Categories: General Market Commentary
Topics: General Market Commentary

Gold sets record, lithium rebounds

Hey everyone,

This is your Resource Stock Digest editor Gerardo Del Real here reaching out just to give you some thoughts on the things I’m looking for this week.

Gold, as you’re likely aware, is now trading at all-time highs above US$2,100 an ounce. I envisioned this happening in the second half of the year in anticipation of rate cuts… but the yellow metal decided to front-run those cuts. 

That’s all well and good. Yet, what we're still not seeing is the follow through with a lot of the gold equities, whether it's the explorers, developers, or producers. Last week, for example, we saw Newmont post a 52-week low of US$29.42 per share. It has since rebounded to ~US$33 a share. 

I’m definitely watching to see if — much like lithium stocks from last week, which were up some 30% to 40% from recent lows — the gold equities follow suit. 

We’ve been seeing a severe disconnect between the gold price and gold equities for quite some time. But now with gold launching into uncharted territory above US$2,100, we could be setting up for a very compelling opportunity in select gold equities.   

I’ll also be keeping a close eye on how much the lithium equities pull back following the 30% to 40% rally I was just speaking to. I do believe we’ll get a bit of a pullback but I anticipate it being both healthy and temporary.

It’s definitely going to be interesting… especially with it being PDAC week. As you know, the crème de la crème — as well as the ‘not so’ crème de la crème — tend to get together for the Prospectors & Developers Association of Canada conference once a year in Toronto.

And I certainly don’t see it as a coincidence that we’ll be seeing a flurry of news this week as companies tend to save their ‘best news’ for the conference as everyone in the resource space loves talking success. So look for a major uptick in news flow this week sector wide. 

And speaking of that, T2 Metals (TSX-V: TWO)(OTC: AGLAF) just reported a fantastic intercept at its Sherridon Volcanic-Hosted Massive Sulphide (VHMS) copper-zinc project in Manitoba, Canada. 

Sherridon is a robust copper-dominant project with a lot of tonnage. And now, the T2 team is reporting an intercept of 6.8 grams per tonne gold over 23.5 meters. That intersection lies only 20 meters below surface and includes some of the highest gold grades ever discovered at the project. 

To me, this particular drill hit presents an opportunity for a new type of mineralization at Sherridon that can add value very quickly, and we’re already beginning to see that with the stock up some 20% this morning and up around 200% in just the last few trading sessions. 

The other big news we had last week, and that I’ll be following up on, is Q2 Metals (TSX-V: QTWO)(OTC: QUEXF) acquiring 100% of the large-scale Cisco lithium property in James Bay, Quebec. The project boasts historical assays, including 115.4 meters at 1.21% lithium. That’s very exciting news for Q2 Metals and QTWO shareholders. 

As a biased shareholder myself, I’ve been very bullish on this team’s ability to bring in and advance lithium projects of merit. And Q2 Metals being cashed up is a big advantage that gives the company that flexibility to bring in high-potential lithium projects such as Cisco.

I’m really looking forward to seeing what comes out of that project, as well as results from the recently completed winter drill program at the flagship Mia property, also in James Bay. The market is clearly liking what it’s seeing with QTWO up from around C$0.20 last week to currently above C$0.50 per share. 

That’s just some of what we’ll be watching for this week. Like I said, PDAC is always a strong week for positive company news. 

Let's get it!

Gerardo Del Real
Editor, Resource Stock Digest