Author: TSX Stocks

TD Bank on Thursday warned of a challenging 2025 and suspended its medium-term earnings forecast as Canada’s second-biggest lender works through its anti-money laundering remediation program following a U.S. regulatory probe.

Shares of TD, which faces an asset cap and a $3 billion penalty following a probe by U.S. regulators last year into its anti-money laundering program, were down about 5% after it said it would only update its targets in the second half of 2025.

TD also said it would hold a strategic review of opportunities, as it would take at least four years for it to complete its audit and regulatory reviews.

2:17
Business Matters: TD Bank to pay $3 billion USD in historic money-laundering settlement with U.S. Justice Department

“For fiscal 2025, it will be challenging for the bank to generate earnings growth as it navigates a transition year,” TD said in a statement as it works through its anti-money laundering remediation with investments in its risk and control infrastructure.

TD ran into problems with U.S. regulators for shortfalls in its risk and compliance program that provided ground for a host of illicit activity, from fentanyl and narcotics trafficking to terrorist financing.

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Waiting another half a year or more for management to disclose the longer-run implications of its U.S. consent order “leaves the stock without a proper anchor,” Scotiabank analyst Meny Grauman said.

TD issued its updates after the lender and Bank of Montreal, two of Canada’s biggest banks, missed analysts’ estimates for quarterly profit, reflecting weakness in their U.S. businesses and bigger-than-anticipated funds to cover potential loan losses.

In contrast, the smallest of the country’s big five banks – Canadian Imperial Bank of Commerce – reported a fourth-quarter profit that surpassed estimates, helped by smaller-than-expected loan loss provisions and strength at its Canadian retail arm.

BMO and TD have expanded in the U.S. through a series of acquisitions over the years, as they sought growth opportunities outside of Canada, catering to scores of clients on the West and East Coasts.

However, the businesses ran into problems.

BMO has also faced credit issues as some loan books have weakened due to clients struggling to repay their loans. TD disclosed the U.S. regulatory probe shortly after it terminated its $13.4 billion acquisition of Tennessee-based lender First Horizon last year, a deal that would have given it more ground in the Southeast U.S. The probe followed investigations at its retail branches that occurred as early as 2021.

2:12
Business Matters: Royal Bank of Canada reports $4.22-billion Q4 profit, raises quarterly dividend

TD’s adjusted net income fell 8% to C$3.21 billion in the fourth quarter. On a per-share basis, TD earned C$1.72, which was 10 Canadian cents lower than analysts’ average expectation, according to LSEG data.

“We are less disappointed with the quarter itself … and more disappointed with the updated guidance provided by the bank, or lack thereof,” Scotiabank’s Grauman said.

BMO earned C$1.90 per share in the fourth quarter, missing analysts’ average estimate of C$2.41.

CIBC earned C$1.91, beating the average estimate of C$1.79.

BMO’s shares were down nearly 1.7% in early trading on the Toronto Stock Exchange, while CIBC’s shares rose 3.9%.

The results wrap up fourth-quarter earnings for the Canadian banks with mixed results and cautious optimism headed into fiscal 2025.

Welcome to a roundup of some of our financing, exploration, and development stories on Theassay.com over the last week. To keep up to date with all the latest headlines, subscribe to our weekly newsletter.

Financing and M&A

European Lithium Limited (ASX: EUR | FRA: PF8 | OTC: EULIF) has announced it has completed the acquisition of 100% of the issued share capital of LRH Resources Limited, which holds 100% of the rights, title and interest in the Leinster Lithium Project in Ireland from Technology Metals plc in an all-script transaction.

Tony Sage, chairman of EUR, commented, “The acquisition shows our commitment to continue expanding in the European lithium sector and illustrates our capability to identify, secure and build in highly prospective lithium provinces, leveraging our world class exploration and project development expertise. This development is strategic for the European Union to establish the sustainable supply chains of the critical minerals essential for the transition to low carbon emission economy. By using our shareholding in CRML to purchase this asset demonstrates the value of our investment in Critical Metals Corp.”

New exploration and development

Also, Lahontan Gold Corp. (TSXV: LG | OTCQB: LGCXF) has announced it has filed on SEDAR+ an independent technical report and updated mineral resource estimate (MRE) titled “Santa Fe Project Technical Report,” effective 9 October 2024, and dated 27 November 2024, for Lahontan’s Santa Fe Mine gold and silver project, Santa Fe District, Nevada.

The technical report was prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects and supports the disclosure made by the company in its 15 October 2024 news release announcing the updated mineral resource estimate.

