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MTM Appoints Highly Credentialed Mineral Processing Executive Michael Walshe as CEO
MTM Critical Metals Limited (ASX:MTM) (MTM or the Company) is pleased to announce the appointment of highly credentialled mineral processing executive Mr Michael Walshe as Chief Executive Officer of the Company with immediate effect.
Highlights:
- Chemical Engineer & MBA Michael Walshe appointed as CEO effective immediately.
- Mr Walshe comes from a 15-year career in mineral processing in executive roles with industry leader Metso (formerly Metso:Outotec), and more recently as CEO of Voltaic Strategic Resources Limited.
- Mr Walshe has been assisting the Company with technical review and analysis of minerals processing opportunities for its highly promising Flash Joule Heating (FJH) technology.
He brings over a decade of experience with industry leader Metso Outotec, in various technical and senior management roles, covering all major commodities including lithium, rare earths, gold, and base metals. Mr Walshe has extensive expertise in process design, metallurgical flowsheet development, and structuring project finance packages for junior miners via export credit funding. Before joining MTM, he served as CEO of the ASX- listed mineral explorer Voltaic Strategic Resources Ltd from October 2022 until assuming his current role.
Mr Walshe holds a Bachelor of Chemical and Process Engineering (Hons.) from University College Dublin, Ireland, and a Master of Business Administration (Finance) from the Australian Institute of Business (AIB). He is a chartered professional engineer with both Engineers Australia and the Institution of Chemical Engineers (IChemE) and is a member of the Australasian Institute of Mining and Metallurgy (AusIMM).
MTM Chairman, John Hannaford said, “We are delighted that Michael has agreed to join MTM as CEO after serving in an advisory role for the Company. His extensive network in the mining and metals sector, built during his time with Metso Outotec, a global leader in technology, equipment and services for the mining and process industries across all metals, will be crucial to driving MTM in its next phase of growth. Michael’s expertise and insights have already had a positive impact and we are looking forward to seeing what he can deliver in the CEO role.”
Michael Walshe added, “I am excited to join MTM at such a pivotal moment in the company’s journey. The potential of the Flash Joule Heating technology to revolutionise metal recovery is very compelling, and I am thrilled to lead the company in bringing this innovative process to commercial reality.
“With my background in process technology scale-up, heat transfer equipment, and mineral processing across a range of commodities, I am confident that this experience is highly complementary to the ambitious goals set by MTM. The opportunity to apply this expertise to a pioneering technology is both a professional and personal milestone, with the opportunity to redefine efficiency, sustainability, and economic viability in the metals industry.
“I look forward to working with the MTM team to unlock the full potential of this novel technology for our shareholders and the broader industry, while also generating value from our portfolio of promising Critical Metal exploration projects.”
Click here for the full ASX Release
This article includes content from MTM Critical Metals Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Auric Mining
Overview
Auric Mining Limited (ASX:AWJ) is a gold exploration and mining company based in Western Australia. In three-and-a-half years since its ASX listing, Auric has become a gold producer in this premier jurisdiction.
Since incorporation, it has moved from zero to 250,000 ounces of gold resources and zero to 282 square kilometers of tenements. Auric Mining is in the company of some of the biggest gold projects in the Goldfields, including the St Ives Gold Mine, Karora Resources’ Higginsville Operations & Beta Hunt Mine, all multi-million-ounce mines.
Besides gold, there are numerous precious metals being mined in the area with world-class deposits of nickel, lithium and rare earths. Auric is gold-focused and has the potential to become a significant producer in the region.
The Jeffreys Find Pit as of 16 July 2024
Partnering with Auric in its Jeffreys Find Project is BML Ventures of Kalgoorlie (BML), a well-known and adept Kalgoorlie contractor. BML is a specialist mining contractor. It has particular expertise in shallow, open-pit mining with short duration projects in The Goldfields.
The Jeffreys Find Project commenced in May 2023 and is due for completion in the first quarter of 2025. The joint venture is partially exploiting 47,000 ounces of gold resources.
Gold ore on the ROM Pad at Jeffreys Find, Norseman. Ore was hauled to Coolgardie for milling in 2023.
Stage One is now complete and Auric has commenced its second gold milling campaign for 2024 of 150,000 dry metric tonnes from the Jeffreys Find gold mine on 24 July 2024.
Success for Auric at Jeffreys Find means the company is self-funding for 2024 and able to sustain its exploration and development activity without need for additional capital raising. Auric now has a road map for five years of continuous mining and profits.
Grade control drilling at Munda was completed in January 2024
Auric’s primary focus continues to be on the company’s flagship asset - The Munda Gold Project.
To date almost 200,000 ounces of gold resources have been identified at Munda, the asset being part of the wider Widgiemooltha Gold Project, encompassing 22 tenements.
Munda is one of the largest deposits in the Widgiemooltha area having the potential to become a significant gold project.
