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More Trump-induced volatility occurred this week with announcements of impending tariffs on America’s largest and closest trading partners tied to immigration and drug smuggling. The initial outrage will likely fall away, as nobody wins a trade war, and everyone will agree to work together on the issues before the inauguration day deadline.
Despite the furor, the TSX reached another all-time high this week, rising through the month of November, especially since U.S. election day. The Canadian dollar (CAD) is just off its low for the year against the U.S. dollar (USD). The Bank of Canada is set to make its next rate announcement on December 11. A cut of 0.25 % is widely expected, but a cut of 0.50 % cannot be ruled out, given the weak state of the Canadian consumer and the time of year. The forecast for next year is to continue cutting the policy rate to 2.5 % by the end of 2025..
The Thanksgiving holiday on Thursday and early closing of 1:00 pm ET today in the U.S. markets brought a brief respite for traders, as S&P 500, Dow, and NASDAQ indices all made new highs this week as the U.S. markets continue to show strength. The USD also remains strong, just off the high for the year. Trump will likely want a weaker USD to help drive exports of a surge of U.S. manufactured goods. International Money continues to flow into the U.S. bond market as rates look like they will remain higher. The direction interest rates will take is uncertain after the Federal Reserve’s final rate setting for the year on December 18, but it is still expected to be a 0.25% reduction. There will be a lot of data points before the next Fed meeting at the end of January 2025.
Gold prices are in correction and have struggled as President-elect Donald Trump continues promoting America-First policies, bolstering the USD. Today, at $2,660/oz, gold appears to be rebuilding its support level from September and October before the last run-up. The new U.S. administration’s trade tactics will prompt central banks in emerging markets to raise the share of gold in their reserves, and buying will persist going forward. While China appears to be absent from the gold market, it does purchase through third parties. Important M&A activity is noted in the gold sector, with Newmont selling two mining operations in Eastern Canada at high valuations. Silver is building a support level near its price today of $30.60/oz. This is not a time to be out of the precious metals arena.
Base metals prices continued to be weak this week, with prices being driven down by the massive USD strength and continuing lower European and Chinese manufacturing demand. Copper is still near its two-month low at USD$4.09/lb. today. Nickel is just off the low for the year at USD$7.15/lb. China will be facing economic headwinds, declining by as much as 2%, as Donald Trump moves into office next year, and it will need to roll out more stimulus policies to offset damages brought on by any additional tariffs.
Critical and battery minerals are also struggling. Lithium failed to break USD$11.00/kg this week, ending at USD$10.78/kg, while Cobalt held an eight-year low of USD$11.02/lb. Clean energy and EV adoption appears to have slowed as rigid Government-mandated energy, vaccine, housing and immigration policies, funded by the deep pockets of central government debt, are being rejected globally. Things will not go backwards; increasing global urbanization will begin to drive the data economy, cloud computing, robotics, and AI adoption. Demand for the critical minerals that will be the foundation of tomorrow’s economy will continue to grow. Be in copper, nickel, lithium, uranium, and rare earth metals.
Australia’s Sayona Mining is buying U.S.-based Piedmont Lithium in an all-stock deal that will consolidate their Canadian operations and create the largest producer of hard-rock lithium in North America, cut operating costs and make the sale and shipping of lithium easier, create opportunities for further growth, and boost the merged firm’s exposure to the North American electric vehicle (EV) sector. Despite robust demand forecasts, rapid supply growth has outpaced expectations, and EV adoption has progressed more slowly than anticipated. The International Energy Agency projects that lithium demand could increase eightfold by 2040, and most analysts are optimistic about rapid growth in the sector.
Electricity demand in Ontario is set to increase by 75% by 2050, according to the province's Energy system operator. Proposals for new electricity generation facilities, including new small modular reactors (SMRs) and the possibility of large-scale nuclear plants are being examined.
It has been a productive week for our clients, and we are pleased to present our round-up of their news released between November 25 - 29, 2024.
