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All dollar amounts expressed are in thousands of U.S. dollars unless otherwise indicated.
Q4, Full Year 2023 and Other Highlights
Written by Rich Duprey on . Posted in Canada. Leave a Comment
After hitting a 12-year low in late 2016 uranium spot market prices have more than tripled from $30 a pound in January 2021 to a recent peak of over $100 a pound, their highest level in 16 years. Although they pulled back to $95 a pound the market is still ripe for additional gains.
A combination of factors contribute to the rise. Energy demand is increasing globally and nations are exploring all possible sources to meet it. Especially after the Nord Stream 2 gas pipeline was sabotaged, nuclear energy is back on the table. Although Germany shut down its last remaining reactors last year, Japan, France and Norway all approved new measures for going nuclear. Over 20 countries have called for tripling nuclear capacity by 2050.
Yet the primary cause behind the recent spike was the world’s largest uranium producer Kazatomprom (OTCMKTS:NATKY) announcing it would not meet production goals for 2024 and 2025.
Kazakhstan produces over 40% of all the world’s uranium supply, according to the World Nuclear Association. Canada is second at 15% and Namibia comes in third with 11% of the total. However, no country produces more nuclear energy than the U.S. It accounts for 30% of global output.
Uranium miners are springing into action. Dormant mines in states such as Wyoming, Texas, Arizona and Utah were all recently restarted. With future growth assured, these are the three miners you will want to ride to new heights.
Cameco (NYSE:CCJ) is one of the world’s largest uranium miners. It owns mines in Saskatchewan and the U.S., as well as having a 40% stake in a joint venture with Kazatomprom for a mine in Kazakhstan.
The miner has been at this for 35 years and its long-term supply contracts give it clear insight into where, when and how it needs to deliver uranium to customers. The newest contracts allow Cameco to guide for production of 18 million pounds at each of its McArthur River/Key Lake and Cigar Lake projects this year. The miner also acquired last November a 49% interest in Westinghouse Electric, one of the world’s largest nuclear services businesses. Brookfield Asset Management (NYSE:BAM) took the other 51%. Cameco expects to receive adjusted EBITDA of $445 million and $510 million this year from the venture, which will grow at a compounded growth rate of 6% to 10% a year.
Although CCJ stock fell after its fourth-quarter earnings report, shares are still up 68% over the past year. But trading at 25 times expected earnings and less than twice the long-term earnings growth rate, Cameco is a uranium stock to add that special glow to your portfolio.
Canadian uranium miner NexGen Energy (NYSE:NXE) focuses on the Athabasca Basin of Saskatchewan. It wholly owns the Rook I project, the largest development-stage uranium project in Canada. The project is centered around the Arrow development, a world-class resource where NexGen just announced the discovery of new intense uranium mineralization. The miner will be dedicating drilling operations to the area as it reflects high potential for new resources.
While the project has substantial potential considering the resources contained in the region, investors also need to be mindful that NexGen does not generate any revenue at the moment. The company only receives money from the interest earned on its cash. At the end of December, its cash balance stood at $290.7 million more than double the amount it had the year before due to financings it took during the year. Current shareholders can expect to be diluted from these events but with the hope of realizing significant profits when the Rook I eventually comes online.
Despite this, NXE stock has doubled over the past year as investors foresee the potential of the Rook I project.
A better way to gain exposure to uranium miners is through an exchange-traded fund (ETF) such as Global X Uranium ETF (NYSE:URA). The reason is that many miners are like NexGen Energy: development-stage outfits without actual mining operations. For example, Uranium Energy (NYSE:UEC) has interests in several mines but actually derives revenue by buying uranium on the spot market and then reselling it at higher prices.
Global X Uranium ETF is the largest uranium ETF with $2.8 billion in assets under management (UAM). It owns shares in 47 different companies but most of its assets are in Cameco, which represents 21.2% of the total. The next largest holding is Sprotts Physical Uranium Trust (OTCMKTS:SRUUF), an ETF listed on the Toronto Stock Exchange that represents 9% of total assets. As its name suggests, Sprotts holds physical uranium, some 63.6 million pounds of uranium 3o8 that has a market value of more than $5.5 billion.
Other miners in Global X’s portfolio include NexGen, Uranium Energy, Dennison Mines (NYSE:DNN) and others. Most of the miners are Canadian but Australian miners make up a large component too, with just a handful coming from the U.S.
There is a certain level of concentration because there are relatively few uranium miners. An ETF gives investors the best shot at exposure to the sector but as much diversification as possible. Shares of the ETF are up 48% from last year.
On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets.
Written by Dr. Michael C. Threatt on . Posted in Canada. Leave a Comment
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Written by TSX Stocks on . Posted in Canada. Leave a Comment
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Written by Business Wire on . Posted in Canada. Leave a Comment
The content in this section is supplied by Business Wire for the purposes of distributing press releases on behalf of its clients. Postmedia has not reviewed the content.
Author of the article:
Business Wire
Published Mar 21, 2024 • 24 minute read
All dollar amounts expressed are in thousands of U.S. dollars unless otherwise indicated.
Q4, Full Year 2023 and Other Highlights
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Vanadium Market Update4
TORONTO — Largo Inc. (“Largo” or the “Company“) (TSX: LGO) (NASDAQ: LGO) today released financial and operating results for the three and twelve months ended December 31, 2023. The Company reported annual vanadium pentoxide (“V2O5”) equivalent sales of 10,396 tonnes at a cash operating cost excluding royalties per pound1 sold of $5.30.
Daniel Tellechea, Interim CEO and Director of Largo, stated: “The Company’s financial results continued to be adversely affected by lower vanadium prices as highlighted by a sharp decline in the European V2O5 price of 22% in Q4 2023 compared to Q4 2022. We remain committed to achieving greater levels of operational efficiency at the Maracás Menchen Mine in order to meet production and sales targets improve cash flow going forward.”
