this one—it's not over until the fat lady sings.
Ramp Metals Releases Final Assays
To follow up on a story we highlighted in a previous Briefing, Ramp Metals (RAMP.V) released a final round of assays from a phase-1 drill campaign at its Rottenstone SW Project in Saskatchewan: Ramp Metals Announces Final Assays and Additional Gold Target.
The remaining intervals from this modest drill program failed to intersect the same high-grade mineralization either further down the discovery hole or closer to the top (or in the three holes collared 3 km away along strike at the Rogue target). But those bullishly inclined will argue that all three Rogue target holes tagged Au. They'll also argue that it's still early days at Rottenstone and that the company has barely scratched the surface of this (multiple target) 32,715-hectare property.
The shares, which tagged a high of $0.90 after the company announced its Ranger target discovery hole (73.55 g/t Au over 7.5 meters), took it on the chin following this July 8 press release but are attempting to carve out a base in the $0.50 range...
Next steps? The Company is currently in the permitting and consultation process for an extensive geophysical, mapping, and sampling program. A follow-up fall/winter drill program is in the planning stage.
Interesting to note: Insiders are putting their money where their mouth is, increasing their already substantial holdings in the company via some aggressive (July 8) accumulation...
Q2 Earnings Results Could Pack a Punch
Some investors are anticipating good things from the Au Producers heading into their Q2 earnings announcements. With a Q2 gold price averaging roughly $2350, we may see a few (substantial) beats. Among the Top Three Producers, Newmont reports on July 25, Agnico Eagle on July 27, and Barrick on August 12. We stand to watch. Two Significant Production Beats Heading into Q2 Earnings
Ron Hochstein, President and CEO commented, "Another strong quarter puts us firmly on track to meet our 2024 production guidance of 450,000 to 500,000 oz. Higher grades and recoveries versus last quarter helped to drive the performance, along with average throughput in the second quarter of 4,669 tonnes per day. This improvement in throughput is the result of continued debottlenecking and is not an impact of the Process Plant Expansion project, the completion of which remains on track for year end. Lundin Gold has had a great first half of the year, and a solid foundation to continue building from."
Wesdome's Q2 total production was 44,035 ozs compared to 30,992 in the same quarter last year.
"At Kiena, production nearly tripled compared to the first quarter due to the ramp-up in mining of high-grade Kiena Deep ore from the 129-level horizon in mid-April, which was processed at record throughput levels. This is a proud moment for all involved, and I extend my congratulations to the entire site team. At Eagle River, the mine delivered on plan despite a maintenance shutdown in late June."
Hits Of The Week
Gold has re-emerged as one of the top asset classes of 2024, having risen by 12% year to date and shattered multiple records along the way. It is now well on track for its best year since 2020 - RANKED: World’s top 10 gold mining companies
The Court of Appeal concluded that on the record before it, Skeena did not "relinquish" its rights to the Eskay Creek Material and that the former Chief Gold Commissioner was "clearly and palpably wrong to hold otherwise". Mr. Mill's asserted entitlement was based on the Province's grant of a mineral claim to him in 2017. The Court, however, found that the Province cannot be said to have granted ownership rights of the Eskay Creek Material to Mr. Mill when it granted him the mineral claim because the Province itself did not hold the rights to the material at the time -?Skeena Announces Positive Judgment by the British Columbia Court of Appeal Regarding the Albino Lake Storage Facility
Comex copper futures surged on Friday as some players bought back bearish, or short, positions to reduce their exposure due to expected shipments of copper failing to arrive in the United States, traders and analysts said. “Some participants cannot stomach the volatility and there is certainly some panic covering to avoid the moves we saw last time around,” a trader said - Panic short-covering ignites Comex copper as shipments fail to arrive
Vending machines stocked with ammunition have been installed in several grocery stores across the United States. The machines are made by American Rounds and allow customers over the age of 21 to buy ammunition with the same ease as using an ATM, the company says - Ammunition Vending Machines Appear in Grocery Stores
Want to receive the Chairman's Briefing via email, before markets open?
Disclaimer:
CEO.CA Chairman’s Briefing content and associated news and securities are for educational and illustrative purposes only.?This content should never be considered a recommendation to buy or sell any security or other asset. The source of any third-party content, in which CEO.CA Technologies Ltd. may receive compensation, is clearly and notably identified here as “Sponsored by” or “Sponsored” or “In Partnership With”. The information may not be complete or accurate and is subject to change without notice. CEO.CA Technologies Ltd., its affiliates and clients of CEO.CA Technologies Ltd. or its affiliates may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions. Information regarding the likelihood of various investment outcomes are hypothetical, are not guaranteed for accuracy or completeness, do not reflect actual investment results and are not assurances of future results. All investments involve risk, and the past performance of a security, industry, sector, market, or financial product does not guarantee future results or returns. Always do your own research before making any investment decisions. Thank you for reading the Chairman’s Briefing.
Investor & Privatier in Singapore, Momentum Trader
3 个月MOG-AE-BAY