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A rainy April, filled with uncertainty, has come to an end and we are looking forward to a sunny and upbeat May.
Canada’s latest economic reading was released Tuesday, and Statistics Canada reported Tuesday morning that the country’s Gross Domestic Product (GDP) grew by 0.2 percent in February: down from a revised 0.5 percent in January and below the 0.3 percent expected. The Loonie plunged on the news, falling about a quarter of a cent. The weak showing adds to calls for the central bank to ease its monetary policy soon with a rate cut as soon as June, or more likely July. Bank of Canada governor Macklem said that “interest rates in Canada do not need to be the same as the U.S. rate or global rates. But there is a limit to how far they can diverge."
Canadian markets drifted lower through April but may have started an upswing as we enter May. The Biden administration announced plans to reclassify marijuana as a lower-risk substance and Canadian cannabis stocks rallied boldly. It may be time to reconsider a neglected sector and look for opportunities in stocks that will benefit from a growing U.S. cannabis market like our client StickIt Technologies Inc. (CSE: STKT).
The Federal Reserve on Wednesday emphasized that while inflation has remained higher than desired in recent months it does not plan to cut interest rates until it has “greater confidence” that price increases are slowing sustainably to its two percent target. Chair Jerome Powell said, “It’s unlikely that the next policy rate move will be a hike,". U.S. markets completed their worst month of the year in April, the S&P 500 held over 5000, and following the comments from the Fed Chair moved higher into May reaching 5125 today.
The U.S. dollar remains strong up 3.7% year to date, held up by continuing high interest rates and doubts about near-term rate cuts.
Gold peaked above $2,400/oz in mid-April but ended the month below $2,300/oz as the expectation of interest rate cuts and dollar weakness faded, yet the uptrend remains intact. The positive outlook for gold remains and the market for junior gold explorers has totally bottomed out; opportunities abound. On Wednesday Barrick Gold Corp. reported Q1 (March 31, 2042) profits more than 2 1/2 times that of last year, and gold prices will be higher in Q2. CEO Mark Bristow says, “The market is now waking up, and the industry itself, to just how important it is to invest in not only gold but copper as well,” and the mining giant is poised to take advantage of near-record-high gold and copper prices. Last week Barrick agreed to earn into Unigold Inc’s 100%-owned Neita concession in the Dominican Republic, as dealmaking in the gold sector continues.
Base metals fell off from the peaks attained in April and copper fell back to $4.51/lb. Supply underinvestment and tight stock buffers are still contributing to a significant tightening in the copper market. BHP is believed to be considering an improved bid for Anglo American. BHP is seeking to get ahead of the price boom and grab Anglo’s copper assets, which are in Chile and Peru.
Green technologies are reliant on a suite of critical minerals, including lithium, rare earths, nickel, graphite, cobalt, and manganese that are all fundamental to electric battery composition. However, as material consumption to feed the growth of AI (Artificial Intelligence) technologies and the related infrastructure increases, the demand and utilization for these minerals are expected to skyrocket, leading to tighter markets and heightened demand for investment in exploration and processing capacities. Opportunities in the critical materials sector are at incredibly low valuations.
The U.S. Senate has approved legislation to ban imports of Russian uranium to disrupt Russia’s war against Ukraine. Almost 12% of uranium used in U.S. nuclear power plants is imported from Russia. Who will provide the uranium to replace Russian imports? Uranium stocks have been rallying over the last year with the current price of U308 hovering around $91 per pound. Little new supply is coming on soon.
It has been a productive week for our clients, and we are pleased to present to you our round-up of their news released between April 29-May 3, 2024.
Mining
On April 29, 2024, Sokoman Minerals Corp. (TSXV: SIC) (OTCQB: SICNF) was featured in an article published by Resource World Magazine: Investment Opportunities and News that asks the question: “What’s next for gold?”. A well-written and insightful article delves into the support mechanisms for the current gold price and looks at factors that may continue to drive the price higher.
They note that analysts are of the opinion that the gold equities have lagged the bullion price because the underlying equities have not seen the same degree of support from institutional and retail investors. They then pose the question “With the positive outlook for gold, could the market for junior gold explorers have bottomed out, and is a new bull market forming?”
A detailed review of Sokoman and prospects at the Moosehead and Fleur de Lys projects completes the article. Link to the Resource World article Here.
Technology
On May 1, 2024, Able View Global Inc. (NASDAQ: ABLV) reported its financial results for the fiscal year ending December 31, 2023. All amounts are stated in thousands of U.S. dollars. Able View is China's second-largest e-commerce hub for international beauty and personal care brands, offering a comprehensive suite of brand-management services. These services include strategic planning, branding, digital and social marketing, omni-channel sales, customer service, and integrated logistics; such as overseas shipping, warehousing, and fulfilment. Able View owns and manages a diverse portfolio of products that range from niche to prestige and masstige categories, solidifying a strong presence in the Chinese market. The Company's mission is to enhance these brands' power and premium status, ensuring sustainable growth and long-term success in China.