There are no material differences in the technical report from the information disclosed in the 15 October 2024 news release. The Technical Report is available for download under the company’s profile on SEDAR+ and is also available on the company’s website.

Drilling results

Asian Battery Metals (ASX: AZ9) has announced a significant expansion of its Oval Cu-Ni-PGE Project in Mongolia’s Gobi-Altai region, with the discovery of additional massive sulphide mineralization 500m northwest of its previous high-grade intercept.

The latest diamond drill hole, OVD025, has intercepted an impressive 3.6m zone of massive sulphide mineralization from 48.2m depth, containing substantial concentrations of valuable minerals: 12% chalcopyrite, 10% pentlandite, 65% pyrrhotite, and 6% pyrite. This intercept is particularly significant as it sits within a broader 12.4m zone of mineralization starting from 44.6m depth.

What makes this discovery particularly exciting is its location relative to the company’s previous high-grade intercept in hole OVD021, which returned exceptional grades of 8.8m @ 6.08% Cu, 3.19% Ni, 1.63g/t E3, and 0.11% Co. The presence of two massive sulphide zones 500m apart suggests the potential for additional discoveries within the mineral system.

Meanwhile, Grid Metals Corp. (TSXV: GRDM | OTCQB: MSMGF) has announced positive drill results from the first six drill holes of its maiden drill programme at the Eagle gabbro, located within the MM copper/nickel project in southeastern Manitoba.

 Dr. Dave Peck, P. Geo., Grid’s vice president of exploration, stated “Grid has embarked on an ambitious drill programme targeting the 4km-long Eagle gabbro with the dual objectives of establishing the existence, grade and potential continuity of near-surface disseminated sulphide Cu/Ni mineralization and discovering localized, higher grade massive Cu-Ni sulphide deposits. The Eagle gabbro is the easternmost part of the 20km long Mayville – Eagle Complex, which hosts Grids’ pit-constrained 32Mt Mayville Cu-Ni sulphide resource. With a successful drill programme, we will demonstrate the potential for the Eagle gabbro to host large additional tonnage of near surface copper-rich resources.”

Other news

Finally, Desert Metals Limited (ASX: DM1) has appointed non-executive director, Patrick Flint, as chairman.

Desert Metals explains that Mr Flint brings extensive experience and significant corporate expertise to the board. He is a qualified accountant and a member of the Australian Institute of company directors. He has been involved in the resources sector for 25 years as a director or company secretary of ASX and Toronto Stock Exchange listed companies with mineral projects in Australia, Africa, and Asia.

Additionally, he has significant experience with project acquisition, exploration and development, joint venture negotiation and management, fundraising and corporate management, and governance. Mr Flint joined the board of Desert Metals earlier this year.

Canada’s main index of stocks hit a new record on Wednesday. This was largely due to the performance of technology and financial companies, as well as investors’ assessment of strong quarterly earnings by two major domestic lenders.

The Toronto Stock Exchange S&P/TSX Composite Index was up 28.72, or 0.11% at 25,664.45, but was still trading below its record high.

Angelo Kourkafas is an investment strategist with Edward Jones Investments.

I would say that the market is showing some hesitation in light of last month’s significant gains.

TSX’s heavyweight financial sector gained 0.2%. Royal Bank of Canada gained 1.2% after exceeding analyst expectations for its fourth-quarter profits, thanks to its acquisition of HSBC’s domestic business in this year, and strong wealth division.

RBC still set aside more money than anticipated for possible soured loans. This indicates that clients have struggled to pay off their credit cards and mortgages despite numerous rate cuts across Canada.

National Bank of Canada reported an increase in its quarterly profit due to its wealth management division, despite its stock falling 3.4%.

Bitfarms led the sector with a 5.3% increase after Alliance Global Partners began coverage of the blockchain farm operator. The rating was “buy”.

Dollarama’s 4.3% decline in sales pushed down consumer discretionary by 1% despite Dollarama reporting higher third-quarter profits and sales.

Energy sector dropped by 1.1%. Baytex Energy fell over 5% as two brokerages reduced their target prices.

The headline Canadian business activity index increased to 51.2 in November from 50.4, its highest level since the beginning of April 2023.

The focus south of the border shifted towards Fed Chair Jerome Powell’s comments made later that day, and the November monthly employment report on Friday for further clues about the U.S. Federal Reserve’s interest rate path.

The traders now assign a 72.7% probability of a cut in the Fed’s policy on December 17-18. (Reporting and editing by Nikhil Sharma, Ragini Mathur)

(source: Reuters)