Top 5 Canadian Mining Stocks This Week: Gold Stocks Surge as Price Strength Continues
The S&P/TSX Venture Composite Index (INDEXTSI:JX) gained 35.21 points this week to close at 580.43. Meanwhile, the S&P/TSX Composite Index (INDEXTSI:OSPTX) was up 787.22 points to finish the week at 23,568.65.
Statistics Canada released August’s consumer price index (CPI) on Tuesday (September 17). The report indicated that inflation had increased 2 percent on an annualized basis, down from the 2.5 percent annual increase seen in July. August’s annual CPI marked the smallest increase since February 2021, when inflation was at 1.1 percent.
Month-on-month, CPI was down 0.2 percent in August after increasing 0.4 percent the prior month.
The slower pace was attributed to a decline in gasoline prices, which fell 5.1 percent on a yearly basis and 2.6 percent on a monthly basis. While mortgage interest costs are a large contributor to the CPI’s gains, August’s data showed they are slowing as well, with an 18.1 percent year-over-year gain compared to its 30.9 percent peak in August 2023.
South of the border, the US Federal Reserve announced a 50 point rate cut on Wednesday (September 18) as it shifts its focus away from inflation toward the labor side of the Fed’s dual mandate.
In his remarks following the decision, Fed Chair Jerome Powell said the US economy has come into balance, and that the cut puts the central bank in a good position to respond to changes to inflation or the labor market.
Powell added that he is encouraged by inflation easing toward the 2 percent target, but stressed that more data will be needed to demonstrate inflation is moving sustainably within the target range.
Following the announcement, US indexes spiked, but were highly volatile, and ultimately ended Wednesday largely flat. However, markets opened on Thursday significantly higher and experienced more stability throughout the day.
Between the close of trading on Wednesday and Thursday, the S&P 500 (INDEXSP:INX) gained 1.72 percent to 5,713.65, the Nasdaq 100 (INDEXNASDAQ:NDX) jumped 2.55 percent to 19,838.94 and the Dow Jones Industrial Average (INDEXDJX:.DJI) increased 1.24 percent to 42,024.7.
Gold and silver saw large gains shortly after the Fed meeting, but also saw high volatility — their gains were erased by the end of Wednesday. Like equity markets, the metals saw more stability and gains on Thursday, with gold gaining 1.16 percent to reach US$2,588.44 per ounce, and silver surging 2.48 percent to hit US$30.80 per ounce as of 4:00 p.m. EDT.
More broadly, the S&P GSCI (INDEXSP:SPGSCI) gained 1.03 percent on Thursday to close at US$534.
The metals soared even higher on Friday (September 20) as gold set a new intraday high of US$2,625.46 and a closing high of US$2,622.12. Silver moved as high as US$31.39 before closing at US$31.20.
How has this week’s news impacted Canadian resource stocks? Here are the top five gainers on the TSX and TSX Venture Exchange as of the end of trading on Thursday.
1. Big Ridge Gold (TSXV:BRAU)
Weekly gain: 72.73 percent; market cap: C$15.88 million; share price: C$0.10
Big Ridge Gold is an exploration company that has spent much of 2024 working to advance its flagship Hope Brook gold project in Newfoundland and Labrador, Canada.
Located on the southwest coast of the island of Newfoundland, the site consists of 1,003 claims in 5 licenses over 25,075 hectares. It has hosted historic mining operations between 1987 and 1997 and produced 752,163 ounces of gold.
The most recent mineral resource estimate, released in April 2023, showed indicated resources of 1.21 million ounces of gold with an average grading of 2.32 grams per metric ton (g/t), with additional inferred resources of 231,000 ounces with an average grading of 3.24 g/t gold.
On March 28, the company announced it had increased its ownership stake in the project from 51 percent to 80 percent after it issued 10 million common shares to First Mining Gold (TSX:FF,OTCQX:FFMGF) as part of its April 2021 earn in agreement. First Mining will retain the remaining 20 percent in the property until Big Ridge completes a feasibility study on the project.
Big Ridge released its most recent news for Hope Brook in July, when it announced its 2024 work program.
2. Almaden Minerals (NYSE:AAU)
Weekly gain: 60 percent; market cap: C$10.98 million; share price: C$0.08
Almaden Minerals is a precious metals exploration company working to advance the Ixtaca gold and silver deposit in Puebla, Mexico. According to the company website, the deposit was discovered by Almaden’s team in 2010 and has seen more than 200,000 meters of drilling across 500 holes.
A July 2018 mineral resource estimate shows measured resources of 862,000 ounces of gold and 50.59 million ounces of silver from 43.38 million metric tons of ore, and indicated resources of 1.15 million ounces of gold and 58.87 million ounces of silver from 80.76 million metric tons of ore with a 0.3 g/t cutoff.
In February 2022, Mexico’s Supreme Court of Justice (SCJN) ruled that the initial licenses issued in 2002 and 2003 would be reverted back to application status after the court found there had been insufficient consultation when the licenses were originally assigned.
Ultimately, the applications were denied in February 2023, effectively halting progress on the Ixtaca project. While subsequent court cases have preserved Almaden’s mineral rights, it has yet to restore the licenses to continue work on the project.