A record revenue of $149 million and a net income of $10 million is reported for the fiscal year ending December 31, 2023. These results reflect a steadfast commitment to growth and operational excellence and signify the strong execution of our strategic initiatives in the highly competitive beauty and personal care markets. Continued expansion of its portfolio and enhancement of brand-management services provides optimism about the future and will maintain this positive trajectory.
Full Year 2023 Financial Highlights
Full Year 2023 Operational and Other Financial Highlights
Able View completed its merger with Hainan Manaslu Acquisition Corp. (HMAC), becoming a subsidiary of Able View Global Inc. as of August 2, 2023. Starting August 18, Able View's Class B shares and warrants commenced trading on the Nasdaq stock exchange
The company's total revenue for the fiscal year ending December 31, 2023, was $149,000, which is a 3% increase from the previous year's revenue of $145,256
The gross profit for the same period was $37,009, an increase of 14% from $32,538 in the previous year
The net income for the fiscal year ending December 31, 2023, was $9,750, which is a 23% increase from $7,904 in the previous year
The cash flow from operating activities for the year increased to $23,573, which is a significant increase of $36,423 compared to the previous year's operating activities, which used $12,850
Net cash provided by investing activities was $254, which is an increase of $1,361 from the $1,107 used in the previous year
The net cash flows used in financing activities were $16,216, compared to the previous year's $12,944 provided by financing activities
The shareholder's equity increased to $11,416, which is an increase of $9,020 from $2,396 at the end of the previous year
Fintech
On April 30, 2024, Tenet Fintech Group Inc. (CSE: PKK) (OTC Pink: PKKFF) released their financial results for the year ended December 31, 2023. The Company reported revenue of $42.08 million, compared to $109.88 in 2022, and a net loss of $78.33 million for the year, of which a total of $47.93 million was attributed to amortization of intangible assets, impairment of goodwill, and impairment of intangible assets. Cash flow from operations was negative ($3.91) million in 2023 compared to negative ($4.76) million in 2022.
The non-cash impairment charges relate to delays in forecasted revenue from the Company's platforms in both China and Canada. The Company is hopeful that a significant portion of these impairment charges (excluding goodwill) may be reversed in future quarters as the platforms become significant revenue generators for the Company. All amounts are in Canadian dollars unless otherwise indicated.
A Notice of Meeting has been filed regarding the Annual Meeting of Shareholders to be held on June 26, 2024.
2023 Financial Highlights
Total Revenue of $42.08 million
Adjusted EBITDA of ($24.62 million)
Net Loss of ($78.33 million)
Cash flow from operations of ($3.91 million)
Q4 2023 Operating Highlights:
From an operational standpoint, the Company's Cubeler® Business Hub continued to grow during the fourth quarter of 2023 both in terms of small- and medium-sized business memberships and in terms of strategic partnerships. Of particular significance was the Company's partnership with the Canadian Chamber of Commerce's SME Institute and the arrival of the Business Hub's first international lending partner, eCapital, which can lend and extend credit to clients in Canada, the U.S., and the U.K. The platform also reached a significant milestone in Canada during the quarter by eclipsing the $1,000,000 mark in terms of loans facilitated. But perhaps the most important operational event that took place in all of 2023 was the launch of the Company's Tenoris3 data science subsidiary's website, which provided a preview of Tenet's data and AI-driven product offerings and how the Company expects to generate most of its revenue in the future.
Tenet's Chinese operations continued to prepare for the transition from a transaction-fee-based revenue model to a subscription-fee-based revenue model predicated on data, AI, and analytics. The Company demonstrated the breadth of its industrial servicing versatility as supply-chain-related revenue accounted for less than 75% of total revenue, which is increasingly positioning Tenet to be able to provide a picture of economic activity in China on not just industries related to the supply-chain.
Operational Outlook for 2024:
The launch of the Company's data driven ie-Pulse and Equity Insider product offerings will be the Company's focal point for 2024. Tenet's ie-Pulse offering will initially target capital market professionals taking part in the USD$120.4 trillion global equities market by catering to their needs for data and analytical tools, something the world's leading stock exchanges have been capitalizing on in recent years through a series of high-profile acquisitions. Equity Insider, on the other hand, will aim to leverage proprietary data from the Cubeler® Business Hub to provide AI-sourced trading opportunities to the millions of investors around the world who manage their own investment portfolios. Both ie-Pulse and Equity Insider are expected to be offered under monthly subscription plan models.
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