In mid-year 2023 the company released to the ASX a third-party scoping study on the economics and potential of open-pit mining at Munda.
The scoping study estimates the mining of up to 120,000 ounces of gold over a three-year mine life. It is envisaged gold ore would be toll-processed at a nearby Coolgardie Mill. The study projects free cash profits of between $50 million and $100 million, based on various gold prices.
Production from Munda could commence in the fourth quarter of 2024.
Auric also announced the execution of a binding term sheet for the partial purchase of Win Metals' nickel and lithium rights within the Munda gold project area including seven tenements or applications. Auric further plans to mine a trial pit at Munda Gold potentially in Q1 2025.
Auric is also planning to progress its Spargoville Project, where it has tenements ideally positioned along strike from the Wattle Dam gold mine, a prolific mine which produced 268,000 ounces of gold at 10 g/t, between 2006 and 2013.
An experienced and savvy management team leads Auric Mining towards its vision of becoming a significant gold producer in Western Australia. With the three directors owning approximately 17 percent of the company, they are focused and motivated for success.
Auric Mining’s board of directors: Mark English, Managing Director; Steve Morris, Chair; and John Utley, Technical Director
Steve Morris, non-executive chairman, has more than 25 years of experience in financial and natural resources markets.
Mark English, managing director, has a 40-year career as a chartered accountant and is at ease with all facets of running a public company on the ASX including major equity and debt raisings.
John Utley, technical director, has 35 years of experience in gold exploration and development.
This range of expertise offers a high level of confidence that the company will achieve its goals.
Company Highlights
- Auric Mining is a publicly listed company with a market cap of around $13m.
- Its flagship asset is the 200,000-ounce Munda Gold Project at Widgiemooltha, just 100 kms from Kalgoorlie. It has an aim to begin production in 2024 before more intensive mining from 2025 onwards.
- During 2023 the focus was on mining at its Jeffreys Find Gold Mine, near Norseman. Stage One mining between May and November 2023 produced 9,741 ounces of gold, creating almost $30 million in gross revenue.
- A final reconciliation saw surplus cash of $9.5 million generated. Auric banked $4.78 million, being 50% of the surplus cash as agreed with its JV partner, BML Ventures of Kalgoorlie.
- Auric has commenced the second gold milling campaign for 2024 of 150,000 dry metric tonnes from the Jeffreys Find gold mine.
- The company executed a binding term for the partial purchase of Win Metals' nickel and lithium rights within the Munda Gold Project area further improving the pathway to mining a trial pit at Munda gold project, potentially in Q1 2025.
- As an explorer, Auric has accumulated 282 square kilometers of tenure as it looks to find and mine a million ounces of gold between Kalgoorlie and Norseman.
- The area hosts some of the richest mineral deposits and mines in the world. In addition to gold, Auric also has opportunities for discovery of lithium, rare earths and nickel.
- Auric has three main projects: The Munda Gold Project which is part of the Widgiemooltha Gold Project; Jeffreys Find Gold Mine; The Spargoville Project.
- The company has a board and leadership team with a track record of delivering success for shareholders, particularly in discovering and bringing to production gold projects.
Auric’s tenements are between Norseman and Kambalda in Western Australia.
Key Projects
Widgiemooltha Gold Project & Munda Gold Project
Progression to open-pit mining is gathering momentum with a plan to commence gold production via a starter pit in the last quarter of 2024 at the Munda Gold Project.
The Widgiemooltha Gold Project combines 22 tenements of highly prospective gold country near Widgiemooltha and includes the Munda Gold Project. Since acquiring the Munda tenements, drilling results confirm indicated and inferred gold resources of almost 200,000 ounces (4.48 mt @ 1.38 g/t with 0.5 g cut off).
The Widgiemooltha tenements have substantial coverage at the north end of the Widgiemooltha Dome.
Even with the extensive mining history in the area, considerable exploration prospectivity remains. Several significant gold projects discovered or developed in the past ten years, including:
Auric Mining is now fast-tracking development at Munda. With a number of gold processing mills in the vicinity, the move to production is now gathering momentum.
In mid-2023 a Scoping Study on Munda produced a positive result. The study proposed a shallow open gold mine. At gold prices from $2,400/oz to $2,800/oz, the Production Target for the Project ranges from approximately:
- 1.67Mt at 2.2g/t producing 112.0koz gold, to
- 2.18Mt at 1.9g/t producing 129.1koz gold.
The Production Target generates an undiscounted accumulated cash surplus after payment of all working capital costs, but excluding pre-mining capital requirements, of between approximately $54.7m to $101.4m.
Mining is contemplated over an approximately 3-year period (13 calendar quarters).
Pre-mining capital and start-up costs are estimated to be approximately $0.8m to $1.7m.
Working capital requirements of approximately $3.9m to $8.1m were estimated based on a Stage 1 starter pit design.
Grade Control Program results at Munda.
