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North American equity markets got an unexpected blow early this week following news from “DeepSeek,” a disruptive (faster, cheaper, less energy-intensive) artificial intelligence (AI) model coming out of China that could challenge US dominance in the field. The TSX, being less tech-sensitive, suffered a smaller decline and then rose to a new all-time high by the end of the week. The tech sector, and especially the AI story in the U.S., had been overhyped for some time based on projected performance, adoption rates for the technology, and Capital spending by the M7. It was a bubble, and DeepSeek was the catalyst to burst it. None of the claims have been verified. There are a lot of claims about stolen data being used, the source of the chips employed and Chinese Government funding and involvement. The U.S. markets have recovered much of the lost ground, and while the AI trade is still on, it should be expected to continue on a lower trajectory.
Canada’s central bank has cut interest rates for a sixth consecutive time as inflation remained around two percent. The 0.25% cut comes as the Bank of Canada forecasts GDP growth will strengthen in 2025 “if there is no trade war with the United States.” Bank of Canada (BoC) Governor Tiff Macklem said, “While tariffs are top of mind, they were not a factor in the rate cut. Monetary policy cannot offset tariffs, the BoC can do things to help the economy adjust.” The Federal government may be considering a stimulus package to support Canadians and businesses in the event of a tariff and trade war. However, overly generous programs—similar to those introduced during the pandemic—carry significant risks, including exacerbating the deficit and inflation, challenges that persist today. While Trump’s threats to impose a sweeping 25% tariff tomorrow align with his characteristic negotiating style, there remains room for a deal that could mitigate or limit the scale of these measures.
The new gross domestic product (GDP) numbers suggest that the U.S. economy ended last year with slowing but solid growth. Inflation-adjusted GDP increased at an annualized rate of 2.3% in the fourth quarter, below the 2.6% that analysts were forecasting and down from 3.1% in the previous quarter. Almost all of 2024 data has now been released, and the US economy surpassed almost all expectations for the past three years and is looking strong for 2025.
Federal Reserve Chair Powell said, “We do not need to be in a hurry to adjust our policy stance” as the Fed held interest rates this week. The ECB is looking at four cuts this year. Trump is looking for lower rates and a weaker American dollar (USD). The rest of the world is cutting rates, and the differentials keep the USD too high.
Gold has fully recovered from a post-Trump election selloff and rose to a new all-time high as the U.S. GDP data weakened the dollar, while tariff threats by President Donald Trump continued to drive safe-haven demand. Spot gold rose to USD$2,810/oz. this morning, a clear sign that it can easily reach USD$3,000 this year. Silver rallied by 15% as well and opened at USD$31.40 today. These prices are clearly reflected in all classes of gold producers, and the mining-rich TSX Venture index has been in a rising trend for 6 months, reaching an 18-month high yesterday. The Juniors are finally seeing signs of interest, and a significant amount of M&A activity directed at attractive projects in top-tier locations could occur in the coming year. Be well-positioned for the moves to come.
The base and industrial metals continue to struggle against the too-strong USD. Major producers have been looking at ways to bulk up their copper exposure so they have positive forecasts. Chinese demand continues to be weak even with the economic stimulus measures. There is a lot of value in junior copper and nickel explorers; look for resource builders in safe jurisdictions.
The battery and energy materials continue to be weak. Lithium is higher by USD$0.45/kg this month closing at USD$10.74/kg. as China took further measures to control the lithium and rare earths market. Cobalt fell to a 9-year low of USD$9.75/lb. The DeepSeek debacle impacted energy sectors by driving down expectations about future power consumption. Even Uranium fell below USD$70/lb. briefly but closed at USD$71/lb. despite supply shortfalls, lack of production out of Kazakhstan, and the sanctions on Russian sales. Serious interest remains in lithium exploration, and dealmaking continues. Undervalued opportunities exist among the new junior players in the field, especially in the safer parts of the world.
We are pleased to present to you our round-up of our clients’ news released between January 27-31, 2025.
Mining
On January 30, 2025, Sokoman Minerals Corp. (TSXV: SIC) (OTCQB: SICNF) announced that diamond drilling has resumed at the Western Trend gold zone, in a program to begin with 18 holes to extend gold zone to depth and along strike. This will better define the site of the conventional bulk sample planned for extraction as soon as field conditions allow late in Q1 or early Q2, 2025.
Recently announced results in the Western trend are highlighted by intersections of 69.48 g/t Au over 4.85 m (MH-24-649), 40.89 g/t Au over 4.30 m (MH-24-648) and 26.72 g/t Au over 3.10 m (MH-24-646) (see January 22, 2025 news release).
The plan and long section show the previous drilling on the Western Trend and the location of the planned drill holes. A high-grade shoot dipping East and down-plunge is outlined in the accompanying long section with the proposed drilling designed to extend this target to depth and investigate an undrilled area to the south.
Timothy Froude, P.Geo., President and CEO, stated, “We are very pleased with the resumption of drilling at the Western Trend and remain confident that additional high-grade values will be found in the holes yet to report, as well as in the planned 2025 program. The information from the drilling will help in planning the location of the conventional bulk sample. Discussions for processing the sample offsite are in progress. We are expecting the final batch of assays, from drilling prior to Christmas shortly, with several holes noted to have visible gold in quartz."
Drilling to date at the Western Trend has tested 100 m of the strike to 165 m down plunge with the zone remaining open. The deeper holes are targeting the potential high-grade plunge of the intersection point between the east-west trending splay and the main north-trending vein system.
Technology On January 27, 2025, Visionstate Corp. (TSXV: VIS) announced the growing adoption of its innovative WANDA™ system by municipalities across Canada, including one of the country’s premier tourist destinations. WANDA™, a cutting-edge facility management tool, combines advanced task verification, data tracking, and public alert systems to help municipalities improve service delivery and build a better image for their communities.
The most recent deployment will include 10 Time of Flight, battery-powered people counters to collect traffic data and set alerts on predefined volumes, including the high-traffic public restrooms. WANDA™ QR codes will also be deployed throughout the municipality, including the recreation centre and high-profile tourist information areas.
The WANDA™ system’s public alert feature empowers residents and visitors alike to report issues by scanning strategically placed QR codes in high-traffic areas. This feedback provides municipalities with actionable insights, such as identifying problem areas and adjusting cleaning and maintenance schedules to better align with demand. Combined with WANDA™s cleaning verification technology, facility managers gain access to real-time data on cleaning activities, enabling more efficient resource allocation and higher service standards.
SAVE THE DATE
The World’s Premier Mineral Exploration & Mining Convention.
CHF Capital Markets CEO, Cathy Hume, will be part of an expert panel on capital markets during a short course at PDAC.
Sunday, March 2, 2025, 8:30 to 12:30 – the panel itself will be from 9:45 to 10:30 in the Metro Toronto Convention Centre, room TBD.
More info and registration:
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