He continued: “A number of notable achievements were made by the Company during 2023, including the successful construction and commissioning of a new ilmenite concentration plant. We continue with the ramp-up of production at this facility, further diversifying our revenue stream from our existing vanadium operations. Largo’s exploration efforts surrounding the Maracás Menchen Mine have become an increasingly important part of our story over the last few quarters, and we continue to advance our efforts in this area. Following our recent announcement on our review and evaluation of strategic alternatives to unlock and fully maximize the value of LCE, we look forward to continuing discussions with Stryten over the coming weeks.”
He concluded: “While vanadium appears to have very promising long-term fundamentals, the Company remains solely focused on reducing costs and meeting its production and sales targets to withstand the current period of low vanadium prices.”
Financial and Operating Results – Highlights
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(thousands of U.S. dollars, except as otherwise stated) |
Three months ended |
Year ended |
||
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Revenues |
44,170 |
47,501 |
198,684 |
229,251 |
Operating costs |
(43,218) |
(44,455) |
(174,758) |
(169,719) |
Net income (loss) |
(13,301) |
(15,636) |
(32,358) |
(2,226) |
Basic earnings (loss) per share |
(0.21) |
(0.24) |
(0.51) |
(0.03) |
Adjusted EBITDA2 |
1,385 |
(3,680) |
12,127 |
41,583 |
Cash (used) provided before working capital items |
(2,364) |
(14,055) |
5,267 |
21,424 |
Cash operating costs excl. royalties5 ($/lb) |
5.44 |
5.15 |
5.30 |
4.57 |
Cash |
42,714 |
54,471 |
42,714 |
54,471 |
Debt |
75,000 |
40,000 |
75,000 |
40,000 |
Total mined – dry basis (tonnes) |
3,490,711 |
2,737,149 |
14,864,394 |
10,517,210 |
Total ore mined (tonnes) |
473,958 |
326,552 |
1,752,982 |
1,359,927 |
Effective grade6 of ore milled (%) |
1.03 |
1.06 |
1.04 |
1.26 |
V2O5 equivalent produced (tonnes) |
2,768 |
2,004 |
9,681 |
10,436 |
Q4 & Full Year 2023 Notes and Other Highlights
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The information provided within this release should be read in conjunction with Largo’s annual consolidated financial statements for the years ended December 31, 2023 and 2022 and its management’s discussion and analysis for the year ended December 31, 2023 which are available on our website at www.largoinc.com or on the Company’s respective profiles at www.sedarplus.com and www.sec.gov.
About Largo
Largo is a globally recognized vanadium company known for its high-quality VPURE™ and VPURE+™ products, sourced from its Maracás Menchen Mine in Brazil. The Company is currently focused on the ramp-up its ilmenite concentrate plant and is undertaking a strategic evaluation of its U.S.-based clean energy business, including its advanced VCHARGE vanadium battery technology to maximize the value of the organization. Largo’s strategic business plan centers on maintaining its position as a leading vanadium supplier with a growth strategy to support a low-carbon future.
Largo’s common shares trade on the Nasdaq Stock Market and on the Toronto Stock Exchange under the symbol “LGO”. For more information on the Company, please visit www.largoinc.com.
Cautionary Statement Regarding Forward-looking Information:
This press release contains “forward-looking information” and “forward-looking statements” (collectively, “forward looking statements”) within the meaning of applicable Canadian and United States securities legislation. Forward‐looking statements in this press release include, but are not limited to: the achievement of operational stability; Largo’s ability to improve cash flow in the future; expected sales; diversifying the Company’s product offering; optimizing operations, continued advancements at the Maracás Menchen Mine; the conclusion of the installation of Largo’s battery project; and future commitments to purchase V2O5..
The following are some of the assumptions upon which forward-looking statements are based: that general business and economic conditions will not change in a material adverse manner; demand for, and stable or improving price of V2O5 and other vanadium commodities; receipt of regulatory and governmental approvals, permits and renewals in a timely manner; that the Company will not experience any material accident, labour dispute or failure of plant or equipment or other material disruption in the Company’s operations at the Maracás Menchen Mine or relating to LCE; the availability of financing for operations and development; the ability to mitigate the impact of continuing heavy rainfall; the Company’s ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; that the estimates of the resources and reserves at the Maracás Menchen Mine are within reasonable bounds of accuracy (including with respect to size, grade and recovery and the operational and price assumptions on which such estimates are based); the Company’s “two-pillar” business strategy will be successful; the Company’s sales and trading arrangements will not be affected by the evolving sanctions against Russia; and the Company’s ability to attract and retain skilled personnel and directors; the ability of management to execute strategic goals.
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Forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. All information contained in this news release, other than statements of current and historical fact, is forward looking information. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Largo or LCE to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks described in the annual information form of Largo and in its public documents filed on www.sedarplus.com and available on www.sec.gov from time to time. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Although management of Largo has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Largo does not undertake to update any forward-looking statements, except in accordance with applicable securities laws. Readers should also review the risks and uncertainties sections of Largo’s most recent annual and interim MD&A, which also apply. Largo’s most recent annual and interim MD&A are available on Largo’s SEDAR+ profile at www.sedarplus.com.
Trademarks are owned by Largo Inc.
Non-GAAP8 Measures
The Company uses certain non-GAAP measures in this press release, which are described in the following section. Non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under IFRS, the Company’s GAAP, and might not be comparable to similar financial measures disclosed by other issuers. These measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Management believes that non-GAAP financial measures, when supplementing measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company.
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Revenues Per Pound Sold
This press release refers to revenues per pound sold, a non-GAAP performance measure that is used to provide investors with information about a key measure used by management to monitor the performance of the Company.
This measure, along with cash operating costs and total cash costs, is considered to be one of the key indicators of the Company’s ability to generate operating earnings and cash flow from its Maracás Menchen Mine and sales activities. This revenues per pound sold measure does not have any standardized meaning prescribed by IFRS and differs from measures determined in accordance with IFRS. This measure is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. This measure is not necessarily indicative of net earnings or cash flow from operating activities as determined under IFRS.
