March 15, 2024
An insightful peek into the metals and energy markets introduces Malcolm Shaw’s intriguing investment ideas, laying the groundwork for curious investors seeking to delve into the commodity sector terrain.
The radiant shine of the gold sector has captivated the spotlight this month, reaching unprecedented price peaks.
Despite the remarkable upsurge, lingering skepticism swirls among investors, scarred by previous false alarms. Nonetheless, as central banks amass gold and the U.S. dollar’s fortitude dwindles, the future of this precious metal gleams brighter than ever.
The Resurgence of Gold and Sentiment among Investors
Gold’s recent spike over the $2,080 threshold has caught many off guard. The sector witnesses scarce involvement, leaving ample room for the gold rally to forge ahead as disbelief wanes, much like the energy sector’s upward trajectory in late 2020 and early 2021.
Amidst the recent boom, various gold stocks are tethered to historically appealing valuations based on price-to-net asset value (P/NAV) metrics, free cash flow yields, and cash flow multiples.
Even heavyweight players such as Newmont Corp. remain far from exuberance, trading near their five-year lows. These enticing fundamentals, coupled with gold’s unprecedented highs, hint at the sector’s readiness for a long-lasting rally.
Diverse Commodity Trends to Monitor
While gold embraces the limelight, other commodities twinkle with promise. Silver rides the coattails of gold, with some enthusiasts predicting it might outshine the yellow metal.
Copper, a linchpin in the energy shift, sails past the critical $4.00/pound mark. A weakening greenback and robust supply-demand dynamics spell good omens for the red metal, with zinc closely trailing.
Oil and natural gas equities persist as bargains relative to other sectors. The structural supply-demand balance for uranium remains optimistic. Meanwhile, lithium’s flaccidity could make it susceptible to tax-induced selling, and Nickel contends with pressure from fresh Indonesian supply.
Firm and Hold the Line
As a seasoned hand in commodities, my strategy remains lucid. A glance at the TSX Venture index’s historical graph unveils the potential for substantial upsides if this heralds the dawn of a synchronized commodity climb. Should the current vigor persist for a few more weeks, the Venture index might witness a “golden cross,” where the 50-day average eclipses the 200-day moving average — an auspicious technical cue for those eyeing the next significant stride in commodities.
While my outlook teems with cautious optimism, the act of documenting these thoughts could hint at an impending market consolidation before further ascent. A noteworthy contrast to the bygone spell of lackluster performance, the prevailing market milieu hints at a plausible enduring rally in commodities.
My spirits are unusually bright these days, harboring hope that sharing these insights won’t inadvertently stymie the market’s evolution. Proceeding, I furnish reflections on both tried-and-true and novel investment prospects while upholding a steady and prudent stance, echoing the mantra of “firm and hold the line.”
Sturdy Picks in Energy and Copper
Tenaz Energy Corp. ATUUF:
Among my favorites, Tenaz Energy stands out. Endowed with a disciplined M&A strategy and a nimble, seasoned leadership cadre, Tenaz Energy steers towards a promising future amid the current market backdrop, where significant energy players seek to streamline their portfolios and offload non-core assets to capable, credible teams.
With its modest share count and market cap below $100 million, Tenaz Energy possesses abundant headroom for growth as it unfurls its operational blueprint. Given its M&A vigor, Tenaz’s course towards growth seems ordained. Simultaneously, Tenaz stands as one of the most cost-effective energy stocks, trading at one of the lowest EV/CF multiples (around 1.5x versus industry peers at 2.5-4x). I opine that the company embodies one of the most enticing risk-reward scenarios in my career. The management exudes excellence, and I reckon patience serves as the sole prerequisite as this adept team propels the firm towards its production aspirations of 50,000-100,000 barrels of oil equivalent per day, achieved through judicious and deliberate acquisitions. Patience may be rare, but I trust those who wield it astutely concerning Tenaz will reap generous rewards over time.
TAG Oil Ltd. TAOIF:
TAG Oil’s drilling crusade in Egypt, targeting the Abu Roash F formation, has magnetized specialists’ attention, yet drilling hurdles have placed the stock in a holding pattern as the market anticipates test outcomes from its premiere horizontal well. Noteworthy is the similitude of the Abu Roash F formation to the prolific Eagle Ford play in the southern swath of the United States.
Teeming with potential in the company’s Badr concession zone, boasting 60-80+ prospective locations, TAG Oil is positioned for substantial advancement in the years ahead, contingent upon favorable initial production rates from its pending well test. Any yield surpassing 1,000 barrels of oil per day in the maiden production sets a triumphant tone. With flow assessments slated for early April, TAG Oil emerges as an opportune and enthralling
Exploring Opportunities in the Energy and Mining Sector
New Stratus Energy Inc.