To further advance the project, Auric completed a grade control drilling program at Munda in January 2024. In total 351 holes were sunk on a 10m x 10m grid over a potential starter pit.
Assay results include numerous significant intercepts at a 0.5g/t cut-off with high grade or broad intercepts such as:
Further grade control drilling is envisaged as the company hones in on this high grade deposit.
A starter pit lasting about three months is envisaged in the last quarter of 2024. More intensive mining would follow in the period 2025-2027.
In all, Munda is projected to be a short-life project, able to produce exceptional cash profits with a gold price continuing at above $3000 an ounce.
Jeffreys Find Gold Mine
Fresh from mining almost 10,000 ounces of gold in 2023, Jeffreys Find’s Stage Two is certain to be significantly greater in scope.
The Jeffreys Find Gold Mine is located approximately 45 kilometers northeast of the town of Norseman and 12 kilometers off the main Eyre Highway via a haul road.
Jeffreys Find is a short-life mine with a total gold-resources estimate of nearly 50,000 ounces.
Magnetic image of the gold resource at Jeffreys Find
The company has performed remarkably well with this mine, having acquired the tenements just 3.5 years ago.
Stage One mining took place over six months, from May to November 2023 with about 175,000 tonnes of gold ore hauled to the Greenfelds Mill at Coolgardie where it was processed. Final refining and sale of gold bullion produced took place at the Perth Mint.
Stage One – Production & Revenue Statistics
The project is a joint venture undertaking between Auric and well-known Kalgoorlie contractor BML Ventures Pty Ltd (BML).
Auric’s risk is mitigated by BML who assume all operating costs including mining and haulage. Gold processing costs are recovered from the sale of gold bullion. After all costs have been deducted surplus cash is split equally between the partners.
For final mining in 2024 Auric has contributed $1 million in cash towards working capital which will be repaid towards the end of the final phase of mining.
The final pit shell at Jeffreys Find Gold Mine will be premised on a gold price of $2,900 an ounce, compared to the Stage One pit which was designed on the basis of gold at $2,600 an ounce. As a result the tonnage of ore being hauled to the mill will be substantially higher in 2024.
Equipment is being mobilised to the mine site in February and mining will recommence in March 2024. A continuing higher gold price has placed the joint venture in a solid position to throw off surplus cash well in excess of what was achieved in 2023.
Auric’s MD Mark English, Chairman Steve Morris and Technical Director John Utley at the Perth Mint with Auric gold bars from its Jeffreys Find Gold Mine.
Spargoville Project
Highly prospective tenements as company looks for gold on strike to Wattle Dam
Located approximately 35 kilometers southwest of the mining town Kambalda, the Spargoville Project is an underexplored asset with partially tested or entirely untested gold, nickel and lithium anomalies.
The asset sits north of the Wattle Dam gold mine. The Wattle Dam gold mine produced 268,000 oz of gold at an average grade of 10 g/t between 2006 and 2013.
While only partially drilled, initial exploration results from the Fugitive Prospect include an intercept at 14 meters with a grade of 2.51 g/t gold, indicating the asset’s promising potential.
Auric’s tenements at The Spargoville Project.
Management Team
Auric Mining’s Management and Board of Directors have a wealth of experience in gold discovery, in mine operations and across the full spectrum of finance and administration. That experience stretches to all parts of the globe.
Board of Directors
Steven Morris – Non-executive Chairman
Steve Morris is a well-known financial markets executive with more than two decades experience at a senior level. He garnered industry respect as head of private clients for Patersons Securities, now Canaccord Genuity, and has also been managing director of Intersuisse. Mr. Morris has served as a senior executive of the Little Group. From 2014 to 2019, Morris was a non-executive director of De Grey Mining (ASX:DEG), a gold company now with a $2.4 billion market capitalization. Mr. Morris is well connected in finance circles and was a board member of The Melbourne Football Club for nine years including three years as the vice chairman.
Mark English – Managing Director
Mark English is a Chartered Accountant with more than 40 years’ experience in business. English was the founding director of Bullion Minerals Ltd, now DevEX Resources (ASX:DEV) a company he managed for seven years before taking it to an IPO. Mr. English has considerable experience with major equity and debt raisings. He currently sits on the Board of WA integrated agricultural company Moora Citrus Group, one of the nation’s largest citrus producers and processors.
John Utley – Technical Director
John Utley has a 35-year career in mining and exploration with a dominant focus on gold assets. He holds a master’s degree in Earth sciences from the University of Waikato in New Zealand. Mr Utley has worked in Australia, South America, Papua New Guinea and most recently in Canada where he was the Chief Geologist for Atlantic Gold Corporation, a company now owned by St Barbara (ASX:SBM). He spearheaded exploration and development of the Touquoy Gold Mine in Nova Scotia, Canada, prior to being acquired by St Barbara. Mr Utley previously worked with Plutonic Resources (ASX:PLU) and was head of the exploration team at the Darlot Gold Mine during the discovery and development of the 2.3-million-ounce Centenary gold deposit.