Mining
On November 25, 2024, Sokoman Minerals Corp. (TSXV: SIC) (OTCQB: SICNF) announced that it has filed Management Proxy Materials for its annual and special general meeting of shareholders. The Meeting is currently set to be held on January 8, 2025, in Vancouver, BC, although the actual date may change because of the Canadian postal strike. At the Meeting, Sokoman shareholders will be asked to approve a special resolution (by a margin of two-thirds of votes cast) to reorganize Sokoman’s share capital to facilitate a spin-out to shareholders of approximately 2 million of Sokoman’s 4 million shares of Vinland Lithium Inc. Vinland holds the Killick Lithium Project and is currently owned by Sokoman (40%), Benton Resources Inc. (“Benton”) (40%) and Piedmont Lithium Newfoundland Holdings LLC (“Piedmont”), a wholly-owned subsidiary of NASDAQ-listed Piedmont Lithium Inc. (20%). Benton is concurrently seeking the approval of its shareholders for a similar 2 million share spin-out. The TSX Venture Exchange has conditionally agreed to list the approximately 10 million issued shares of Vinland, of which approximately 40% will be in the hands of Sokoman and Benton shareholders. Subject to the two spin-outs being completed.
The exact ratio of Vinland share per Sokoman share will be determined prior to completion in January 2025. The exchange ratio is dependent on the number of Sokoman shares issued at the time of completion. Some of the key points for shareholders are as follows:
The Killick Lithium Project holds excellent discovery potential in a newly discovered lithium belt
Piedmont, a wholly-owned subsidiary of NASDAQ-listed Piedmont Lithium Inc., completed a 2023 financing in Vinland of CAD$2.0M @ CAD$1.00 per share to hold 19.9%
Piedmont Lithium Inc. is one of North America’s leading lithium companies
Newfoundland is ranked as one of the top jurisdictions to explore and develop mineral potential
Piedmont Lithium Inc. has vast technical and geological knowledge in similar geology to that of the Kraken pegmatites
Vinland holds indirectly, through its subsidiary Killick Lithium Inc., a 100% interest in the Killick Lithium Project
Piedmont will have the option to earn up to a 62.5% direct interest in Killick Lithium Inc. by spending CAD$12.0M in exploration and development during the period of the option
Upon Piedmont completing all earn-in options, Piedmont/Piedmont Lithium Inc. will have paid Sokoman and Benton a total of CAD$10.0M in Piedmont Lithium Inc. shares in addition to having funded all the Vinland exploration and development costs
Sokoman and Benton to collectively retain a 2% NSR on the Killick Lithium Project
Full details of the spin-out are contained in a Management Information Circular dated November 18, 2024, and filed under the Company’s profile on sedarplus.ca. This circular contains detailed information on Vinland as a stand-alone company and will be mailed to registered shareholders once the postal strike is over. It will contain details of the final Meeting date, as that appears likely to change as of the date of this news release. In addition to the spin-out resolution, Sokoman shareholders who attend the Meeting will attend to annual matters, including consideration of Sokoman’s June 30, 2024, audited financial statements, the election of directors, appointment of auditors, and approval of Sokoman’s stock option plan. On November 26, 2024, Falcon Gold Corp. (TSXV: FG) (FRA:3FA) announced that it had closed the second tranche of its previously announced non-brokered private placement by issuing 9,000,000 flow-through units at $0.04 per FT Unit for gross proceeds of $360,000. Each FT Unit consists of one common share of the Company issued as a "flow-through share" and one-half of one common share purchase warrant. Each whole Warrant entitles the holder to purchase one Common Share at a price of $0.08 per Warrant Share for a period of two (2) years. The net proceeds from the sale of the FT Units will be used to incur "Canadian exploration expenses" within the meaning of the Income Tax Act (Canada) on the Company's properties in the province of Newfoundland, Ontario, and Quebec. None of the proceeds from the Private Placement will be used for payments to non-arm's length parties or persons conducting investor relations activities. On November 26, 2024, Athena Gold Corporation (CSE: ATHA) (OTCQB: AHNR) disclosed that it has engaged CHF Capital Markets Inc. ("CHF"), a distinguished Canadian firm specializing in investor relations and capital markets, to act as its representative and deliver capital markets services. "Athena Gold is thrilled to partner with CHF Capital Markets as we embark on a critical phase of our growth. With CHF and its CEO, Cathy Hume, both highly esteemed