The following table provides a reconciliation of this measure per pound sold to revenues as per the Q4 2023 and annual unaudited condensed interim consolidated financial statements.
Three months ended |
Year ended |
|||||||||||
December 31, 2023 |
December 31, 2022 |
December 31, 2023 |
December 31, 2022 |
|||||||||
Revenues – V2O5 produced1 |
$ |
25,182 |
$ |
24,908 |
$ |
115,534 |
$ |
123,529 |
||||
V2O5 sold – produced (000s lb) |
3,215 |
3,483 |
13,113 |
14,307 |
||||||||
V2O5 revenues per pound of V2O5 sold – produced ($/lb) |
$ |
7.83 |
$ |
7.15 |
$ |
8.81 |
$ |
8.63 |
||||
Revenues – V2O5 purchased1 |
$ |
1,497 |
$ |
— |
$ |
9,028 |
$ |
3,184 |
||||
V2O5 sold – purchased (000s lb) |
265 |
— |
1,279 |
265 |
||||||||
V2O5 revenues per pound of V2O5 sold – purchased ($/lb) |
$ |
5.65 |
$ |
— |
$ |
7.06 |
$ |
12.02 |
||||
Revenues – V2O51 |
$ |
26,679 |
$ |
24,908 |
$ |
124,562 |
$ |
126,713 |
||||
V2O5 sold (000s lb) |
3,480 |
3,483 |
14,392 |
14,571 |
||||||||
V2O5 revenues per pound of V2O5 sold ($/lb) |
$ |
7.67 |
$ |
7.15 |
$ |
8.65 |
$ |
8.70 |
||||
Revenues – V2O3 produced1 |
$ |
6,213 |
$ |
4,736 |
$ |
13,788 |
$ |
8,534 |
||||
V2O3 sold – produced (000s lb) |
596 |
426 |
1,215 |
734 |
||||||||
V2O3 revenues per pound of V2O3 sold – produced ($/lb) |
$ |
10.42 |
$ |
11.12 |
$ |
11.35 |
$ |
11.63 |
||||
Revenues – V2O3 purchased1 |
$ |
— |
$ |
480 |
$ |
1,155 |
$ |
962 |
||||
V2O3 sold – purchased (000s lb) |
— |
42 |
88 |
85 |
||||||||
V2O3 revenues per pound of V2O3 sold – purchased ($/lb) |
$ |
— |
$ |
11.43 |
$ |
13.13 |
$ |
11.32 |
||||
Revenues – V2O31 |
$ |
6,213 |
$ |
5,216 |
$ |
14,943 |
$ |
9,496 |
||||
V2O3 sold (000s lb) |
596 |
468 |
1,303 |
819 |
||||||||
V2O3 revenues per pound of V2O3 sold ($/lb) |
$ |
10.42 |
$ |
11.15 |
$ |
11.47 |
$ |
11.59 |
||||
Revenues – FeV produced1 |
$ |
11,278 |
$ |
15,664 |
$ |
57,686 |
$ |
71,025 |
||||
FeV sold – produced (000s kg) |
479 |
559 |
2,070 |
2,135 |
||||||||
FeV revenues per kg of FeV sold – produced ($/kg) |
$ |
23.54 |
$ |
28.02 |
$ |
27.87 |
$ |
33.27 |
||||
Revenues – FeV purchased1 |
$ |
— |
$ |
1,713 |
$ |
1,386 |
$ |
22,017 |
||||
FeV sold – purchased (000s kg) |
— |
64 |
50 |
603 |
||||||||
FeV revenues per kg of FeV sold – purchased ($/kg) |
$ |
— |
$ |
26.77 |
$ |
27.72 |
$ |
36.51 |
||||
Revenues – FeV1 |
$ |
11,278 |
$ |
17,377 |
$ |
59,072 |
$ |
93,042 |
||||
FeV sold (000s kg) |
479 |
623 |
2,120 |
2,738 |
||||||||
FeV revenues per kg of FeV sold ($/kg) |
$ |
23.54 |
$ |
27.89 |
$ |
27.86 |
$ |
33.98 |
||||
Revenues1 |
$ |
44,170 |
$ |
47,501 |
$ |
198,577 |
$ |
229,251 |
||||
V2O5 equivalent sold (000s lb) |
5,743 |
6,116 |
22,920 |
24,451 |
||||||||
Revenues per pound sold ($/lb) |
$ |
7.69 |
$ |
7.77 |
$ |
8.66 |
$ |
9.38 |
||||
|
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Cash Operating Costs Excluding Royalties Per Pound
The Company’s press release refers to cash operating costs excluding royalties per pound, which are non-GAAP ratios based on cash operating costs and cash operating costs excluding royalties, which are non-GAAP financial measures, in order to provide investors with information about a key measure used by management to monitor performance. This information is used to assess how well the Maracás Menchen Mine is performing compared to plan and prior periods, and also to assess its overall effectiveness and efficiency.
Cash operating costs includes mine site operating costs such as mining costs, plant and maintenance costs, sustainability costs, mine and plant administration costs, royalties and sales, general and administrative costs (all for the Mine properties segment), but excludes depreciation and amortization, share-based payments, foreign exchange gains or losses, commissions, reclamation, capital expenditures and exploration and evaluation costs. Operating costs not attributable to the Mine properties segment are also excluded, including conversion costs, product acquisition costs, distribution costs and inventory write-downs.
Cash operating costs excluding royalties is calculated as cash operating costs less royalties. Cash operating costs per pound and cash operating costs excluding royalties per pound are obtained by dividing cash operating costs and cash operating costs excluding royalties, respectively, by the pounds of vanadium equivalent sold that were produced by the Maracás Menchen Mine. Cash operating costs, cash operating costs excluding royalties, cash operating costs per pound and cash operating costs excluding royalties per pound, along with revenues, are considered to be key indicators of the Company’s ability to generate operating earnings and cash flow from its Maracás Menchen Mine. These measures differ from measures determined in accordance with IFRS, and are not necessarily indicative of net earnings or cash flow from operating activities as determined under IFRS.