Diamond Drilling Underway at Bald Hill Cobalt Copper Prospect, Broken Hill
Rimfire Pacific Mining (ASX: RIM, “Rimfire” or “the Company”) is pleased to advise that a 1,000-metre diamond drill program has commenced at its 100% - owned Bald Hill Copper Cobalt Prospect (Broken Hill Project) which is located 30 kilometres west of Broken Hill, NSW (Figures 1 and 2).
Highlights
- 1,000m diamond drill program testing for extensions to previously obtained high grade drill intercepts at Bald Hill, e.g.;
- 125m @ 0.13% Co from 198m incl 97m @ 0.15% Co,
- 58m @ 0.13% Co from 62m incl 12m @ 0.24% Co and 17m @ 0.15% Co,
- 33m @ 0.11% Co from 58m incl 4m @ 0.23% Co and 2m @ 0.21% Co, and
- 6m @ 0.51% Cu from 56m in FI2471
- Drilling will also test a very strong magnetic anomaly which is interpreted to be a potential extension to the previously demonstrated Bald Hill cobalt and copper mineralisation
- Rimfire’s Broken Hill Project lies within same geological domain as the Mutooroo Deposit (HAV.ASX) - 191Kt copper, 20Kt cobalt and 86Koz gold and the Broken Hill Cobalt Project (COB.ASX) - 87Kt cobalt
- Drilling assay results expected by mid-October 2024
Commenting on the announcement, Rimfire’s Managing Director Mr David Hutton said: “Rimfire is exploring throughout New South Wales for critical minerals that are associated with global decarbonisation strategies, such as scandium, PGEs, copper, and cobalt.
While we remain firmly focussed on delivering a maiden scandium JORC resource at Fifield and Avondale, we are also keen to advance our highly prospective Broken Hill Project especially the Bald Hill prospect.
Given the existing drill intercepts coincide with an outstanding magnetic anomaly along strike and with all targets lying within a favourable geological setting we think that Bald Hill is an exciting opportunity to discover a significant cobalt and copper deposit. We look forward to providing further market updates as new information comes to hand.”
Drilling will test the significance of a very strong magnetic anomaly interpreted to be a potential extension to previously drilled high-grade cobalt (Co) and copper (Cu) mineralisation at Bald Hill, (See Rimfire ASX Announcement dated 18 September 2023), i.e.;
- 33m @ 0.11% Co from 58 metres in FI2469 including 4m @ 0.23% Co and 2m @ 0.21% Co
- 100m @ 0.08% Co from 71 metres in FI2470 including 68m @ 0.10% Co,
- 125m @ 0.13% Co from 198 metres in FI2470 including 97m @ 0.15% Co,
- 58m @ 0.13% Co from 62 metres in FI2471 including 12m @ 0.24% Co and 17m @ 0.15% Co, and
- 6m @ 0.51% Cu from 56 metres in FI2471.
Mineralisation at Bald Hill is associated with a greater abundance of sulphides with zones of coarse-grained semi-massive pyrite / pyrrhotite (plus lesser amounts of chalcopyrite and sphalerite) hosting individual single metre grades of up to 0.79% Co (FI2471 – 67 to 68 metres).
Detailed ground magnetic surveying (on 50m spaced east west lines) undertaken post the 2023 drilling identified a very strong magnetic anomaly [peak value – 57,744nT] coincident with and extending from the cobalt and copper drill intercepts (See Figures 3 – 5).
The Bald Hill magnetic anomaly trends NNE, dips to the southeast, and has a near surface extent of 450 x 400 metres and extends to a vertical depth of approximately 300 metres below surface. 3D modelling suggests that the anomaly plunges to the southeast with Rimfire’s 2023 diamond holes just “clipping” the top of the anomaly.
This is highly significant as the Bald Hill mineralisation is intimately associated with magnetic minerals, i.e. pyrrhotite and magnetite, and as such the magnetic anomaly is interpreted to be “mapping” a potential extension to existing cobalt and copper mineralisation.
Diamond drillholes will be positioned specifically to intersect the magnetic anomaly to confirm its significance.
Plenty of upside with additional targets identified
In addition to Bald Hill, several other targets have been identified across the Broken Hill Project from a review of historic exploration data – principally aeromagnetic and gravity geophysical data, drilling data and surface geochemistry. Ground magnetic surveying, geological mapping and rock chip sampling undertaken by Rimfire during the last 12 months have refined the targets.
Click here for the full ASX Release
This article includes content from Rimfire Pacific Mining Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Fine Grained Alkaline Igneous Host of High Grade Nb/REE Identified at Wabli Creek
Reach Resources Limited (ASX: RR1 & RR1O) (“Reach” or “the Company”) is pleased to provide an update on the Company’s high-grade Niobium and REE project at Wabli Creek, Gascoyne, W.A.