in the mining sector, we are poised to significantly enhance our communications, social media presence, and outreach within the investment community," stated Mr. John Power, President and CEO of Athena Gold. Cathy Hume, CEO of CHF Capital Markets, shared her enthusiasm: "We are excited to work with Athena Gold, especially as they advance their flagship Excelsior Springs project in Nevada and its emerging Laird Lake Project in the prolific Red Lake Gold District. Both projects have incredible potential, and we look forward to leveraging our expertise to amplify Athena's story and connect them with the right investors and stakeholders." Effective immediately, the CHF services agreement will focus on investment community outreach, corporate communications, and digital marketing for a term of 12 months. On November 27, 2024, Sokoman Minerals Corp. (TSXV: SIC) (OTCQB: SICNF) announced that a minimum 1,500 m diamond drill program has begun to test the Western Trend gold zone based on information gained in the trenching program. Drilling will consist of 20 to 30 diamond drill holes testing along strike / down dip of the newly discovered, east-west trending, gold-bearing vein network exposed in the Western Trend trench, a splay off the main, north-trending vein system similar to the Footwall Splay trend off the main Eastern Trend. The trenching was initiated as a first step towards a conventional (drill and blast) bulk sample from the Western Trend. Timothy Froude, P.Geo., President and CEO, states, "We are excited about the next few months at Moosehead, as we will not only be receiving the first metallurgical test results for the property. We are also beginning a drilling program based on the results of the trenching program at the Western Trend, the first step towards a bulk sample at Moosehead. All three programs are intertwined since the drilling will influence the bulk sample extraction, and the metallurgical work will strongly influence how and possibly where the sample is processed. The final assay results for channel samples in the Western Trend trench confirm the significance of the newly recognized East-West trend of high-grade mineralization, justifying the 1,500 m drill program. Dr. Coller's recent visit to the property focused on the Western Trend trench exposure, will help him determine the structural setting at Moosehead and ultimately lead to recommendations for deep drilling at Moosehead." Western Trend Channel Sample Results The remaining channel sample results, 21 samples from channels 8 to 15, from the Western Trend trench (see channel sample location map), confirm that an east-west trending, high-grade vein system (the East-West Splay) occurs in the Western Trend. It is highlighted by channel #8, which returned 8.10 m of 7.09 g/t Au, including 3.20 m of 14.29 g/t Au. A total of 41.2 m, representing 57 separate samples, ranging from 0.15 to 1.10 m (with a median length of 0.73 m), returned an average weighted grade of 5.79 g/t Au with all samples analyzed by total pulp metallic assaying at Eastern Analytical Ltd. in Springdale, NL.
Channel Sample Location Map
Western Trend Diamond Drilling
Based on observations from the Western Trend trench, a minimum 1,500 m diamond drill program is planned to extend the main vein trend and the newly recognized East-West Splay by up to 200 m along strike and 80 m vertically. To date, four drill holes have been completed with all intersecting visible gold-bearing quartz vein zones. The program is expected to continue to the Christmas Break, on or about December 19, 2024. All analyses are pending.
Bulk Sampling
The proposed 1000 m3 (approximately 2,700 tonnes) conventional bulk sample from the Western Trend trench area is in the permitting stage. It will await the metallurgical testing results on the 242 kg sample (split between the three types of mineralization) at Base Met Labs in Kamloops, B.C., and the results of the diamond drill program. The Company is in discussion with several groups regarding bulk sample processing. Also, the Company expects a report on progress on the Footwall Splay bulk sample from Novamera Inc. later this quarter, including plans for the next stage of the bulk sample program.
Metallurgical TestingThe 242 kg metallurgical sample (split between the three types of mineralization) is being tested at Base Met Labs in Kamloops, B.C. The first stage work involved establishing the head grade for all three samples, with the results summarized below:
Quartz veins - 58.8 g/t Au grade
Wallrock (sediment) - 0.84 g/t Au grade
Wallrock (altered dyke) - 2.46 g/t Au grade
Other studies, including gravity recoveries, leaching, etc., are ongoing and expected before year end.
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