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Hey hey – another week is upon us, so let’s dig in. Metals, stocks, and above all, opportunities.
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We’ve got elections, commodities, and market moves to look forward to, plus a bunch of mining deals announced last week, all summed up in a meme (because why not!).
Let’s dig in:
- Chile’s monthly copper output will be released on Wednesday. Looking ahead, after 2 months of drops (-5.4%, -2.1%, respectively), wider historic data vs recent price relative weakness, and low inventories in China, another contraction seems more likely for copper. Chile has been falling in production, but still has the crown with 23% of global copper in 2024.
- Gold is taking some well-deserved shore leave after briefly reaching $3,500/oz last week, as a more constructive stance leaves extreme fear behind (at least for now!). Given JP Morgan said in a note that $4,000/oz gold is a real possibility, it looks like most of you agree*… It’s not time to sell just yet. Plus Chinese gold-backed ETFs had massive inflows in April, more than 3x recent highs.
*If you’re viewing this via email, to view this poll, click on the date
- US markets, dollar poised for calmer week and likely mild recovery, although these swings may keep big moves at bay. Consumer Discretionary and IT led the rise at +1.96% and +1.62% (S&P 500). But there could be more pain ahead, as Bridgewater cautioned investors in their influential newsletter, saying they “see exceptional risks to US assets.”
- The disruptive effects of trade tariffs are becoming more evident, as ships coming into the US have plummeted, and many make the trip back empty. Negotiations are ongoing, but hard to say where it will all land (or sail!). Meanwhile, shipbuilding stocks are up 40-100% YTD, which is interesting since China builds 70% of all ships, as per JP Morgan.
- Economic indicators: China, US PMI; EU, US, Canada, Mexico GDP; Brazil, foreign investment.
- Miner earnings: Ivanhoe Electric IVN, Alamos Gold AGI, Eldorado Gold ELD.
- The Trump administration is considering investing directly in companies mining/processing critical minerals. This, on top of fast-tracked permitting, may further support US-based firms. While majors are unlikely to have a big reaction, juniors and midtiers in advanced exploration, development could see some crystallised upside. We’ll be looking further into this here.
- Plus elections in Canada (Carney seems poised to win, despite wide opposition for his stance against O&G), Australia (w/polls favouring Labor, which is expected to be less favourable for mining) and Singapore; short week across China, Latin America due to Labour Day holiday.
If copper contracts for the 3rd month in a row, we may see a reaction in short-term prices, this time due to fundamentals, not as preparation for imminent tariffs as in the previous run. Unlikely to be as sharp.
Overall, looks like we’ll have a calmer week.
But that’s not all…
ICYMI
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Deal news
These are the latest acquisitions and deals announced last week. Normally, we expect to see a lift in targets and weakness in acquiring parties:
- Equinox sweetens offer for Calibre, giving the transaction a total value of C$2.8 billion. Target rises to 13-year high
- Barrick to sell Donlin Gold stake to Paulson, Novagold for $1B
- China’s CMOC to Buy Canada’s Lumina Gold and its project in Ecuador for $420M in an all-cash transaction
- Triple Flag proposes to acquire Orogen Royalties Inc. for a total consideration of $305M
- Sierra Metals (TSX: SMT) agreed in principle to be taken over by Alpayana for C$230M. BMO who is advising Sierra, called the new amount ‘fair’
For more on deals, make sure you are following me on X.
This week, I’ll close this newsletter with a reflection.
Toyota’s chairman reportedly proposed a $42 billion buyout of Toyota Industries (they manufacture textiles and parts for Toyota’s cars). A big deal if it does happen, but not unusual among energy and automakers.
A reminder that the metals and mining sector remains small, yet it is crucial for the world.
This meme we made a while back still fits.
Size matters, but like beauty, it is in the eye of the beholder!
And that’s it for today.
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*Sources: Reuters, Bloomberg, Mining.com, TradingView, plus our own research
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