HIGHLIGHTS
- Identification of a fine-grained alkaline igneous rock type as the host of the high grade Niobium/REE/Titanium mineralisation announced 28 May 2024. This is a significant development as the host is not from pegmatite geology and increases the likelihood of a carbonatite association.
- Expert geophysical consultant Southern Geoscience has identified multiple new targets they consider high priority for the potential discovery of more Niobium/REE enriched intrusive features at Wabli Creek, Gascoyne, W.A.
- Detailed geophysical imagery analysed by Southern Geoscience shows a strong correlation with geochemical targets, previously identified by Sugden Geoscience (ASX Announcement 21/12/23), adding additional confidence to high-grade Niobium (Nb) and Rare Earth Elements (REE) targets.
- The majority of the new Nb & REE targets identified are located in and around the margins of the ovoid intrusive feature (ASX Announcement 28 May 2024).
- The recently identified ovoid late-stage intrusive feature, considered the likely parental source of the Nb-Y-Ta-Ti-REE fine grained Alkaline igneous rocks at Wabli Creek, has been clearly confirmed by the high resolution imagery.
- The latest interpretation by Southern Geoscience was primarily concerned with the identification of places which may provide further intrusive features prospective for Niobium, Tantalum, REE’s and Lithium. Targeting strategies focused on lithological associations, structural context, structural complexity and deformation and proximity to possible source granitic bodies.
The source of the high grade niobium, REE, titanium mineralisation outlined in ASX announcement 28 May 2024 has most recently been identified by the Reach exploration team as a fine grained alkaline igneous rock. This is a significant development for the project as it was considered previously that the mineralisation was from a pegmatite source. Importantly, the alkaline igneous rock has a strong association with carbonatite and therefore further laboratory assessment is underway to confirm the potential presence of carbonatite material.
Figure 1: Multiple new high priority Niobium/REE targets, Wabli Creek.
Figure 2: Location of In situ assay results (24WRCK049 & 24WRCK046), previously announced per ASX Announcement 12 June 2024. Also, an example of one of the new high priority Nb/REE targets.
In addition, Southern Geoscience was engaged to analyse detailed 50m line spaced magnetic and radiometric data that was flown over the tenement. The analysis of this data by Southern Geoscience enabled this latest interpretation of major structures, including faults and traps that may act as conduits for potentially more fine grained alkaline igneous intrusions, resulting in multiple new targets for the Company.
Targeting by Southern Geoscience was largely focused around the margins of the late stage ovoid feature and aimed to identify sites of significant structural complexity and or/lithological contacts which may be exploited by dykes or other intrusive features such as the alkaline igneous mineralised rock.
Across the targets a major shear zone with cross-cutting faults over printed by the late stage ovoid feature was identified, in addition to the identification of two areas that more represent more late stage intrusives and a layered magnetic unit of potential greenstone lithology which is often an area where dykes intrude.
Click here for the full ASX Release
This article includes content from Reach Resources, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
What is the VIX Index? (Updated 2024)
Buy low, sell high. The trend is your friend. Sell in May and go away. Wall Street is teeming with familiar financial adages. But there’s one you may not have heard of: “When the VIX is high, it’s time to buy.”
Similar to “buy the dip,” the idea is that when the level of fear in the markets has reached its peak, it's the perfect time to buy because stocks are most likely trading at deep discounts. To quote famed investor Warren Buffet of Berkshire Hathaway (NYSE:BRK.A,NYSE:BRK.B), “Be fearful when others are greedy, and greedy when others are fearful.”
But what is the VIX? Here the Investing News Network answers that question and more, including whether or not the old saying still holds true in times of heavy uncertainty.
What is the VIX?
VIX is shorthand for the Volatility Index (INDEXCBOE:VIX) of the Chicago Board Options Exchange (CBOE). Since 1993, the VIX has tracked real-time price changes of near-term S&P 500 (INDEXSP:.INX) options.
Options are financial contracts that give holders the right to buy or sell an underlying asset — stocks, bonds, exchange-traded funds, contracts, etc. — at a certain price within a certain time period. Options prices for particular stocks are determined by the probability that the stock’s price will reach a certain level, known as the strike price or exercise price.
The VIX tracks the S&P 500 as opposed to other indexes because it is considered the leading indicator of future volatility in the overall US stock market.
For many knowledgeable investors, the VIX is a globally recognized go-to benchmark index for measuring the expectation of volatility in the stock market over the next 30 days based on how wide or narrow the swing in prices is for S&P 500 options.
Why does the VIX go up when the market goes down?
The VIX has an inverse relationship with the S&P 500, meaning that spikes in the VIX typically occur when stock prices drop.
The more pronounced the options price swings on the S&P 500, the higher the risk of stock market volatility and the higher the VIX climbs — a signal that a crash may be imminent. On the flip side, a significant drop in the VIX could herald a rally.
