CHF WEEKLY ROUND-UP: February 12-16, 2024

This has been an interesting week resulting in increased volatility.

New data showed that in January, Canada’s job market unexpectedly scored the biggest gains in four months. The unemployment rate fell to 5.7 percent, the first such decline since December 2022. The tightening of labour conditions was not expected by most economists. However, the job growth came only in the form of part-time, low-wage, service-sector jobs, so the news should not be taken as a sign that the economy is strong; it remains on the edge of recession. Job growth is not at a level that even comes close to keeping pace with immigration, and the top-line decline in unemployment conceals a withdrawal of job seekers from the employment market, and a decrease in full-time positions. June remains the most likely time for the first Bank of Canada rate cut.

U.S. consumer prices in January exceeded forecasts, rising 3.1% year-over-year against the expected 2.9%, leading to the S&P 500 dropping 2% immediately, marking its worst day since March 2023 and rapidly falling below 5000 from recent peaks. Inflation concerns persist, delaying potential Fed rate cuts from the current 22-year high of approximately 5.4% until mid-year. The Fed aims to avoid premature cuts, reflecting past errors. Despite a brief dip, the index rebounded, nearing record highs at 5029, slightly decreasing to 5024 today. This week’s inflation data suggests prolonged higher rates. Ed Pennock’s advice, “Remember 1996. Don’t get caught in a Bear Trap,” emphasizes caution.

The U.S. dollar suddenly gained value as rate cuts were off the table, and then January retail results disappointed, so it has lost some ground this week, after moving up for the last 5 weeks, still up 2.86% (DXY) so far this year.

Precious metals got hit in the downdraft as gold crashed through its support level to $1,990/oz on Tuesday before recovering to over $2,003/oz on Thursday and at $2,009/oz today. Silver bottomed out at $21.95/oz but returned to $22.90 on Thursday and is at $23.17/oz today. Share of Precious metal companies whipsawed violently but remain at bargain levels. The crazy volatility is causing some to give up on the sector. Now is not the time to lose sight of the potential; be busy buying the Dips.

Base metals did not react as much as precious metals to what turned out to be a bump in the road. Copper faces a supply shortfall by 2025 with projections showing a 20% price jump by 2027. Annual demand will surge to 36.6 million metric tons by 2031 (up from 25.3 million in 2021). There is no confirmed uptrend yet, but share prices in the sector are very low and present some great opportunities to get positions built up.

Battery Materials have not turned the corner yet; raw materials are at multi-year lows, and processed battery materials are still moving lower. The mining and processing of critical minerals currently remain too dominated by China and they use that dominance to maintain their market share. Share prices of important, good-quality global producers are at multi-year lows, with more pressure on them. Again, there are buying opportunities in this sector, buy value and wait.

Uranium returned $106/lb. this week; a price otherwise not seen since late 2007, but still 25% below the 2007 all-time high of $140/lb. This is one critical metal that China has not wrapped up. Canada has important production, and some U.S. opportunities are coming around. Australia has substantial resources but no Uranium production and no nuclear generation, but the debate is starting up.

Oil prices reached a 4-month high at $78.28/bbl (WTI) Thursday, as the US dollar slipped a little, settling back a little today to $78.06/bbl. While US inventories of crude were up, there was a reported decline in refined product inventories, suggesting that demand may be increasing inside the US. Some OPEC data also suggested there more global demand may be in the offing. Given the situation in the Middle East and the Red Sea issues, there is little clarity in the oil market, but it may be tighter than the price would suggest. Look for upside surprises.

It has been a week of growth for our clients, and we are pleased to present to you our round-up of their news released between February 12-16, 2024.

“We are so excited to showcase our newest client, StickIt Technologies Inc. (STKT: CSE). Their innovations in the Cannabis market are sure to impress you! Let me know if you wish to attend a virtual meeting with the co-founder and CEO Eli Ben Haroosh. Meanwhile, please take a look at our Corporate Presentation below, by clicking on the image.

On February 14, 2024, Visionstate Corp. (TSXV: VIS) CEO, John Putters was interviewed by Ryan Dhillion of Market Online, Capital Compass. They discussed the growing need for effective cleaning protocols to prevent disease outbreaks and how WANDA™ can potentially change standards for facility management cleanliness from airports to restaurants.

Visionstate aims to be a leading global provider of Internet of Things (IoT) solutions for facility management, revolutionizing the industry by delivering data-driven, innovative, and sustainable solutions. The WANDA™️ product line is a cutting-edge suite of solutions designed to transform how facilities operate. Visionstate offers a diverse array of products that seamlessly integrate technology and people. By combining smart sensors, data analytics, and intuitive interfaces, WANDA™️ has the power to set a new standard for optimizing operations and enhancing customer experiences in various industries.

Watch the Video Here.

On February 14, 2024, Sokoman Minerals Corp. (TSXV: SIC) (OTCQB: SICNF) reported that their winter diamond-drilling program has begun, with a focus on extending the recently discovered 552 Zone, 400 m to the east of the main Eastern Trend. The 2,500-metre program will test a 150-metre strike length of the zone to a depth of approximately 125 metres and will take six to eight weeks to complete. Drilling to date on the 552 Zone has defined a two to five-metre zone of quartz veining and quartz breccia carrying fine free gold, sphalerite, and boulangerite. The best grade was intersected in hole MH-23-574, which returned 5.00 g/t gold over a 2.10 metre core length.

The 552 Zone is extremely important since it represents a new gold-bearing structure on the property and has many similarities with the other high-grade zones nearby. The Company is confident that the 552 Zone has the potential to host sections of significantly higher grades. Three of the five most recent drill holes that intersected the zone carried visible gold within 50 m of the surface.

Gearing up to drill at 552 Zone

On February 16, 2024, Sokoman Minerals Corp. (TSXV: SIC) (OTCQB: SICNF) released an additional video over its Fleur de Lys made by Senior Technician, Brian Bursey Jr., of Sokoman’s crew sampling lake sediments for gold!

Timothy Froude, P.Geo., President and CEO, said, “While the Fleur de Lys Project has seen little modern exploration, Sokoman’s C-Horizon till sampling has outlined a district-scale gold target, with a prospective corridor of approximately 30 km strike length. With the new access created by timber harvesting, we now have improved ability to target Dalradian-style orogenic vein-hosted gold deposits (Curraghinalt, Northern Ireland).”

Watch the Video HERE.

“Sokoman Minerals has accomplished so much in the past 12 months. Discoveries on both our flagship Moosehead Gold and our Fleur de Lys gold properties. An outstanding deal closed last October with Piedmont Lithium (PLL: NasdaqCM) who will advance the Killick Lithium project at no cost to Sokoman. While the entire junior exploration sector has been decimated for some time now, Sokoman remains focused on creating shareholder value primarily with the drill bit. May I remind you that Sokoman is one of the best performers in terms of high-grade assay results at our flagship Moosehead Gold property, Central Newfoundland. Please view the chart created for Eric Sprott’s speech at the Central MinEx 2023 conference in Gander, NL (April 26-28, 2023).”

The PDAC Convention is just around the corner, March 3-6, 2024, and the CHF Capital Markets team is excited to be participating in this year’s lineup of activities. Hope to meet you there.