Gerardo Del Real,
Editor
Oct. 7, 2024
This is your Resource Stock Digest editor Gerardo Del Real here with some Monday coffee talking points.
What am I watching this week?
Lithium is back, folks! Rumors of lithium's death have been greatly exaggerated. In fact, Rio Tinto just confirmed it is in talks with US producer Arcadium Lithium in regard to a potential multi-billion-dollar take out. Arcadium’s market value presently stands at roughly US$3.3 billion — so this would be no small buyout.
Clearly, Rio Tinto believes in a bright future for lithium as global demand for EVs and hybrids continues to grow. Rio’s positioning is having a positive effect on lithium equities across the board with many of our favorite lithium names spiking anywhere from 10% to 30% and setting the stage for what could be the start of the next bull run for the lightest metal on Earth.
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Naturally, I’m also keeping a close eye on gold. We’re starting to see a slight correction in the gold price from US$2,680 per ounce to currently around US$2,665. Ideally, we’d like to see that correction last another week or two. As you know, we’ve had $100 rises in the gold price, basically, since August… and so I believe a consolidation to around the US$2,600 per ounce level would be a healthy one.
The dollar index is back above 102. It’s very interesting to see gold above US$2,650 with the dollar index above 102 and looking to make a push toward 103. We’ll keep a close eye on that.
We’ll also be looking to see if silver can break out above that stingy US$32/oz resistance. We’ve seen resistance right at that level the last several times here recently. I believe that if the metal is able to break above US$33 and then hold it, we could very realistically see a spirited push to the US$36 to US$38 level.
Uranium has been gaining quite a bit of momentum of late, driven by the numerous tailwinds in the sector. There are a lot of bargains presently in the top junior uranium explorers with high-profile projects in tier-one mining jurisdictions.
Generally speaking, it’s absolutely fantastic to see companies reporting on their exploration and drilling programs in this upward metals market.
Q2 Metals (TSX-V: QTWO)(OTC: QUEXF), as just one example, has been reporting phenomenal results from its flagship Cisco lithium project in James Bay, Quebec, for the last several weeks in a row now. We're currently awaiting assays from Hole-21, which produced the longest spodumene-pegmatite interval to-date at the project at 347 meters. If history is any guide, the grade should hold right in that 1.4% to 1.6% Li2O range. The stock is at an all-time high today on the recent news flow and likely headed higher.
That’s what I’m watching. Have a great week everyone.
Let's get it,
Gerardo Del Real
Editor, Resource Stock Digest