The following table provides a reconciliation of cash operating costs and cash operating costs excluding royalties, cash operating costs per pound and cash operating costs excluding royalties per pound for the Maracás Menchen Mine to operating costs as per the 2023 annual consolidated financial statements.
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Three months ended |
Year ended |
|||||||||||
December 31, 2023 |
December 31, 2022 |
December 31, 2023 |
December 31, 2022 |
|||||||||
Operating costsi |
$ |
43,218 |
$ |
44,455 |
$ |
174,758 |
$ |
169,719 |
||||
Professional, consulting and management feesii |
887 |
1,185 |
3,102 |
4,969 |
||||||||
Other general and administrative expensesiii |
718 |
530 |
1,750 |
1,390 |
||||||||
Add: insurance proceedsi |
— |
683 |
— |
683 |
||||||||
Less: iron ore costsi |
(84 |
) |
(22 |
) |
(722 |
) |
(659 |
) |
||||
Less: conversion costsi |
(1,768 |
) |
(2,231 |
) |
(7,319 |
) |
(8,070 |
) |
||||
Less: product acquisition costsi |
(1,974 |
) |
(3,775 |
) |
(15,354 |
) |
(24,426 |
) |
||||
Less: distribution costsi |
(2,366 |
) |
(2,282 |
) |
(8,540 |
) |
(9,169 |
) |
||||
Less: inventory write-downiv |
(192 |
) |
(332 |
) |
(1,853 |
) |
(1,987 |
) |
||||
Less: depreciation and amortization expensei |
(6,592 |
) |
(5,959 |
) |
(26,048 |
) |
(20,882 |
) |
||||
Cash operating costs |
31,847 |
32,252 |
119,774 |
111,568 |
||||||||
Less: royalties1 |
(2,243 |
) |
(2,106 |
) |
(9,162 |
) |
(10,371 |
) |
||||
Cash operating costs excluding royalties |
29,604 |
30,146 |
110,612 |
101,197 |
||||||||
Produced V2O5 sold (000s lb) |
5,437 |
5,855 |
20,871 |
22,121 |
||||||||
Cash operating costs per pound ($/lb) |
$ |
5.86 |
$ |
5.51 |
$ |
5.74 |
$ |
5.04 |
||||
Cash operating costs excluding royalties per pound ($/lb) |
$ |
5.44 |
$ |
5.15 |
$ |
5.30 |
$ |
4.57 |
||||
|
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EBITDA and Adjusted EBITDA
The Company’s press release refers to earnings before interest, tax, depreciation and amortization, or “EBITDA”, and adjusted EBITDA, which are non-GAAP financial measures, in order to provide investors with information about key measures used by management to monitor performance. EBITDA is used as an indicator of the Company’s ability to generate liquidity by producing operating cash flow to fund working capital needs, service debt obligations, and fund capital expenditures.
Adjusted EBITDA removes the effect of inventory write-downs, impairment charges (including write-downs of vanadium assets), insurance proceeds received, movements in legal provisions, non-recurring employee settlements and other expense adjustments that are considered to be non-recurring for the Company. The Company believes that by excluding these amounts, which are not indicative of the performance of the core business and do not necessarily reflect the underlying operating results for the periods presented, it will assist analysts, investors and other stakeholders of the Company in better understanding the Company’s ability to generate liquidity from its core business activities.
EBITDA and adjusted EBITDA are intended to provide additional information to analysts, investors and other stakeholders of the Company and do not have any standardized definition under IFRS. These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures exclude the impact of depreciation, costs of financing activities and taxes, and the effects of changes in operating working capital balances, and therefore are not necessarily indicative of operating profit or cash flow from operating activities as determined under IFRS. Other companies may calculate EBITDA and adjusted EBITDA differently.
The following table provides a reconciliation of EBITDA and adjusted EBITDA to net income (loss) as per the 2023 annual consolidated financial statements.
Three months ended |
Year ended |
|||||||||||
December 31, 2023 |
December 31, 2022 |
December 31, 2023 |
December 31, 2022 |
|||||||||
Net loss |
$ |
(13,301 |
) |
$ |
(15,636 |
) |
$ |
(32,358 |
) |
$ |
(2,226 |
) |
Finance costs |
4,096 |
801 |
9,630 |
1,588 |
||||||||
Interest income |
(280 |
) |
(311 |
) |
(2,018 |
) |
(1,109 |
) |
||||
Income tax expense |
40 |
(1,336 |
) |
88 |
7,688 |
|||||||
Deferred income tax recovery |
(3,119 |
) |
(252 |
) |
(2,786 |
) |
(1,423 |
) |
||||
Depreciationi |
7,393 |
6,725 |
29,250 |
23,278 |
||||||||
EBITDA |
$ |
(5,171 |
) |
$ |
(10,009 |
) |
$ |
1,806 |
$ |
27,796 |
||
Inventory write-downii |
2,407 |
6,797 |
4,068 |
8,739 |
||||||||
Write-down of vanadium assets |
3,535 |
— |
4,862 |
— |
||||||||
Insurance proceedsiii |
— |
(683 |
) |
— |
(683 |
) |
||||||
Movement in legal provisionsiii |
(85 |
) |
215 |
692 |
5,107 |
|||||||
Employee settlementsiii |
699 |
— |
699 |
624 |
||||||||
Adjusted EBITDA |
$ |
1,385 |
$ |
(3,680 |
) |
$ |
12,127 |
$ |
41,583 |
|||
|
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______________________________________________
1 Revenues per pound sold and cash operating costs are non-GAAP financial measures, and cash operating costs per pound and cash operating costs excluding royalties per pound are non-GAAP ratios with no standard meaning under IFRS, and may not be comparable to similar financial measures disclosed by other issuers. Refer to the “Non-GAAP Measures” section of this press release.
2 Adjusted EBITDA is a non-GAAP financial measure with no standard meaning under IFRS, and may not be comparable to similar financial measures disclosed by other issuers. Refer to the “Non-GAAP Measures” section of this press release.