It’s important to note that the VIX is not a crystal ball, but rather a real-time snapshot of how investors are feeling about the level of near-term volatility in the market. Is the current sentiment negative or positive? Confident or fearful?
“Volatility, or how fast prices change, is often seen as a way to gauge market sentiment, and in particular the degree of fear among market participants,” explains Investopedia. Hence why the VIX is also referred to as the “fear index.”
Investors can use the VIX to measure the level of fear in the market and employ this information when making investment decisions. The higher the VIX level, the more likely the possibility that fear and uncertainty is driving the markets.
What is a normal range for the VIX?
The normal range for the VIX is values ranging between 12 and 20. Forbes advises investors that when the VIX is below a value of 20, that is reflective of a stable investment environment. A VIX value of 12 or lower is indicative of high optimism in the stock market — the mark of extremely bullish investor sentiment.
Once VIX values rise above 20, the market is said to be experiencing “abnormally high volatility.” Once the VIX is seen pushing above 30, that’s a clear sign of a bear market — when investors fear there is too much uncertainty and risk in the stock market.
In fact, five of the 10 highest VIX values since the index launched in 1993 occurred in the lead up to the 2008 financial crisis, while the remaining five are associated with the COVID-19-induced stock market crash in 2020.
The VIX hit an all-time high of 82.69 on March 16, 2020, during the early days of the COVID-19 pandemic. The index’s second highest value, 80.86, was reached on November 20, 2008, as markets reeled from the fallout over mortgage-backed securities.
What is the all-time highest recorded spike in the VIX index?
The VIX recorded a record high spike on August 5, 2024, when it jumped 42 points to 65.73 intraday as markets around the world experienced sell offs and recession fears rose. This also marked the highest point of the VIX index since the COVID-19 pandemic.
The VIX moved down to close at 38.56 by the end of the day, still quite high but well below the top 10 closes discussed above.
Can you invest in the VIX?
While you can’t invest directly into the VIX, there are a number of exchange-traded products (ETPs), such as futures contracts, options contracts and ETFs, that are based on the future anticipated value of the index.
These are three VIX-associated ETPs available to investors:
- The ProShares VIX Short-Term Futures ETF (BATS:VIXY), which offers investors exposure to the S&P 500 VIX Short-term Futures Index, is designed for those investors looking “to profit from increased volatility in the S&P 500, as measured by the prices of VIX futures contracts.”
- The iPath Series B S&P 500 VIX Short-Term Futures ETN (BATS:VXX) seeks returns linked to the performance of the S&P 500 VIX Short-term Futures Index by providing short-term exposure to futures contracts of specified maturities on the VIX index. As an exchange-traded note (ETN) rather than an ETF, VXX is backed by Barclays’ (NYSE:BCS,LSE:BARC) credit instead of by assets.
- The iPath Series B S&P 500 VIX Mid-Term Futures ETN (BATS:VXZ) is also linked to the performance of the S&P 500 VIX Short-term Futures Index, but the exposure is to longer-dated futures contracts. This factor makes VXZ less subject to the significant contango-related return erosion seen by short-term products like VXX or VIXY.
If investors are able to get the timing right, VIX futures ETFs can be a hedge against a market crash. However, the opportunities inherent in VIX ETPs don't negate the fact that they do carry significant risk, and are not for those with a longer-term investment strategy or low risk tolerance. Analysts at ETF.com warn that these products “deliver poor long-term exposure to the VIX index ... (and) have a history of erasing vast sums of investor capital over holdings periods as short as a few days.”
In other words, VIX ETPs have a tendency to suffer from contango, which is when a futures price is higher than the current price. If held for too long a period, they lose their value, making them an unsuitable permanent hedge against market volatility.
Investors with high risk tolerance and a knack for playing the short game can also buy VIX call options as a potential hedge against stock market downturns. But once again, as Investopedia cautions, it's important to time the market right. Buying in the middle of a market crash can lead to oversized losses.
This is an updated version of an article first published by the Investing News Network in 2022.
Don't forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article
How is the S&P/TSX Composite Index Weighted? (Updated 2024)
The S&P/TSX Composite Index (INDEXTSI:OSPTX) is the principal market measure for the Canadian equities market, and is calculated and managed by S&P Dow Jones Indices.
The index, which was launched in 1977, includes both common stocks and income trust units.
How is the S&P/TSX Composite Index calculated? The weightings of the index’s securities are decided through float-adjusted market capitalization. In this method, market cap is determined by share price and the amount of outstanding shares available to the general public — restricted shares owned by other publicly held companies or company executives are excluded.
What are the S&P/TSX Composite Index's eligibility requirements?
The S&P/TSX Composite Index is reviewed each quarter; at that time, additions or removals can be made. To be eligible for addition, the company needs to be incorporated, formed or established in Canada and must have traded on the TSX for at least six full months.
