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The first week of June has marked a significant event with the long-awaited Central Bank rate cuts. However, the real intrigue lies in what unfolds next. Speculation is rife about the number and timing of future cuts. The market response to the initial cuts has been positive, with indices hovering near all-time highs, keeping investors and analysts on their toes.
On Wednesday Bank of Canada Governor Tiff Macklem said they were more confident that inflation is headed to the two percent target and said it’s “reasonable to expect further cuts.” They lowered the benchmark overnight rate by 25 basis points to 4.75 percent, as has been widely expected by markets and economists. The path forward remains uncertain for the Canadian economy as GDP fails to grow and unemployment continues to increase.
In the U.S. markets, the S&P 500, NYSE, and NASDAQ are near all-time highs. A lot of U.S. economic reports were released this week, and it seems to have put the possibility of a July rate cut by the Fed back on the table, and maybe 2 more. Today’s employment market showed higher than forecast job growth with an increase in the unemployment rate. This raises doubts about rate cuts and may whipsaw the markets today. The next opportunity for the Fed to cut rates may be in September.
European Central Bank (ECB) Officials, led by President Christine Lagarde, lowered the key deposit rate for the first time since 2019 on Thursday, lowering by a quarter-point to 3.75 percent, as widely expected. The Bond market in Europe was rallying in expectation of an ECB rate cut, to lock in the last of higher rates and the future gains on Bonds to be sold later at higher prices as interest rates continue to fall. European stocks were up by 3:1 and surged further upward following the cut. The Euro bloc's economy is recovering faster than expected and the jobs market remains tight, casting uncertainty on how many times the ECB will cut rates this year.
Gold reached USD$2,387/oz overnight but following the U.S. employment report this morning has fallen to USD$2,314/oz as the possibility of a Fed rate cut was factored out. The resistance level near USD$2,400 an ounce has been difficult to breach, but a significant base of support above USD$2,300 has been built, and it is only a matter of time before the precious metal sets fresh all-time highs. Eventually, monetary policy easing from the Federal Reserve will occur and drive gold prices higher in the second half of the year.
When the gold miners report their second-quarter earnings, they will likely report greatly improved revenue and profits as the gold sales in the second quarter went for around USD$300 more than in the first quarter. Prices for the top 50 TSX Gold companies were all in the green yesterday. The Junior companies continue to remain under the radar but have huge upside potential when the attention swings to them.
Just when it seems that we are finally on the brink of a silver bull market: this morning, after the U.S. employment report, the silver price dropped by USD$1.50/oz to USD$29.75/oz., still within the support level. The fundamentals have never been stronger for silver, with four years of consecutive supply deficits widening in 2024 to 250 million ounces.
Copper Nickel, Lead, Zinc, and even Aluminum are all being hit by the same sentiment as the precious metals today, with sharp drops this morning.
Battery and Critical materials continue to struggle. Lithium lost 3.5% this week, just above October 2021 pricing, and Cobalt is flat at 5-year low prices. Geopolitics surrounding China’s dominance and control of supply and processing remain a major roadblock.
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 June 3-7, 2024.
Mining
On June 5, 2024, Sokoman Minerals Corp. (TSXV: SIC) (OTCQB: SICNF) released a video featuring President and CEO, Tim Froude, as he sat down with noted mining commentator Allan Barry Laboucan on his “Rocks and Stocks News Show” to discuss the latest updates on Sokoman’s flagship Moosehead Gold and Fleur de Lys Gold projects in Newfoundland.
On June 6, 2024, Falcon Gold Corp. (TSXV: FG) (GR:3FA) (OTCQB: FGLDF) announced that the Company will commence drilling at its 100% owned Great Burnt Copper Project in Central Newfoundland. The Company plans to test up to ten geophysical anomalies with up to 1,100 metres of drilling.
The property is hosted within the Great Burnt Greenstone Belt (GBGB) which hosts massive sulphide deposits that have been interpreted as Besshi-type copper-rich VMS (Volcanogenic Massive Sulphide). These types of deposits generally occur as laterally extensive sheets of pyrrhotite- or pyrite-rich sulphide rock within mixed volcanic-sedimentary environments. Sulphide lenses can be several metres thick and extend for several kilometres. Besshi-type massive-sulphide deposits are generally copper dominant, commonly contain other lithophile elements like cobalt or lead, and can contain precious metals such as gold and silver.
Karim Rayani, CEO, commented; "We are very excited to move forward on our first phase of drilling at our Great Burnt Copper Project. Drilling along the Great Burnt copper trend by neighbour Benton Resources has shown significant copper assay results. We believe that Benton's recent success at Great Burnt is a testament to the untapped VMS potential of the Great Burnt area, and we are thrilled to hold an extensive strike extent of this unexplored, never-drilled horizon."
Figure 1. Location of proposed drilling within Falcon's recent acquisition proximal to the Benton - Spruce Ridge Great Burnt Copper-Gold joint venture in Central Newfoundland.
Falcon holds 2,275 hectares in the Great Burnt camp, with licenses located north of, and contiguous to, Benton Resources Inc. - Spruce Ridge Resources Ltd. Great Burnt Copper-Gold joint venture (see Figure 1). Benton Resources Inc. recently optioned the Great Burnt Copper-Gold Project from Spruce Ridge Resources Ltd. in an agreement that allows Benton to earn a 70% interest in the property. The Benton-Spruce Ridge property is host to the Great Burnt Copper Zone, a deposit with an indicated resource of 381,300 tonnes at 2.68% Cu and inferred resources of 663,100 tonnes at 2.10% Cu. Recent drilling by Benton reported drill results that returned 7.20% Cu, 7.12 g/t Ag, and 0.05% Co over 12.30 metres. Previous drilling in 2020 by Spruce Ridge reported 8.06% Cu over 27.2 m in March 2021.
The Great Burnt Greenstone Belt is prospective for copper and gold, and further hosts the South Pond A and South Pond B copper-gold zones, and the End Zone copper prospect along a 14 km mineralized corridor. The mineralized corridor occurs along a conductive trend, and this conductive trend continues into Falcon's Great Burnt Copper Property. Recent trenching by Benton 10 km north of the Great Burnt deposit has exposed some spectacular geology and copper rich mineralization in the South Pond Area, which will be targeted by an upcoming drill campaign by Benton this summer. South Pond is about 2 km from the Falcon boundary, and about 2.5 km from the southern limit of Falcon's proposed drill program. This suggests that the prospective horizon could easily extend across the full length of Falcon’s claim group.
Fintech
Tenet Fintech Group Inc. (CSE: PKK) (OTC Pink: PKKFF) invites all to attend the annual meeting of Shareholders to be held at 111 Robert-Bourassa, suite 1500 Montréal, QC H3C 2M1 on June 28th, 2024, at 10:00 a.m. (Eastern time).
The Corporation strongly encourages all shareholders to vote their shares in advance of the Meeting. You can also dial in by telephone using the following number: 1 (647) 558-0588 and use meeting ID 89736979597. The Board and management will address the Meeting and shareholders will be able to listen and ask questions at the Meeting in real time via the Internet. Shareholders should Vote in advance of the Meeting in accordance with the instructions set out on your form of proxy or voting instruction form will ensure your votes are counted at the Meeting.
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