3 Defined as current assets less current liabilities per the consolidated statements of financial position.
4 Fastmarkets MetalBulletin
5 The cash operating costs excluding royalties and revenues per pound per pound sold are reported on a non-GAAP basis. Refer to the “Non-GAAP Measures” section of this press release. Revenues per pound sold are calculated based on the quantity of V2O5 sold during the stated period.
6 Effective grade represents the percentage of magnetic material mined multiplied by the percentage of V2O5 in the magnetic concentrate
7 Global recovery is the product of crushing recovery, milling recovery, kiln recovery, leaching recovery and chemical plant recovery.
8 GAAP – Generally Accepted Accounting Principles
Appendix:
Consolidated Statements of Financial Position
Expressed in thousands / 000’s of U.S. dollars
As at |
|||||||
December 31, 2023 |
December 31, 2022 |
||||||
Assets |
|||||||
Cash |
$ |
42,714 |
$ |
54,471 |
|||
Restricted cash |
712 |
470 |
|||||
Amounts receivable |
25,598 |
20,975 |
|||||
Inventory |
61,565 |
64,221 |
|||||
Prepaid expenses |
6,534 |
14,007 |
|||||
Total Current Assets |
137,123 |
154,144 |
|||||
Other intangible assets |
6,153 |
7,263 |
|||||
Mine properties, plant and equipment |
212,176 |
175,237 |
|||||
Vanadium assets |
18,674 |
14,510 |
|||||
Deferred income tax asset |
7,495 |
4,596 |
|||||
Total Non-current Assets |
244,498 |
201,606 |
|||||
Total Assets |
$ |
381,621 |
$ |
355,750 |
|||
Liabilities |
|||||||
Current portion of lease liability |
$ |
600 |
$ |
581 |
|||
Accounts payable and accrued liabilities |
31,439 |
26,634 |
|||||
Deferred revenue |
3,553 |
1,698 |
|||||
Debt |
— |
4,000 |
|||||
Current portion of provisions |
6,863 |
6,060 |
|||||
Total Current Liabilities |
42,455 |
38,973 |
|||||
Lease liability |
925 |
1,473 |
|||||
Non-current accounts payable and accrued liabilities |
724 |
326 |
|||||
Long term debt |
75,000 |
36,000 |
|||||
Provisions |
6,718 |
4,424 |
|||||
Total Non-current Liabilities |
83,367 |
42,223 |
|||||
Total Liabilities |
125,822 |
81,196 |
|||||
Equity |
|||||||
Issued capital |
412,295 |
411,646 |
|||||
Equity reserves |
12,200 |
14,138 |
|||||
Accumulated other comprehensive loss |
(98,200 |
) |
(112,165 |
) |
|||
Deficit |
(77,643 |
) |
(48,227 |
) |
|||
Equity attributable to owners of the Company |
248,652 |
265,392 |
|||||
Non-controlling Interest |
7,147 |
9,162 |
|||||
Total Equity |
255,799 |
274,554 |
|||||
Total Liabilities and Equity |
$ |
381,621 |
$ |
355,750 |
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Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
Expressed in thousands / 000’s of U.S. dollars and shares (except per share information)
Years ended December 31, |
|||||||
2023 |
2022 |
||||||
Revenues |
$ |
198,684 |
$ |
229,251 |
|||
Expenses |
|||||||
Operating costs |
(174,758 |
) |
(169,719 |
) |
|||
Professional, consulting and management fees |
(23,068 |
) |
(25,277 |
) |
|||
Foreign exchange (loss) gain |
(183 |
) |
1,584 |
||||
Other general and administrative expenses |
(11,792 |
) |
(14,319 |
) |
|||
Share-based payments |
362 |
(2,372 |
) |
||||
Finance costs |
(9,630 |
) |
(1,588 |
) |
|||
Interest income |
2,018 |
1,109 |
|||||
Technology start-up costs |
(6,122 |
) |
(12,695 |
) |
|||
Write-down of vanadium assets |
(4,862 |
) |
— |
||||
Exploration and evaluation costs |
(5,705 |
) |
(1,935 |
) |
|||
(233,740 |
) |
(225,212 |
) |
||||
Net income (loss) before tax |
$ |
(35,056 |
) |
$ |
4,039 |
||
Income tax expense |
(88 |
) |
(7,688 |
) |
|||
Deferred income tax recovery |
2,786 |
1,423 |
|||||
Net loss |
$ |
(32,358 |
) |
$ |
(2,226 |
) |
|
Other comprehensive income |
|||||||
Items that subsequently will be reclassified to operations: |
|||||||
Unrealized gain on foreign currency translation |
13,965 |
6,607 |
|||||
Comprehensive income (loss) |
$ |
(18,393 |
) |
$ |
4,381 |
||
Net loss attributable to: |
|||||||
Owners of the Company |
$ |
(30,343 |
) |
$ |
(1,451 |
) |
|
Non-controlling interests |
$ |
(2,015 |
) |
$ |
(775 |
) |
|
$ |
(32,358 |
) |
$ |
(2,226 |
) |
||
Comprehensive income (loss) attributable to: |
|||||||
Owners of the Company |
$ |
(16,378 |
) |
$ |
5,156 |
||
Non-controlling interests |
$ |
(2,015 |
) |
$ |
(775 |
) |
|
$ |
(18,393 |
) |
$ |
4,381 |
|||
Basic loss per Common Share |
$ |
(0.51 |
) |
$ |
(0.03 |
) |
|
Diluted loss per Common Share |
$ |
(0.51 |
) |
$ |
(0.03 |
) |
|
Weighted Average Number of Shares Outstanding (in 000’s) |
|||||||
– Basic |
64,038 |
64,446 |
|||||
– Diluted |
64,038 |
64,446 |
Consolidated Statements of Cash Flows
Expressed in thousands / 000’s of U.S. dollars
Years ended December 31, |
|||||||
2023 |
2022 |
||||||
Operating Activities |
|||||||
Net loss for the year |
$ |
(32,358 |
) |
$ |
(2,226 |
) |
|
Depreciation |
29,250 |
23,278 |
|||||
Share-based payments |
(362 |
) |
2,372 |
||||
Unrealized foreign exchange (gain) |
(509 |
) |
(4,580 |
) |
|||
Non-cash listing expense |
— |
571 |
|||||
Loss on sale of vanadium assets |
156 |
— |
|||||
Finance costs |
9,630 |
1,588 |
|||||
Interest income |
(2,018 |
) |
(1,109 |
) |
|||
Write down of vanadium assets |
4,862 |
— |
|||||
Income tax expense |
88 |
7,688 |
|||||
Deferred income tax recovery |