Additionally, the security must have had a volume-weighted average price of C$1 over the past three months and over the last three trading days of the month end prior to the index committee’s quarterly review. It must also represent a weight of 0.04 percent of the index at a minimum for the last 10 trading days based on its volume-weighted average price.
Stock liquidity, which is measured by float turnover, must be at least 0.5, or at least 0.25 in Canadian volume for dual-listed stocks. Float turnover is calculated by dividing the total number of shares traded over the past year by float-adjusted shares outstanding.
Securities that cannot be included in the S&P/TSX Composite Index include those issued by mutual fund corporations, preferred shares, warrants and all other types of securities that the index committee decides are inappropriate. Securities that have been listed on the TSX for fewer than six months are also ineligible.
Securities may be removed from the index if they fall beneath the index committee’s buffer criteria at the time of the quarterly review. To stay eligible, securities must maintain a volume-weighted average price above C$1 over the three months leading up to a quarterly review. They must also keep a minimum index weight of 0.025 percent three days prior to the review, as well as liquidity of 0.25.
Securities may also be removed at the index committee's discretion at any other time. If a security is removed during the quarterly review it is ineligible for at inclusion for 12 full calendar months unless the committee believes the business has substantially restructured.
What sectors are covered in the S&P/TSX Composite Index?
There are 11 categories of securities included in S&P/TSX Composite Index: financial, energy, materials, industrial, consumer discretionary, telecommunications services, healthcare, consumer staples, utilities, information technology and real estate.
The TSX sector breakdown shows the most constituents in financial and energy followed by the industrial and materials categories. Its performance therefore heavily reflects how those industries are doing, and disturbances in the economy or oil price dips can have a big impact.
Below we’ve broken down each of the 11 sectors as laid out by S&P Dow Jones Indices in its factsheet published July 31, 2024. We have also listed the main players in each category.
1. Financial
The financial market represents 31 percent of the S&P/TSX Composite Index, and its top constituent by weight is the Royal Bank of Canada (TSX:RY,NYSE:RY). The bank provides personal and commercial banking, as well as insurance, corporate and investment banking, transaction processing services and wealth management. Its investment banking services are ranked among the best in the world by several organizations.
2. Energy
The energy sector, which accounts for about 17.7 percent of the S&P/TSX Composite Index, features Enbridge (TSX:ENB,NYSE:ENB) as one of its top constituents by TSX sector weight. Enbridge operates across North America, moving nearly two-thirds of Canada’s oil exports to the US and transporting nearly 20 percent of the natural gas consumed in the US.
The company also operates North America’s largest natural gas utility by volume, Enbridge Gas. Enbridge was an early investor in renewable energy, and has a growing offshore wind portfolio.
3. Industrials
Securities in the industrial category comprise 13.6 percent of the S&P/TSX Composite Index. Canadian Pacific Kansas City (TSX:CP,NYSE:CP) stands tall as the top constituent by weight in this category. Formed after the 2023 merger of Canadian Pacific Railway and Kansas City Southern, this transcontinental freight railway company transports bulk commodities in Canada, the United States and Mexico.
4. Materials
Materials securities make up 12.5 percent of the S&P/TSX Composite Index, and the sector is heavily populated with mining and agriculture companies. One notable company in this category is Nutrien (TSX:NTR,NYSE:NTR), the world's largest potash producer, as well as an agricultural nutrient and equipment provider. It was born out of a merger between Agrium and Potash Corporation of Saskatchewan, which was completed in January 2018.
5. Information technology
Information technology securities comprise 8 percent of the index. Ecommerce platform Shopify (TSX:SHOP,NYSE:SHOP) is a major component of this sector. The widespread platform, which allows retailers to set up their own online storefront, is used by over 2 million sellers including Budweiser, Sephora, Red Bull, Tesla (NASDAQ:TSLA) and Nestle (OTC Pink:NSRGF,SWX:NESN).
6. Consumer staples
Consumer staples represent 4.4 percent of the S&P/TSX Composite Index. One major stock in this category is Maple Leaf Foods (TSX:MFI,OTC Pink:MLFNF), which operates in the meat products and agribusiness sectors. It is Canada’s leading consumer packaged meats company, operating several brands and partnering with many sister brands as well. It exports to more than 20 global markets, including the US and certain markets in Asia.
7. Utilities
Utilities securities register at 3.8 percent of the S&P/TSX Composite Index. Algonquin Power & Utilities (TSX:AQN) is one major representative of this sector. It works in renewable energy such as wind, solar, hydro and thermal, as well as regulated utilities including electricity, water and natural gas. The firm has US$17.6 billion in assets across North America.
8. Consumer discretionary
Around 3.5 percent of the S&P/TSX Composite Index is held by consumer discretionary securities. Dollarama (TSX:DOL,OTC Pink:DLMAF) represents one of the top constituents in this category. The Canada-based company operates discount retail stores and provides a broad range of everyday consumer products, general merchandise and seasonal items, with merchandise at low, fixed price points.
