CHF WEEKLY ROUND-UP: July 15-26, 2024

The second half of 2024 has started to get interesting markets are shifting away from the trends of the last 6 months. New opportunities are opening up as the bull market in stocks, which has been volatile recently, rotates and broadens. 

Canada’s annual inflation rate fell to 2.7 percent in June, and in May, it fell to 2.9 percent. The Bank of Canada (BoC) cut interest rates by 0.25% on Wednesday and appears to be on a path of multiple cuts for the rest of 2024. BoC seems to be focussed on soft landing and avoiding recession rather than the impact on the $CAD, which only fell marginally following the announcement. A BMO Capital Markets strategist suggested that “It’s exactly the wrong time to be negative on Canada, which is positioned for a significant catch-up trade, with Canadian small caps particularly well positioned.” 

A better-than-expected June U.S., CPI report earlier in July saw the financial markets pricing in a 100% probability of a Fed rate cut in September, and Fed comments seem to confirm this more dovish stance. No Fed action is expected next week, but a lot of attention will be paid to the results of the meetings. 

Investors responded by rotating out of the, probably overbought by this point, S&P 500's Magnificent-7 into interest-rate sensitive stock sectors: Financials, Real Estate, Utilities, Industrials, and Materials. 

In the last week, events in the U.S. election race have started to make headlines and create a lot more uncertainty that may have been in place at the start of the month. 

Gold prices are higher in trading today, on a corrective bounce from strong losses on Thursday, August gold was at USD$2,388/ oz and pointed upward towards USD$2400. Silver prices are weaker at USD$27.70/oz. 

Copper tumbled below the USD$9,000-a-ton threshold (USD$4.00/lb) for the first time since early April on the back of a selloff in global stock markets and rising pessimism about the outlook for demand in China and elsewhere. Efforts by the Chinese government to stimulate their economy failed to impress, and significant storm and flood damage has been reported, hindering prospects of a quick turnaround in China. 

Nearly all metals were lower on the LME, with tin declining 2.6 percent and zinc losing 1.5 percent. Nickel, at USD$7.17/lb is near its low for the year. Iron ore prices declined 0.9 percent to trade below $100 a ton in Singapore, extending losses on signs that supplies will stay robust. 

Metal demand will not go away and improving demand and prices will arrive.  Many excellent opportunities exist at very low prices, and some new and exciting projects are being planned. 

Battery and Critical materials are hitting pre-pandemic lows. Stalling demand for EVs and the issues impacting Chinese demand for these materials will not be long term and other demand created by the technology and AI sectors will soon be drivers. 

On July 24, 2024, CHF’s Steve Mlot, Mining Analyst and Technical Writer, attended the Canadian Securities Exchange (CSE) 2024 Open Golf tournament on the pristine fairways at the Royal Ontario Golf Club.

The event provided an excellent opportunity to strengthen professional relationships while enjoying a game we all love. Despite thunderstorm concerns, it was an exceptional day featuring networking, camaraderie, and friendly competition. Many wonderful things are happening at CSE, now in its 20th year, and there are many new deals, especially in the Gold and Copper exploration area, that are in the offing; look for some exciting opportunities to be coming to you soon. 

Many thanks to the people at the CSE and their sponsors for providing this opportunity. 

It has been a productive week for our clients, and we are pleased to present our round-up of their news released between July 15-26, 2024.  On July 25, 2024,

Mining

Sokoman Minerals Corp. (TSXV: SIC) (OTCQB: SICNF) provided an update from the 2024 exploration program at the 100%-owned Fleur de Lys Project in Newfoundland. 

Since May 1, 2024, the Company has collected and received assay results for 89 rock samples from Fleur de Lys. Most samples were collected from the northern portion of the property, where winter logging activities have opened a large area of prospective ground, including several discreet target areas over a six to eight sq-km area highlighted by the Golden Bull Prospect discovered in late 2023. The total number of samples collected since late 2023 is 124, 34 of which returned gold values greater than 500 ppb to a maximum of 9,020 ppb gold (9.02 g/t Au). More than half of all samples collected over the broader Golden Bull target area since 2023 have returned greater than 100 ppb gold, suggesting potential for additional, undiscovered gold zones at Fleur de Lys. 