(2,786 |
) |
(1,423 |
) |
|||
Income tax paid |
(686 |
) |
(4,735 |
) |
|||
Cash Provided Before Working Capital Items |
5,267 |
21,424 |
|||||
Change in amounts receivable |
(3,861 |
) |
3,573 |
||||
Change in inventory |
5,361 |
(15,710 |
) |
||||
Change in prepaid expenses |
7,961 |
(7,232 |
) |
||||
Changes in accounts payable and provisions |
4,614 |
5,176 |
|||||
Change in deferred revenue |
1,855 |
(3,771 |
) |
||||
Net Cash Provided by Operating Activities |
21,197 |
3,460 |
|||||
Financing Activities |
|||||||
Receipt of debt |
70,000 |
55,000 |
|||||
Repayment of debt |
(35,000 |
) |
(30,000 |
) |
|||
Interest paid |
(7,065 |
) |
(616 |
) |
|||
Interest received |
2,014 |
1,109 |
|||||
Lease payments |
(580 |
) |
(569 |
) |
|||
Change in restricted cash |
(242 |
) |
(22 |
) |
|||
Sale of non-controlling interest |
— |
7,344 |
|||||
Share repurchase |
— |
(6,088 |
) |
||||
Issuance of common shares |
— |
277 |
|||||
Net Cash Provided by Financing Activities |
29,127 |
26,435 |
|||||
Investing Activities |
|||||||
Intangible assets |
(157 |
) |
(3,444 |
) |
|||
Mine properties, plant and equipment |
(53,546 |
) |
(42,193 |
) |
|||
Purchase of vanadium assets |
(10,115 |
) |
(14,510 |
) |
|||
Sale of vanadium assets |
933 |
— |
|||||
Net Cash Used in Investing Activities |
(62,885 |
) |
(60,147 |
) |
|||
Effect of foreign exchange on cash |
804 |
933 |
|||||
Net Change in Cash |
(11,757 |
) |
(29,319 |
) |
|||
Cash position – beginning of the year |
54,471 |
83,790 |
|||||
Cash Position – end of the year |
$ |
42,714 |
$ |
54,471 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240321493592/en/
Contacts
For further information, please contact:
Investor Relations
Alex Guthrie
Senior Manager, External Relations
+1.416.861.9778
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This Week in Flyers
Written by Joe OConnor on . Posted in Canada. Leave a Comment
Adam Waterous and his wife are behind a plan to build a passenger rail line connecting Calgary to Banff and service it with an environmentally friendly, hydrogen-powered train
Published Mar 21, 2024 • Last updated 1 hour ago • 11 minute read
It’s 7 a.m. and the fresh cup of coffee in Adam Waterous’ hands isn’t providing him fuel to pump Strathcona Resources Ltd., which he built from scratch to become Canada’s fifth-largest oil producer prior to taking it public five months ago.
Instead, the former investment banker is sitting with his wife Jan and eager to talk about a project that seems diametrically opposed to the interests of the Calgary-based oil company he’s executive chair of, and the oilpatch in general. But before wading into that story, Waterous had a revealing coming-of-age tale to share.
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He and a high school buddy took the subway to what were then Toronto’s northern extremes, stuck out their thumbs and promptly caught a lift from a kind, elderly couple in a Cadillac who dropped the boys about an hour north of the city. The plan was to hitchhike to Banff, Alta. It was 1979.
“I thought, “This is going to be easy,” he said.
That burst of early optimism died by the side of the highway in Sudbury, Ont., where the friends were marooned for three days waiting for a ride. Eventually, they reached the iconic Canadian mountain town with the breathtaking scenery and abundance of outdoorsy stuff to do. Waterous was hooked.
So much so that after spending the summer in Banff, he spent the next two decades trying to figure out how to get back and make it his home. Jan, a Torontonian, likewise enjoyed a youthful brush with the town, and was keen to do the same. Today, the couple are the proud owners of the Mt. Norquay ski resort and, despite their Calgary digs, consider Banff as their permanent address.
But skiing is not what Waterous is known for in business. The 62-year-old made a mint doing deals in the oilpatch as an investment banker with Bank of Nova Scotia before striking out on his own in 2017 to found Waterous Energy Fund, a private-equity player that snapped up a bunch of small oil producers, creating the not-so-small Strathcona Resources.
Potentially far more transformative and, on its surface, perplexing — given the origins of Waterous’ substantial wealth — than shaking things up in the energy sector is the hydrocarbon-tycoon’s plan to shake up things in Alberta and North American mass transit circles by building a 150-kilometre rail line connecting Banff to Calgary and to service it with an environmentally friendly, hydrogen-powered train.
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This is it not a save-the-planet solo-effort, mind you, but a Waterous family affair, equally propelled along by Jan, a public relations whiz, who parked a big corporate job in Toronto to move west, and to a lesser degree the couple’s three, Harvard-educated sons who, incidentally, all have day jobs at Waterous Energy Fund.
“Without Adam and Jan, the train would still be the most talked about thing in Banff that is never going to happen,” Mike Mendelman, a Banff restaurateur, said. “There have been so many hurdles related to this project, and anybody but them would have tired of it long ago and thrown in the towel, but they just keep going.”