9. Communication services
Telecommunications securities comprise 3.1 percent of the S&P/TSX Composite Index and include companies like BCE (TSX:BCE,NYSE:BCE). BCE is best known for its ownership of Canadian telecommunications property Bell, which has the second highest market share in Canada.
10. Real estate
The real estate sector occupies 2.1 percent of the S&P/TSX Composite Index. First Capital Real Estate Investment Trust (REIT) (TSX:FCR.UN) is one of the securities involved in this space. The company specializes in hybrid properties combining living space with retail and commercial spaces.
11. Healthcare
Healthcare securities make up 0.3 percent of the index. One of the companies represented is Bausch Health (TSX:BHC,NYSE:BHC), a multinational pharmaceutical company that develops, manufactures and markets drugs targeting skin diseases, gastrointestinal disorders, eye health and neurology.
FAQs for the S&P/TSX Composite Index
How to invest in the S&P/TSX Composite Index?
As with most indexes, it's not possible to invest directly in the S&P/TSX Composite Index. Investors can take positions in individual stocks held by the S&P/TSX Composite Index, but there are better options. Several investment vehicles offer exposure to the performance of the index. Exchange-traded funds (ETFs) such as the iShares Core S&P/TSX Capped Composite Index ETF (TSX:XIC) offer one route, as do mutual funds such as the MDPIM S&P/TSX Capped Composite Index Pool.
Is the S&P/TSX Composite Index a good investment?
Canada consistently ranks among the world's top 10 economies, and closed out 2023 with a GDP of $1.89 trillion. As the premier indicator of market activity in the Canadian stock market, the S&P/TSX Composite Index provides a stable, diverse portfolio of many of the country’s best blue-chip stocks in key industries, including energy, resources, banking and retail.
What is the combined market cap of all the companies in S&P/TSX Composite Index?
As of July 31, 2024, the S&P/TSX Composite Index had an adjusted market cap of more than C$3.668 trillion.
This is an updated version of an article originally published by the Investing News Network in 2014.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Melissa Pistilli, currently hold no direct investment interest in any company mentioned in this article.
Global Markets See Sharp Declines as US Recession Concerns Mount
Fears of a potential recession in the US triggered a massive global stock selloff on Monday (August 5), resulting in fast and sharp declines across major financial markets worldwide.
The turmoil led to significant losses, with various indexes experiencing their worst performance in months.
Preliminary data cited by Reuters on Monday shows the S&P 500 (INDEXSP:.INX) dropped by 2.98 percent to close at 5,187.36 points. The Nasdaq Composite (INDEXNASDAQ:.IXIC) fell by 3.38 percent to 16,208.38 points, while the Dow Jones Industrial Average (INDEXDJX:.DJI) decreased by 2.59 percent, ending at 38,706.79 points.
This marked the steepest three day percentage declines for these US indexes since June 2022.
European markets also faced significant declines, with the STOXX Europe 600 (INDEXSTOXX:SXXP) dropping by 2.9 percent, and major indexes in Germany, France and the UK falling between 2.5 and 3.5 percent.
Asian markets were not spared either. Japan's Nikkei 225 (INDEXNIKKEI:NI225) fell by 3.2 percent, while the Hang Seng Index (INDEXHANGSENG:HSI) in Hong Kong dropped by 2.8 percent.
Meanwhile, the S&P/TSX Composite Index (INDEXTSI:OSPTX) ended Tuesday (August 6) down 1.58 percent at 21,979.36 points, its lowest close since early July. The materials and healthcare sectors led the declines.
Colin Cieszynski, chief market strategist at SIA Wealth Management, told Reuters that Tuesday's selloff was a "catch-up effect" for Canadian markets, which had been closed for a holiday on Monday as global markets faced volatility.
The widespread market downturn began as concerns over a US recession intensified following a series of economic data releases that suggested weakening economic conditions. Investors were particularly alarmed by the unexpected rise in the US unemployment rate and slower-than-expected jobs growth, which fueled fears of an impending slowdown.
Addressing whether more pain is still to come, Kevin Nicholson, global fixed income chief investment officer at Riverfront Investment Group, said time will tell. “I think that the data will play out over time and let us know if today’s reaction is an overreaction or the appropriate reaction,” he commented to the news outlet.
US Federal Reserve policymakers, including Chicago Fed President Austan Goolsbee and San Francisco Fed President Mary Daly, recently dispelled notions of an economic freefall, despite the necessity of rate cuts to prevent a downturn.
"If the market moves give us an indication over a long arc that we're looking at a deceleration of growth, then we should react to that," Goolsbee said during the Kansas City Fed's annual economic symposium in Jackson Hole.
"As you see jobs numbers come in weaker than expected but not looking yet like recession, I do think you want to be forward-looking at where the economy is headed for (in) making the decisions,” he added.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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