Prolonged rally or market blip, the mining and resource sectors will be watching closely in future weeks and months to see if the bear market is abati
Prolonged rally or market blip, the mining and resource sectors will be watching closely in future weeks and months to see if the bear market is abating. — Photo courtesy Goldcorp
According to a report in Business in Vancouver (BIV) recent positive stock market movements may be indicating that the five-year-long bear market for the mining industry may be on the run. “We’re certainly in a rally,” said Ivan Lo, founder of Equedia.com, told BIV. “Whether the rally will sustain itself is another question. There does seem to be some excitement in the market. It’s a different type of excitement than we’ve seen in previous years.”
Ivan Lo also pointed out that renewed confidence in mining has resulted recently in several new financing deals.
Here are some good news items for the mining sector identified by BIV:
- Gold prices are up 17% since mid-December, and copper, which hit a low of US$1.96 per pound on January 20, has since inched up to US$2.25 – a 15% increase.
- The S&P/TSX Global Mining Index is up 16% since the beginning of 2016, and the resource-dominated TSX Venture Exchange gained 15% in the last three months.
- Teck Resources Ltd. (TSX:TCK) stock hit $3.80 on January 13 and has since recovered to over $12.
- First Quantum Minerals Ltd. (TSX:FM) stock fell to $2.49 on January 25; by March 14 it had tripled to $8.
- Goldcorp Inc. (TSX:G) stock hit a low of $14.01 per share on January 21; last week it had rebounded to $21.
- New Gold Inc. (TSX:NGD) stock hit $2.61 on January 19; it was above $5 per share on March 9.
- The TSX Venture Exchange is up 23% since its low of 466 points on January 20.
- $191 million acquisition of True Gold Mining Inc. (TSX-V:TGM) by Endeavour Mining Corp. (TSX:EDV).
- An $8.2 million investment by South Korea’s Daewoo Minerals Canada Corp. for a 35% stake in Vancouver’s Serengeti Resources Inc. (TSX-V:SIR), whose Kwanika copper-gold property is in the same region as the Mount Milligan mine north of Prince George.
- Cooper prices appear to be trending upward, now sitting at $2.30 a pound – hitting a 20-week high. Gold has been up and down and sits at $1218 per ounce. Silver is consistently sitting at $15 to $16 dollar per ounce.
“Budget 2016 makes appropriate investments to enable the continued sustainable development of Canada’s mining sector,” stated Pierre Gratton, MAC’s President and CEO, about the new Federal budget. “Canada’s mining industry, a world leader in sustainability standards and practices, supports the Government of Canada’s priorities of a clean growth economy and reconciliation with Indigenous peoples.”
He added, MAC welcomes the government’s proposed $1 billion commitment over four years, starting in 2017-18, to support clean technology and innovation in the natural resources sectors, as well as the $800 million to support innovation networks and clusters. MAC and its partner, the Canada Mining Innovation Council, looks forward to working with the government to implement its Innovation Agenda in the mining sector.
Prolonged rally or market blip, the mining and resource sectors will be watching closely in future weeks and months to see if the bear market is abating.