In the ever-dynamic world of energy, New Stratus Energy Inc., under the leadership of the well-connected Jose Francisco Arata, is striving to emerge as a force to be reckoned with in Latin America. The company’s strategic moves in Venezuela are not just about the present; they lay the groundwork for far-reaching growth across the region, potentially altering the energy landscape.
Condor Energies Inc.
Venturing into Central Asia, Condor Energies Inc. offers a rare gateway for investors seeking to tap into niche energy markets. With key contracts secured in Uzbekistan and Kazakhstan, the company’s nimble approach exemplifies its adeptness at capitalizing on unique market opportunities, paving the way for substantial growth and market relevance.
Valeura Energy Inc.
Amidst the tumultuous energy sector, Valeura Energy Inc. shines as a beacon of value for discerning investors. Presenting a strong financial position and a robust strategy for extending the lifespan of its assets, the company’s undervalued stock may hold significant promise for those willing to ride the waves of the market with a long-term perspective.
Hercules Silver
Beneath the rocky surface of Idaho lies a story of transformation and potential riches. With a recent infusion of capital and a strategic shift towards copper exploration, Hercules Silver is poised to make waves in the market. As drills pierce the ground in search of copper treasures, the company’s journey towards unlocking hidden wealth has all the makings of a modern mining epic.
Critical Elements Corp.
Patience is a virtue in the world of investments, and Critical Elements Corp.’s journey is a testament to this age-old adage. While setbacks may have blurred the company’s path, the underlying promise of its lithium project remains intact. For astute investors willing to weather the storms of uncertainty, the rewards could be bountiful.
Libero Copper and Gold Corp.
In the high-stakes game of mining, the involvement of seasoned players can often tilt the odds in favor of success. With the guidance of resource veteran Frank Giustra, Libero Copper and Gold Corp. stands at the cusp of a potentially lucrative venture. As drills churn in the Colombian soil, the company’s quest for mineral treasures holds the promise of substantial rewards for the brave-hearted investor.
Sun Peak Metals Corp.
The allure of hidden riches beckons investors to uncharted territories, where risks abound but rewards can be monumental. Sun Peak Metals Corp.’s venture into Ethiopia’s frontier market bears the echoes of past triumphs. As drilling operations commence in search of mineral deposits akin to past successes, the company’s narrative unfolds as a tale of bold exploration amidst uncertain terrains.
Atex Resources Inc.
In the copper-rich lands of Chile, Atex Resources Inc. sets the stage for a grand unveiling of mineral wealth. Under the patronage of Pierre Lassonde, the company’s quest for expansion and discovery takes center stage. With each drill piercing deeper into the earth, Atex inches closer to potentially reshaping the copper landscape and attracting the gaze of industry giants.
Gold Ideas
Amidst the glimmer of gold and the allure of riches lies a trove of opportunities waiting to be unearthed. From the tried-and-tested to the budding prospects, the sector offers a tapestry of investments for those with a discerning eye. As market dynamics ebb and flow, these glittering tickers stand as beacons of potential wealth, beckoning savvy investors to partake in the age-old pursuit of fortunes.
- Kinross Gold Corp. KGC
- Falco Resources Ltd. FPRGF
- OceanaGold Corp. OCANF
- New Gold Inc. NGD
- Aya Gold and Silver Inc. AYASF
- Goliath Resources Ltd. GOTRF
- Ascot Resources Ltd. AOTVF
- Karora Resources KRRGF
- Osisko Mining Inc. OBNNF
- Rupert Resources Ltd.RUPRF
The Emergence of a Potential Uranium Gem
A Hidden Gem in the Uranium Landscape
Amidst the ever-exciting world of uranium exploration, a glint of hope shines through in the form of CanAlaska Uranium Ltd. (CVVUF). The recent unveiling of an astounding drill hole intercept at the West McArthur joint venture project, where CanAlaska secures a significant 83.35% stake, has set the industry abuzz.
With 16.8 meters of mineralization boasting an impressive grading of 13.75% eU3O8, CanAlaska’s achievement is nothing short of extraordinary. Such results firmly establish CanAlaska as a standout amidst junior uranium exploration companies, marking a milestone in the quest for substantial discoveries.
Prospects on the Horizon
While these reported grades are rooted in gamma probe readings (signified by the “e” prefix before U3O8), the anticipation builds as CanAlaska anticipates the forthcoming chemical assay results within the next six to eight weeks.
The ensuing period is primed for CanAlaska to embark on additional drilling activities around this high-grade intercept, beckoning investors to stay vigilant for impending advancements. Such exceptional grades often herald the presence of a robust mineralizing system, hinting at the promising potential for pronounced scale.
CanAlaska’s groundbreaking discovery has certainly captured the imagination of both the mining industry and eager investors, paving the way for an intriguing trajectory in the realm of uranium exploration.
- Tag Oil Ltd. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
- Malcolm Shaw: I, or members of my immediate household or family, own securities of: All. I determined which companies would be included in this article based on my research and understanding of the sector.
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