By Angela Harmantas
A looming showdown between government and big oil in Alberta, open season for Barrick’s assets and a record month for real estate in Toronto and Vancouver – here’s what you need to know today:
Alberta’s royalty hike is hampering further investment in oil and gas, according to Canadian Natural Resources. The company, which is Canada’s largest independent oil and gas business, reduced its capital spend budget by $245 million for the remainder of the year after it posted a net loss of $405 million in Q2 2015. The key figure to note here, however, is the $579 million non-cash charge the company took to account for future tax liability. Alberta’s timing for raising royalties couldn’t be worse with oil prices being where they are, and it looks like a showdown might be coming between the province and its dominant industry.
The fire sale of Barrick’s assets is just beginning. The company announced in its earnings call on Thursday that nearly all of its non-core properties were up for grabs as management struggles to reduce its massive debt and revive its slumping share price. In the years I’ve been covering the mining industry I don’t think I can remember a company being so forthright about its desire to rid itself of assets. As I said in an earlier post, though, who’s buying? Will we see interest from Goldcorp or Newmont, or maybe another creatively structured deal in the vein of Agnico Eagle and Yamana’s joint takeover of Osisko last year? I’ll be watching this space in the months to come.
Worries that the housing bubble was about to burst in Toronto were put to rest yesterday as Toronto’s real estate board reported a record number of sales in the month of July. Unsurprisingly, condos are leading the way, with the number of units sold increasing by 14.4 percent over 2014 numbers (home sales were up 8 percent). I’m a renter in Toronto and it looks like I’ll stay that way for a while, but I’m glad I’m not in Vancouver, where July sales were up an astonishing 30 percent. Now here’s a number that puts the Toronto and Vancouver figures into perspective: if these two markets were excluded from national sales numbers, the average selling price of a residential property only increased by 3.3 percent. Isn’t that a sobering thought to start your weekend?
Have a comment or suggestion? I’d love to hear from you! Contact me at angela@smallcappower.com or on Twitter: @aharmantas.