In the days of yore, part of the wonder of Banff was the journey to get there. Starting in 1888, it was a trip often undertaken by train that delivered generations of tourists to what was then Canadian Pacific Railway’s Banff Springs Hotel, and parts thereabouts. That passenger train kept chugging in gradually diminishing grandeur as the town grew until 1990 when Via Rail Canada Inc., a Crown corporation that was bleeding money, cut its service to the mountains, cutting travellers off from Banff unless they wanted to drive or take the bus.
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Lo and behold, drive they did: around 6.5 million vehicles pull into Banff each year, according to town statistics. That’s a lot of cars for a place with not a lot of roads to accommodate them. During the summer tourist high season and at points during the winter, the resort town at the heart of Banff National Park experiences traffic jams, not on a nightmare Toronto-scale, but at a level that is neither a win for the locals’ disposition nor the environment.
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On top of their aggravation is an acute housing and affordability crisis, such that a tourist destination that desperately needs workers to serve its more than four million annual visitors has nowhere for those workers to live, unless they happen to luck into a studio apartment — for $1,700 a month.
A train, in theory, would dramatically decrease the volume of cars and increase the labour supply by attracting workers from stops along the line with more affordable housing options, or so the argument goes. It is a perfectly common-sense solution that has long seemed obvious to Banffites, Mendelman included, and yet equally obvious was that no level of government was poking around town to ask whether Banff wanted its train back, or whose responsibility it was to build, operate and fund the line.
Enter Adam and Jan Waterous, two incurable doers with three inquisitive sons, and a zest for freewheeling family dialogues. The town’s infernal traffic problem came up over breakfast eight years ago, and not for the first time.
“You keep asking the question, ‘Well, what are they going to do about it?’ and it occurred to us, sitting around with the boys, who is this they?” Jan said.
In that moment, the family decided the “they” would be them. Nearly a decade on, it still is.
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In the interim, the Waterouses, through the family holding company Liricon Capital Inc., have invested millions of their own fortune into the proposal to build a train. The wider aspects of the project would involve restoring Banff’s historic train station, expanding upon an intercept parking lot with 600 free parking spaces intended to get drivers out of their cars and onto shuttle buses the Waterouses already operate, and adding a gondola service to whisk people from the train station to Mt. Norquay’s slopes.
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Plenary Americas, a portfolio company of Quebec’s pension fund, the Caisse de dépôt et placement du Québec, sure seems bullish on the idea, and has signed on as the co-developer of the train. The other partner, should the project get the green light, would be the Canada Infrastructure Bank, which would put up half the estimated $2-billion construction cost. Alberta Premier Danielle Smith likewise seems keen, to the extent the province committed millions to explore connecting passenger rail service to Alberta’s Rocky Mountain parks system in its Feb. 29 budget.
It is fair to say none of the above would have happened if a couple of opposites, who have been together for almost 40 years, had not said enough was enough. Adam and Jan’s divergent natures were not evident when they were classmates (in political theory) at Western University in London, Ont., but they became clear upon bumping into one another in an elevator in Toronto during the summer of 1984.
Adam was wearing an “Elect Brian Mulroney” button; Jan an elect “John Turner” button. Both were volunteers for the opposing campaigns to be prime minister. A wager was struck on the outcome, and a lunch subsequently purchased by the loser for the winner at Bemelmans, a popular Toronto haunt.
“And the rest is history,” Jan said.
Adam bounces back from bad news like no one else. Just moments after suffering a business setback, he’s already imagining and planning the next even bigger success
David Potter
Part of that history, as it relates to an ambitious, unsolicited proposal to get a $2-billion infrastructure project built in Alberta, revolves around Adam’s dogged persistence. Back in the day, when he was a wheeling-and-dealing banker, he had a reputation among colleagues for quirky boardroom presentations, at times relying more on using old movie clips rather than spreadsheets.
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“Adam is clearly super smart,” David Potter, who worked closely with Waterous at Scotiabank, said. “But what really sets him apart from all the other sharp minds I’ve met or worked with over my career are his resilience and persistence. Adam bounces back from bad news like no one else. Just moments after suffering a business setback, he’s already imagining and planning the next even bigger success.”
Jan said her husband’s unbridled optimism in the wake of apparent disaster has been crucial in their dealings with bureaucracy: a morass of red tape, involving three levels of government, and a cast of changing characters.
Since the train project got rolling in 2016, the Waterouses have had brushes with three different premiers (Rachel Notley, Jason Kenney and Smith), seven transportation ministers, seven mayors and four communities, plus some mucky mucks from Parks Canada who, according to the couple, love nothing better than to say no.
“I hear ‘no’ as no, but Adam hears ‘no’ as maybe,” Jan said. “He loves to quote that line from the movie, The Big Lebowski, ‘Yay, well, that’s just like your opinion, man.’”
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In other words, Waterous doesn’t get too fussed about opinions or the personalities delivering them, but stays focused on the merits of the project. Those merits don’t require consultants in fancy suits to sell them to the powers-that-be. Adam and Jan show up to meetings themselves, including in 2017, when they first met Jeff Genung, the mayor of Cochrane, Alta., for coffee.
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Genung immediately warmed to the idea and the people pitching it. A train would provide commuters an alternative option from driving, ease the burden on an overburdened highway network, increase labour mobility and attract more tourists to Cochrane — about 30 minutes northwest of Calgary and the hypothetical train’s first stop — even if the sum of their visit meant getting off the train to stretch their legs and grab a bite to eat.
The mayor understands the train would be operated as a business, with profits derived from ticket sales and a three-tiered pricing model, with the most luxurious seats reserved for domestic and international travellers of means bound for some good times in Banff. But he has never sensed the Waterouses were in it for the money.
“I genuinely think their interest in the train is doing something that is legacy, something that could really improve the lives of Albertans,” he said.
Jan said the project isn’t indeed an act of philanthropy, though she said there are much “easier ways” to make money, and most involve fewer headaches and substantially less red tape.
“Philanthropy, as admirable as it is, is not sustainable,” she said. “Our model is based on the premise that the only way to ensure that a solution is environmentally sustainable is to also make it economically sustainable.”
