TSX drifts higher over holiday-shortened Apr. 3-6 trading week

Over the Good Friday-shortened Apr. 3-6 trading week, the S&P/TSX Composite Index inched up 96.8 points or 0.5% to 20,196.69. The S&P/TSX Global Mining Index added 0.41 points or 0.4% to 114.95, and the S&P/TSX Global Base Metals Index lost 2.51 points or 1.3% to 191.10. The S&P/TSX Global Gold Index rose 18.83 points or 6.1% to 326.40, and spot gold ended the week US$22.20 per oz. or 1.1% higher, at US$2,001.90 per ounce. 

Teck Resources saw the greatest value gain over the week, after rejecting an unsolicited, all-share US$23.2-billion bid for the company on Apr. 2 by multinational Swiss miner and commodities trader Glencore. Teck’s Class A shares rose $11.04 each or 13.8% to $91.04 in response, with its Class B shares rising by $9.92 each or 20.1% to $59.27. 

A shareholder vote for Teck’s proposed spinout of its metallurgical coal assets (detailed in February) is to be held on Apr. 26. If enough shareholders vote against the coal spinout, it could be seen as support for the board to engage with Glencore on an improved offer. 

Teck’s Class A shares carry enhanced voting rights equal to 100 Class B shares, and are controlled by the Keevil family, which is against the transaction and reportedly has the support of major shareholder Sumitomo. 

Agnico Eagle Mines added $7.37 per share or 10.7% to close at $76.27. On Mar. 31, the gold miner closed its acquisition of Yamana Gold’s assets and became the sole owner of the Canadian Malartic gold mine in Quebec (it previously held 50%). As part of the transaction, first announced last November, Agnico and Pan American Silver bought Yamana for US$4.8 billion in cash and shares — besting a previous offer from South Africa’s Gold Fields.  

On the losing side, Lithium Americas shed $3.86 or 13.1% to close at $25.54. The company announced the start of construction at its Thacker Pass lithium project in Nevada in early March, following a federal court ruling in February that dismissed a challenge of the project by environmentalists, Indigenous groups and ranchers. While the ruling upheld approvals granted by the Bureau of Land Management, it also said the BLM would still need to determine if waste rock and tailings can be stored at the site. 

Lithium Americas is nearing completion of its 44.8% owned Cauchari-Olaroz brine project in Argentina. First production at the JV, with Ganfeng Lithium (46.7%) and JEMSE (8.5%), is expected before the end of the first half of 2023, with full production (40,000 tonnes per year of lithium carbonate) on track for the first quarter of next year. 

Lithium prices, however, are coming off record highs seen last year and are expected to see a weak period in 2023 as new supply comes online and EV demand in China loses steam.