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Resource World - December-January 2018 - Vol 16 Issue 1

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38 D E C E M B E R / J A N U A R Y 2 0 1 8 At the Market by Rodney Blake A brief look back into tomorrow A s 2017 draws to a close and 2018 is only a step ahead I thought I would reflect back on the year in resources and to try and put that into per- spective for the year ahead. Once again, I'll be referring to the TSX Venture Exchange as this junior exchange is still the best barometer of the relative value of resources and resource companies. 2017 began mostly as expected with the Venture Exchange rising quickly from a level of about 760 at the start of the year to a high of about 835 in late February. This move was more or less expected as it mirrored the tradition seasonal move up in the price of gold bullion as it went from US $1,150 to about US $1,260 in the same time frame. Now this is where it got interesting. After consolidating in the US $1,250 range for 2½-months, gold turned higher to test the highs of the previous year at about US $1,325. But instead of following gold higher – as was its custom – the TSXV actually rolled over and fell back to the 750 level – a complete reversal to the upward price of gold bullion. What happened for the Venture Exchange to discount such an up-ward move in gold bullion? What happened was base metals, lith- ium, marijuana and crypto-currencies. The junior markets tend to like new things where the upside is not readily known. With copper, nickel and zinc reaching new multi-year highs, lithium suddenly at record highs, the marijuana industry booming and new electronic currencies thrust upon the market – investors left what was thought to be the range-bound value of gold and migrated to the blue-sky potential of new entities. With gold failing to break through to new highs and with most gold stories well known to the mar- ket – investors felt they could always come back to this sector. Silver stocks, which are tied to gold, also suffered accordingly. The same could be said for uranium. Uranium began the year at about US $23/ lb and what looked to be a promising year turned negative as its price drifted lower to about US $20 for much of the year as the overhanging inventory surpluses weighed on the market. Investors left this sector as well. Likewise, petroleum – as crude oil languished at about US $50 and natural gas, range-bound around US $3, failed to capture investor attention. Going into 2018 looks promising. The current focus on base metals, lithium, mari- juana and crypto-currencies will probably continue. Gold bullion should have its usual New Year's rally and if it can break above US $1,325 that sector could come alive with renewed interest. A sustained move in sil- ver above US $20 would help as well. Uranium stocks could rally if that sector can finally shed its oversupply and the price of yellowcake rises above US $30. And if oil and natural gas can continue their recent advances and rise above US $60 and US $4, respectively, we could get a broad-based resource market advance the likes of which we haven't seen in many years. n Rodney Blake is an Investment Advisors with Canaccord Genuity Wealth Management, a division of Canaccord Genuity Corp, Member- Canadian Investor Protection Fund. The information contained in this article is drawn from sources believed to be reliable, but the accuracy and completeness of the informa- tion is not guaranteed, nor in providing it does Rodney Blake, Canaccord Genuity Corp, or its subsidiaries, or affiliated companies, assume any liability. This information is cur- rent as of the date appearing in this article, we do not assume any obligation to update the information or advise on further develop- ments relating to these securities. This article should not be considered personal investment advice or a solicitation to buy or sell securities. Canaccord Genuity and holdings of its respec- tive directors, officers and employees and their associations, from time to time may buy or sell any securities mentioned herein. The views expressed are those of the author and not nec- essarily those of Canaccord Genuity Corp. He can be reached at 604-643-7567 or rod.blake@

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