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As for the environment, if and when the hydrogen-powered train gets built as proposed, the line would track within the existing Canadian Pacific Kansas City Ltd. freight rail corridor, thereby nixing the need to cut great swaths of forest and blast through mountains. That’s a good news story for the planet.
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But pitching a clean-tech transit line that takes cars off the road on the one hand while fuelling those cars and the carbon economy on the other might annoy a few people in the green camp. Strathcona Resources produces about 200,000 barrels of oil a day, and the company plans to boost production to 325,000 barrels over the next eight years.
And yet Waterous doesn’t see any contradiction between what he does for a living and what he is trying to do for Banff. Portraying oil as a public enemy gets him pretty animated, and he argues that millions of people in the developing world die each year of “energy poverty” because they lack access to cheap fuel sources to heat, cool and cook in their homes.
The clearest path to eliminate those deaths, he said, is to ramp up energy production in the west while ramping down our own energy-intensive hypocrisy by parking our cars, building and using mass transit, and having energy producers such as Strathcona invest in technologies that can help decarbonize the hydrocarbon system.
“We actually think there is a moral obligation for Canada to try and double its production over the next 15 years,” he said.
Morals aside, a Calgary-Banff train polls favourably with the public, with 85 per cent of Calgarians expressing support for the idea. But there is still plenty of convincing to do.
Count Sarah Elmeligi among the skeptics. The NDP MLA for the region that includes Banff had a long pre-political career in conservation. She is reportedly not anti-train, but wants to see more data on what the impact on the environment and wildlife corridors might be and whether, say, an expanded bus service might negate the need for a multi-billion infrastructure project before championing the cause.
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Waiting on feasibility and wildlife impact studies requires patience, but, according to Jan, the couple dutifully take their “vitamins,” and, according to Adam, they feel like a couple of “kids” despite being in their early 60s. They are not going anywhere.
But just in case, mom and dad have some backup. Liam, their youngest son, was 16 when the train project started. He recalls its humble beginnings at a makeshift booth on Banff Avenue collecting signatures with his parents from locals in support of the train. His parents carried the resulting data with them to their initial meeting with the Canada Infrastructure Bank.
Now 24, Liam is an associate with wide-ranging duties at Waterous Energy Fund. Among his tasks on a recent morning was doing some financial modelling for the train. Jan said her boys bring boundless energy, spreadsheet chops and the insights of the not-always-car-owning millennial to the table. Liam believes his buddies would be willing to pay between $20 and $30 for a ticket to Banff.
Liam describes his parents as a “funny pair.” Jan is the calm one, the listener, sounding board and a sage giver of good advice to Adam, the “China breaker” who is constantly pushing new ideas, and occasionally requiring his spouse to rein him in.
“Obviously, the relationship works,” Liam said.
Mendelman, the Banff restaurateur, delights in a story about Adam from around the time Strathcona Resources went public. The hard-charging tycoon and his sons flew to Toronto to ring the opening bell at the Toronto Stock Exchange. And yet when Mendelman ran into Adam sometime after, he glossed over going public and got right down to business: “How was the skiing?” he wondered.
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“Adam doesn’t seem to dwell on past accomplishments,” Mendelman said. “He seems much more interested in the future of Banff.”
It was now 9 a.m. in Calgary, and the sun was streaking through the windows of the Waterouses’ city house. Adam’s coffee was empty, but his day had just begun. It was time to get to work as chief executive of an oil-focused energy fund, but he was still eager to talk of hydrogen trains.
“What Jan and I are doing with the train, gondola and intercept parking — none of these are our ideas — they have all been around forever,” he said. “We always thought they were really good ideas, and like a lot of things in life, this is all about leaning in and saying, ‘Fine, we’ll do it.’ Somebody has got to lead the parade.”
• Email: joconnor@postmedia.com
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Written by Reuters Inc. on . Posted in Canada. Leave a Comment
STORY CONTINUES BELOW THESE SALTWIRE VIDEOS
Prices at the Pumps – March 20, 2024 #saltwire #energymarkets #pricesatthepumps #gasprices
Watch on YouTube: “Prices at the Pumps – March 20, 2024 #saltwire #energymarkets #pricesatthepumps #gasprices”
(Reuters) – Futures for Canada’s main stock index rose on Thursday boosted by a surge in prices of precious and base metals after the U.S. Federal Reserve stuck to its guidance on rate cuts this year.
March futures on the S&P/TSX index were up 0.4% at 6:57 a.m. ET (10:57 GMT).
The U.S. Fed still anticipates cutting interest rates three times this year, according to the median of new economic projections published on Wednesday.
Gold prices climbed to a record high on Thursday with the U.S. dollar and bond yields ticking lower, and prices of most base metals rose on enhanced risk appetite after the Fed rate cut view. [MET/L] [GOL/]
Energy shares could see an impact as Brent futures edged lower. [O/R]
Bank of Canada (BoC) deputy governor Toni Gravelle will be speaking later in the day on the normalization of the central bank’s balance sheet at the CFA Society of Toronto.
The Toronto Stock Exchange’s S&P/TSX composite index ended around 1% higher on Wednesday, stopping just short of the record closing high it posted in March 2022 at 22,087.22.
U.S. stock index futures rose as chipmakers tracked sharp gains in Micron Technology and investors took comfort as the Fed stuck to its script for 2024. [.N]
Back home, investors will monitor the new housing price index data at 8:30 a.m. ET for more clues on the health of the Canadian economy.
In company news, Jefferies raised the price target on Boyd Group Services to C$340 from C$290 earlier, while CIBC increased the price target on Power Corporation of Canada to C$43 from C$40.
COMMODITIES AT 6:55 a.m. ET
Gold futures: $2,209.9; +2.3% [GOL/]
US crude: $81.09; -0.2% [O/R]
Brent crude: $85.78; -0.2% [O/R]
($1= C$1.3492)
(Reporting by Shubham Batra; Editing by Vijay Kishore)
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