Highlights of the 2024 rock sampling program include:

• 89 samples collected and assayed of quartz vein float and quartz vein bedrock samples

• 37 samples returned gold assays greater than 100 ppb gold (0.1 g/t Au)

• 12 samples returned gold assays greater than 1,000 ppb gold (1.0 g/t Au) to a maximum of 5,472 ppb gold (5.47 g/t Au)

• Five samples greater than 1.0 g/t Au were from bedrock grabs

• Multiple high-priority drill targets are now confirmed for the upcoming Phase 1 drill program, which will focus on the Golden Bull target area; four other areas will also be drill tested

Tim Froude, P. Geo., President and CEO, stated "We are very pleased with the progress we have made at Fleur de Lys this year, and we look forward to the start of our 2,000 m drill program, pending receipts of all permits hopefully by mid-August.  Most of the drilling will be in a 2-km by 1.5-km area defined as the Golden Bull Prospect and will consist of multiple 50- to 150-m-long drill holes. At least one drill hole will test four other targets within a larger six to eight sq-km area enclosing the main target (Golden Bull) area. We continue work on other till and rock sample anomalies elsewhere on the property as part of the 2024 program to define future drill targets for later this year or early 2025." 

AI/DATA Technology

On July 24, 2024, Toronto-based private investor and Independent Analyst Edward Vranic, CFA, released a new review of Visionstate Corp. (TSXV: VIS) on his Canadian Smallcap Investment Blog restating his ongoing support and belief in the Company, Stating “A $0.20 target still seems apt. That would lead to somewhere between a $50 to $100 million market cap, assuming all warrants are exercised. With $5 million in net income projected in a reasonable timeframe, say by the end of 2027. This target will be highly dependent on market sentiment.  The opportunity to buy shares at 2 cents won't last long.”

Read the blog post Here. 

AI/DATA Technology 

On July 22, 2024, Tenet Fintech Group Inc. (CSE: PKK) (OTC Pink: PKKFF) announced that it has secured a credit facility of up to $5,000,000 from Petiana Capital Inc. ("PCI") and has terminated its ongoing private placement of units of convertible debentures and warrants whereby the Company was looking to raise an additional $5,000,000.  The proposed financing that would have seen the Company potentially have to issue an additional 33.3M shares and 33.3M warrants.

The credit facility allows access to the same amount of capital with only potentially having to issue 5M warrants, which is seen as a big win for the Company and its shareholders. The credit facility agreement between Tenet and PCI allows Tenet to drawdown up to $5,000,000 over a twelve-month period by sending drawdown notices to PCI (the "Credit Facility"). No drawdown notice can exceed $500,000 and there must be at least five business days between each drawdown notice. Tenet will pay PCI interest at an annual rate of 10% on any amount drawn from the Credit Facility and will have up to twenty-four months from the date of the drawdown notice to repay the amount advanced by PCI. For each dollar advanced by PCI under the terms of the agreement, PCI will receive one warrant to purchase one common share of Tenet at the greater of $0.25 or the price that represents a 25% premium to Tenet's share price at the time of issuance of the drawdown notice. The Credit Facility is guaranteed by assets pledged by a collection of Tenet shareholders in a separate collateral agreement between PCI and the shareholders. 

The Company plans to use the funds available to it from the Credit Facility to: 1) market the Business Hub following the launch of its networking and advertising modules, which will make more data available for its ie-Pulse industrial index offering; 2) complete the ie-Pulse platform; and 3) launch the ie-Pulse marketing campaign to have the first data plans sold in either late Q3 or early Q4.

On July 24, 2024, Tenet Fintech Group Inc. (CSE: PKK) (OTC Pink: PKKFF) provided an update on loans and credit facilitated by the platform's "Financing" module in Canada ahead of the upcoming release of the platform's "Networking" and "Advertising" modules. 

The Company reported that between July 2023 and June 2024, loans and credit in the form of receivables financing, merchant cash advances, term loans, lines of credit, and inventory financing totaling $976,500 were awarded on the platform. That amount was divided amongst small and medium-sized enterprises (SMEs) operating in the construction sector, professional, scientific and technical services, wholesale trade, accommodation and food services industries, management of companies and enterprises, and real estate, rental and leasing sectors. Loans and credit awarded to businesses in the professional, scientific and technical services sector led the way, accounting for 46.08% of the total amount. That was followed by construction at 36.97%, accommodation and food services at 11.26%, management of companies and enterprises at 3.89%, wholesale trade at 1.02% and finally real estate, rental and leasing at 0.77%. The loans and credit awarded on the platform during that span ranged from $7,500 to $300,000.