TSX-V Closes Above Key Breakout Level - Summer To Remember OR Sell In May & Go Away?
Amid little fanfare, the TSX-V quietly closed above the 650 breakout level Friday afternoon - in this week's missive I review some of the junior mining charts & NRs that caught my attention last week.
Oddly enough, I didn’t see a single mention of the TSX-Venture Composite’s close above 650 on Friday afternoon. Admittedly, I was preoccupied with other things on Friday but normally at least one mention of such a momentous occasion would cross my assorted timelines.
TSX-Venture Composite (Daily)
The TSX-V has recovered impressively in the last few weeks; rising nearly 20% from its 546 low reached on April 7th. The 653.82 weekly close is the highest close for the Canadian small/micro cap index in nearly three years.
TSX-Venture Composite (Weekly)
I have been highlighting the well constructed head & shoulders bottom pattern since the beginning of the year. As is often the case, the breakout above 650 has taken some time to develop, with multiple tests up near 650 finding resistance throughout Q1 2025. I believe the early April market panic has set in motion a powerful relief rally - as we know, from failed moves we often see fast moves in the opposite direction.
The first upside target for the breakout is up at ~705, filling in the open gap from June 2022. Beyond that, there are multiple open gaps from spring 2022 waiting to get filled in, including all the way up at 892.50.
There is a great deal of noise out there and there is no doubt that the macroeconomic and global geopolitical backdrop is unsettling. However, I can just as easily make a bullish case for commodities and natural resource stocks as I can make a bearish case.
It makes the most sense to tune out the noise and stick with the simple thesis that we are still in the early stages of a commodities supercycle that began with a major bear market bottom in 2020. The race to control raw materials supply chains globally will only serve to supercharge this supercycle. Junior resource companies stand to be major beneficiaries of what is to come.
Will it be sell in May and go away again this year?
More often than not, the sell in May and go away adage holds true. However, there are exceptions, and some of those exceptions were truly exceptional (like 2016 and 2020).
TSX-Venture Composite (January - June 2020)
2025 doesn’t feel like an ordinary year. If anything, it feels like an exceptional year.
I’ll stick with fundamentals and long term chart pattern breakouts over seasonal tendencies that might work 60% of the time.
Let’s review some of the junior mining stock charts and news releases that caught my attention during the last week. None of the stocks reviewed here should be construed as recommendations. I’m offering my candid and concise assessments, good, bad, and in between:
ONYX.V (Daily)
Onyx Gold (TSX-V:ONYX, OTC:ONXGF) has quickly evolved into one of those “Bull Market Adjustment Trades” - the company delivered a special drill intercept (69.6 meters grading 3.4 g/t gold) earlier this month and more and more investors are beginning to tune into the potential at the Argo North Target in Timmins. A tight share structure and a sharp, young CEO offers a lot to like about ONYX.
ONYX recently announced the acceleration of $.30 warrants (3.72 million still outstanding) that are still outstanding from a July 2023 financing.
CEO Brock Colterjohn applauded the cash inflow into the company’s treasury and noted that a drill rig will be arriving on the property in early May:
"We're pleased to see strong support from our shareholders through the early exercise of warrants, and we anticipate the bulk of the remaining warrants will be exercised in the coming weeks, resulting in gross proceeds of up to $2.14 million. These funds will directly support our upcoming exploration efforts, with a drill scheduled to start turning in the first week of May at our Argus North target in Timmins, where the Company recently reported a broad and continuous new zone of strong gold mineralization, grading 3.4 g/t Au over 69.6 m, including a high-grade subzone of 13.9 g/t Au over 9.5 m. We look forward to sharing more details on the upcoming program shortly, as we advance what we believe is a compelling new gold discovery in one of Canada's premier mining jurisdictions."
Meanwhile, Peruvian copper-gold explorer Hannan Metals (TSX-V:HAN, OTC:HANNF) continues to see its share price reach new heights:
HAN.V (Daily)
Hannan is a unique example of a junior mining company being able to achieve a C$200 million market cap (fully diluted) without having drilled a single hole at its flagship asset.
Besides the share price performance, the good news is that drilling is expected to commence at the Belen Prospect in early May. The Belen prospect is situated within Hannan's Valiente project, which has identified a new Miocene-age porphyry copper-gold belt in Peru's central eastern region.
Hannan has an enormous property package at Valiente, of which Belen only represents a small percentage. The abundance of high-priority drill targets at Valiente presents a “kid in a candy store” situation for Hannan geologists.
The challenge for HAN shareholders will be assessing whether the drill results will be able to live up to the current high expectations. One Hannan shareholder recently offered his assessment on CEO.ca:
“HAN is going to be extremely undervalued when it hits a market cap of one billion dollars, and keeps rising higher from there. I am not joking. People need to do a little more research on Previsto. This is definitely not a normal situation.”
I will be following updates from Hannan over the coming months.
Sitka Gold (TSX-V:SIG) announced drill results from Hole 75 at its Blackjack Deposit at the RC Gold Project in the Yukon Territory. Hole 75 delivered the best high-grade intercept drilled to date at Blackjack with 352.8 meters averaging 1.55 g/t gold including 108.9 meters of 3.27 g/t gold.
Hole 75 is the first diamond drill hole to be completed in 2025 drilling at the RC Gold Project. Sitka is planning 30,000 meters of diamond drilling at RC Gold in 2025.
The results from Hole 75 extend the high-grade gold zone discovered late last year in Hole 68. The hole 75 results also demonstrate the persistence and continuity of this higher-grade gold zone with grades that appear to be increasing with depth.
A southeast plunging gold mineralized corridor is taking shape at Blackjack, with gold grades and instances of visible gold increasing at depth. The deepest hole drilled to date at Blackjack, hole 76 (over 60 instances of visible gold observed), is complete with assays pending.
Sitka shares are up ~50% YTD as deeper drilling at Blackjack appears to be vectoring towards the potential source of the gold system.
SIG.V (Daily)
Sitka is well funded after recently closing a C$11.8 million financing.
Finally, American Eagle Gold (TSX-V:AE, OTC:AMEGF) announced the commencement of the 2025 exploration season at its NAK copper-gold porphyry project in the Babine Region of British Columbia. The 2025 program will begin with a helicopter-borne magnetic survey over the entirety of the 100%-owned NAK Property.
A fully-funded 30,000 meter diamond drilling program will begin next month at NAK. The more advanced magnetic survey provides superior resolution for identifying various geological features and will help American Eagle geologists better understand subsurface structures at NAK. The results of the survey will help the NAK team to optimize drillhole orientations, to test where these dykes and magnetite-rich potassic alteration zones may originate at depth.
This year’s drill program is larger than AE’s first three years at NAK combined. American Eagle is well funded with over C$35 million in cash and strategic investors South32 and Teck Resources bolstering the shareholder registry.
It should be noted that American Eagle CEO Anthony Moreau opened his wallet and recently made some open market purchases of AE shares:
Since delivering a disappointing set of drill results in January, AE shares have been traversing a range-bound oscillation. There is some minor resistance at $.55, followed by a gap fill up at $.65:
AE.V (Daily)
I anticipate a number of updates from American Eagle in May, including a more detailed drill plan.
Disclosure: Author owns AE.V SIG.V at the time of publishing and may choose to buy or sell at any time without notice.
DISCLAIMER: The work included in this article is based on current events, technical charts, company news releases, corporate presentations and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. This article is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDARplus.ca for important risk disclosures. It’s your money and your responsibility.