Much like the rest of the world, the year in Canada is well worth a head nod to reflect upon 365 days filled with both recovery and unrest that has kept the upper portion of North American on its toes throughout all 52 weeks.
While the year was full of "out of the ordinary" events such as the G20 meeting of world leaders essentially shutting down Canada’s biggest city, Toronto, in June due to sometimes violent protests, the Canadian economy and stock market continued to recover during the year, in an albeit sometimes tumultuous manner, better manner than any of its G7 partners.
The resource-heavy Canadian exchanges benefited greatly from unsteady global investors that still seem to carry a shadow of a doubt, to say the least, about the sustainability of world economic recovery which pushed up most commodity prices during the year. At the same time, non-commodity or resource-based companies generally were also carried back northward by bullish investors, analysts and a market that really "got its wings back" after the U.S. economic recession was officially declared in September to have ended in June 2009.
Despite hitting a high of 89 early in the year (February to be exact), consumer confidence is heading into the end of the year at a subdued, but stable level of 82.8, according to data compiled in November. Further supporting the road to recovery, jobs that were lost during the recession -- and then some -- have been recuperated, while our southern counterpart has lost an additional eight million jobs and has gained back only a small portion of those jobs.
This gives great kudos to Canada’s minor $40-billion stimulus package as compared to the nearly $800-billion stimulus in the States to aid in economic and job recovery. In fact, Canada’s unemployment rate, according to the latest statistics from October has dropped to 7.6% as compared to approximately 8.5% at the same time last year.
While countries globally have spent exorbitant amounts of money to balance federal budgets, Canada has maintained a reasonable level throughout the recovery, with the deficit only three percent of GDP and declining throughout 2010.
Potash of Saskatchewan ruled the ink of headlines as the ongoing war waged with the industry mammoth, Australia-based BHP Billiton and its takeover of the Company. The battle put Saskatchewan on the global stage for its potash resources and carried huge implications for the province and its materials.
The proposed takeover captivated the country as Premier Brad Wall firmly planted his feet as an adversary to the takeover. Those against the acquisition that could remove $2 billion Canadian from the province's coffers in the next 10 years rejoiced in November when Investment Canada turned down the hostile bid.
Another big development that shook certain Canadian provinces in 2010, was the introduction of the HST (Harmonized Sales Tax) in Ontario and British Columbia. The HST introduction in those two provinces was greeted angrily by residents and still is being fought in British Columbia to this day.
Since the HST introduction, the economies of Canada’s most populated provinces have slowed down substantially. The HST was also the catalyst of a real estate frenzy in both provinces which saw average home prices race to new levels. Many economists are now worrying that the Canadian housing market is overpriced; however there is disagreement on whether or not a correction is looming.
With an average detached home in Vancouver now netting close to $1 Million, the case for over heated real estate is a real threat, however with a sound economy, banking system and with tightened home ownership rules, a U.S. style real estate crash does not look like it’s in the cards, at least for now.
That real estate frenzy was quickly distinguished by July 1, as investors wanted to purchase real estate before the HST was introduced and by the end of 2010, the Canadian real estate market was back to a normal market with buyers and sellers in harmony in most areas of the Country.
The resource industry, led by gold and oil prices, spent more time on the front page than any other topic in 2010. Rarely had a day gone by for extended periods of the year when headlines didn’t contain phrases similar to "gold reaches new high" or "oil prices continue upward."
World leaders such as energy giant Teck Resources saw shares climb more than 50%, the world’s #1 gold producer, Barrick Gold, grabbed gains to the tune of 30%, while Suncor rebounded from February lows of under $30 per share; rising 30% as oil surges towards $100 per barrel and gold set record highs by piercing through $1,400 per ounce.
Overall, Toronto’s main index, the TSX Composite surged forward every month since June to close 2010 at two-year highs; up nearly 15% since January and only had three months were the index closed lower than the previous month.
Following along in the exact same manner, the TSX Venture Composite Index climbed from 1,525 to lead all major North American indexes in percentage gains as it climbed to nearly 2,250; representing gains approaching 50% for the year. The Venture continues to impress as the 50% gains from 2010 rest on top of the 100% gains that were produced in 2009.
At AllPennyStocks.com, we had another standout year for bringing emerging companies to our faithful, but two Canadian small-cap stocks in particular stand out as we review our 2010 performance: CMC Metals Ltd. (TSX-Venture:CMB) and Crosshair Exploration and Mining Corporation (TSX:CXX).
We turned our spotlight on Vancouver, British Columbia-based CMC Metals in June when the price per share was at 19 cents and while it took a bit of time for investors to realize the true potential of this miner, the price eventually launched and hit a peak of $0.475 for a gain of 150%. Even for those that didn’t sell at the top, the current levels are not far off as the stock price is still holding strong at $0.41; representing gains of 116%.
The rise was fueled by ongoing developments at CMC’s mining projects which continuously proved formidable reserves and even generated revenues. Bulk samples taken at the Silver Hart Mine were shipped and a Letter of Credit was received in the amount $572,340.35 as a security for payment in November.
Final invoice pricing for silver will be based on silver prices 10 days from shipment date and bodes well for the Company as silver prices are still pushing north, with no real pullback being anticipated. Recent news from the Silver Hart Mine announced the conclusion of infill drilling in the KL Zone with results showing 142.9 ounces per ton silver.
CMC also is making strides with its Bishop Mill facilities as the recent purchase of a coarse gravity circuit expands the capability of the types of ores the mill can handle plus double the mill capacity to 100 tons per day. Additionally, CMC signed a Letter of Intent with Pruett Ballarat Inc. to establish a 50/50 Joint Venture relationship on several of the developmental mines under the control of Pruett.
While CMC provided great gains, fellow Vancouver miner Crosshair Exploration and Mining Corp. (TSX:CXX) was our explosive Canadian pick of the year. Featured in February at $0.215, the stock went through a split which converted our entry price to $0.86. Regardless, the price has continued to flourish throughout the year, hitting a 52-week high of $2.80 today, reaping gains of a whopping 226% for investors who held the whole way through.
While Crosshair operates three divisions and controls a host of properties, throughout the year, Crosshair’s flagship project, the Central Mineral Belt Project in Labrador, has time and time again provided data showing significant vanadium resources. Latest reports showed that the vanadium contained outside of the existing uranium resource includes 30.92 million pounds of V2O5 (vanadium pentoxide) in the indicated category and an additional inferred resource of 81.33 million pounds of V2O5.
While these developments have helped drive the share price, developments on other projects such as its Promise Project, located in central Newfoundland, Canada, have provided an assist with the latest assays detailing up to 19.9 g/t gold over 1.60 metres from the eastern extension.
As 2010 winds down, there is a lot for Canadians to be proud of for the year and certainly plenty of promise for a prosperous 2011. While many countries around the world continue to flounder and are running like a four-cylinder with bad gaskets, Canada is heading towards hitting on all eight cylinders.
Compared to counterparts, the financial condition is sound and the budget is under control. Analysts are seeing bluer skies ahead, which may give Canada that important transition from a recovering economy to an expanding economy.
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