The most recent update on the state of the company’s licenses came on June 27, when it announced it had confirmed up to US$9.5 million in litigation financing that will be used to fund international arbitrations proceedings against Mexico under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
3. Prairie Provident Resources (TSX:PPR)
Weekly gain: 50 percent; market cap: C$39.39 million; share price: C$0.045
Prairie Provident Resources is an oil and gas exploration, development and production company with assets throughout Alberta, Canada.
According to an August 13 management discussion and analysis for the first six months of 2024, the company reported an average daily production of 2,341 barrels of oil equivalent, a sharp decline from the 3,648 barrels of oil equivalent during the same period in 2023.
The company attributes this decline to the sale of its Evi property in Northern Alberta, as well as well servicing and natural declines.
Prairie Provident’s share price has seen a recent boost following news on September 13 that it had entered into an agreement to extend the maturity of its senior secured credit facility to March 31, 2026. It also announced a C$13.2 million rights offering, with C$11.6 million of committed funding coming from Prairie Provident’s largest shareholder, PCEP Canadian Holdco, and an additional C$400,000 from Prairie’s directors and management.
The company said it will use proceeds to fund the drilling of at least two wells in the Basal Quartz formation before the end of 2024, along with workovers of existing wells to improve productivity.
4. Serabi Gold (TSX:SBI)
Weekly gain: 35.71 percent; market cap: C$114.66 million; share price: C$1.90
Serabi Gold is a gold producer and explorer that owns the Palito mining complex and the Coringa gold mine in Northern Brazil.
In the company’s Q2 production results and operational highlights released on July 17, Serabi reported that it had produced 18,101 ounces of gold during the first six months of the year, an increase over the 16,523 ounces produced during the same period in 2023. On a per-mine basis, Palito produced 9,386 ounces of gold while Coringa produced 8,623 ounces.
The gold company maintained its production guidance for 2024 at 38,000 to 40,000 ounces of gold.
In its most recent operational update on September 9, Serabi reported that upgrades at Coringa were on schedule and on budget with the ore sorter having been delivered and the ground works for the installation of the crushing plant progressing well.
Additionally, the company reported results from a 3,500 meter surface drill program at Palito targeting a southern step-out extension at the G3 vein. The returned assays included a highlight intercept of 20.47 g/t gold over 3.15 meters, including 43.72 g/t gold over 1.45 meters.
5. Roscan Gold (TSXV:ROS)
Weekly gain: 33.33 percent; market cap: C$41.28 million; share price: C$0.10
Roscan Gold is an exploration and development company working to advance its Kandiole project in the Republic of Mali. The company’s permits cover an area of 288.8 square kilometers and host several mineralized targets.
The company hasn’t made any exploration announcements in 2024, but has continued to raise funding. The most recent news came on September 11 when Roscan announced it had been approved by the TSX Venture exchange to extend the maturity date of its promissory notes of C$1 million.
In the release, the company also announced it intends to complete a non-brokered private placement with company director Michael Gentile for C$300,000.
On Monday, September 16, Roscan announced changes to its board of directors, with Nana Sangmuah being appointed as executive chairman and Rahul Paul being appointed to the board.
FAQs for TSXV stocks
What is the difference between the TSX and TSXV?
The TSX, or Toronto Stock Exchange, is used by senior companies with larger market caps, while the TSXV, or TSX Venture Exchange, is used by smaller-cap companies. Companies listed on the TSXV can graduate to the senior exchange.
How many companies are listed on the TSXV?
As of June 2024, there were 1,630 companies listed on the TSXV, 925 of which were mining companies. Comparatively, the TSX was home to 1,806 companies, with 188 of those being mining companies.
Together the TSX and TSXV host around 40 percent of the world’s public mining companies.
How much does it cost to list on the TSXV?
There are a variety of different fees that companies must pay to list on the TSXV, and according to the exchange, they can vary based on the transaction’s nature and complexity. The listing fee alone will most likely cost between C$10,000 to C$70,000. Accounting and auditing fees could rack up between C$25,000 and C$100,000, while legal fees are expected to be over C$75,000 and an underwriters’ commission may hit up to 12 percent.
The exchange lists a handful of other fees and expenses companies can expect, including but not limited to security commission and transfer agency fees, investor relations costs and director and officer liability insurance.
These are all just for the initial listing, of course. There are ongoing expenses once companies are trading, such as sustaining fees and additional listing fees, plus the costs associated with filing regular reports.
How do you trade on the TSXV?
Investors can trade on the TSXV the way they would trade stocks on any exchange. This means they can use a stock broker or an individual investment account to buy and sell shares of TSXV-listed companies during the exchange’s trading hours.
Data for this 5 Top Canadian Mining Stocks article was retrieved at 1:00 p.m PST on September 13, 2024, using TradingView’s stock screener. Only companies trading on the TSX and TSXV with market capitalizations greater than C$10 million are included. Companies within the non-energy minerals and energy minerals sectors were considered.
Article by Dean Belder; FAQs by Lauren Kelly.
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article.