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Oreninc Index: October 15, 2018

Oreninc Index: October 15, 2018

ORENINC INDEX recedes as financings evaporate 

ORENINC INDEX - Monday, October 15th 2018

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Last week index score: 19.06

This week: 16.72

 

Zinc One Resources (TSXV:Z) announced drill results from 16 of the remaining 35 holes in the Mina Grande Centro zone from its Bongará zinc mine project in Peru.

Avrupa Minerals (TSXV:AVU) announced a drilling programme to advance the Sesmarias Cu-Zn discovery on its Alvalade property in Portugal.

The Oreninc Index decreased in the week ending October 12th, 2018 to 16.72 from 19.06 a week ago with the market posting multi-month lows on key figures as financings evaporated as Canada enjoyed its Thanksgiving holiday.

Trade war. The tit-for-tat exchange of tariffs between the US and China looks to have stepped up into a full-blown trade war according to a statement released by the Chinese Commerce Minister, Zhong Shan, reported Bloomberg. This could prove to be the catalyst to ignite gold.

Market commentators have been calling a bottom in gold for many weeks and expounding on the confluence of factors that should result in a meaningful breakout for gold. The past week could have seen the first step in that breakout as a significant fall in equity markets saw gold jump well above the US$1,200/oz mark and maintain most of those gains as the week ended. Both the S&P 500 and Dow Jones Industrial Average saw significant falls of around 3%, whilst bond yields grew to their highest levels in seven years. Is capital beginning to move back towards old school havens?

On to the money: total fund raises announced decreased to C$10.1 million, a 196-week low, which included no brokered financings and no bought-deal financings. The average offer size fell to C$0.8 million, a 41-week low, whilst the number of financings decreased to 13, a nine-week low.

Gold hit a ten-week high as it closed up at US$1,217/oz from US$1,203/oz a week ago after hitting a mid-week high of 1,224/oz. It is now down 6.58% this year. The US dollar index pulled back to 95.22 from 95.62 last week. The van Eck managed GDXJ took a step forward as it closed up at US$29.30 from US$27.62 a week ago. The index is down 14.15% so far in 2018. The US Global Go Gold ETF also took a step forward as it closed up at US$11.02 from US$10.54 a week ago. It is now down 15.30% so far in 2018. The HUI Arca Gold BUGS Index closed up at 153.30 from 143.43 last week. The SPDR GLD ETF finally stopped shedding ounces and began accumulating with its inventory increasing to 744.64 tonnes from 730.17 tonnes a week ago.

In other commodities, silver shed a few cents as it closed down at US$14.58/oz from US$14.63/oz a week ago. Copper added a few cents to close up at US$2.80/lb from US$2.76/lb last week. Oil took a haircut as WTI closed down at US$71.34 a barrel from US$74.34 a barrel a week ago.

The Dow Jones Industrial Average took a big dump as it closed down at 25,339 from 26,447 last week. Canada’s S&P/TSX Composite Index followed suit as it closed down at 15,414 from 15,946 the previous week. The S&P/TSX Venture Composite Index also pulled back as it closed down at 698.60 from 705.69 last week.

 

Summary

  • ·      Number of financings decreased to 13, a nine-week low.
  • ·      No brokered financings were announced this week.
  • ·      No bought-deal financings were announced this week.
  • ·      Total dollars decreased to C$10.1m, a 196-week low.
  • ·      Average offer size fell to C$784,443, a 41-week low.

 

Financing Highlights

Calibre Mining (TSXV:CXB) announced a non-brokered private placement financing of up to 11.4 million units @ C$0.44 post-consolidation to raise gross proceeds of up to C$5.0 million.

  • ·      Each unit consists of one post-consolidation share and a warrant exercisable @ C$0.95 for five years.
  • ·      Sprott Capital Partners is acting as finders in the private placement.
  • ·      Proceeds will be used for exploration, project generative activities, loan repayment, and general working capital.
  • ·      Closing is expected the week of October 29th.

·      Prior to closing, Calibre will undertake a 10:1 share consolidation. Upon completion of the financing it will have 42.8 million shares issued and outstanding and C$4.7 million in working capital.

 

Major Financing Openings

  • ·      Calibre Mining (TSXV:CXB) opened a C$ 5 million offering on a best efforts basis. Each unit includes a warrant that expires in five years.
  • ·      Cypress Development (TSXV:CYP) opened a C$ 1.1 million offering on a best efforts basis. Each unit includes a warrant that expires in three years.
  • ·      Champion Bear Resources (TSXV:CBA) opened a C$ 0.92 million offering on a best efforts basis.    
  • ·      Oroco Resource (TSXV:OCO) opened a C$ 0.6 million offering on a best efforts basis. Each unit includes a warrant that expires in a year-and-a half.

 

Major Financing Closings

  • ·      Noram Ventures (TSXV:NRM) closed a C$ 1.26 million offering on a best efforts basis. Each unit included a warrant that expires in two years.
  • ·      Prairie Provident Resources (TSX:PPR) closed a C$ 1.1 million offering underwritten by a syndicate led by Mackie Research Capital on a bought deal basis.    
  • ·      AEX Gold (TSXV:AEX) closed a C$ 1 million offering on a best efforts basis.
  • ·      Empire Metals (TSXV:EP) closed a C$ 0.8 million offering on a best efforts basis.

 

Company News

Zinc One Resources (TSXV:Z) announced drill results from 16 of the remaining 35 holes in the Mina Grande Centro zone from its Bongará zinc mine project in Peru.

  • ·      The company also released eight of 16 holes drilled in the Mina Grande Norte zone.
  • ·      At Mina Grande Centro, holes MGC18037 to MGC18046 were condemnation holes. The other drill holes were to the east of the mined area with highlights including 21.7m @ 22.7% Zn in hole MGC18036.
  • ·      At Mina Grande Norte, highlights included 37.0m @ 31.6% Zn in hole MGN18006.

 

Analysis

The Mina Grande Norte results were very high grade and so it can be expected that the area will make an important contribution to the overall resource estimate that the company plans to complete later in the fourth quarter.

 

Avrupa Minerals (TSXV:AVU) announced a drilling programme to advance the Sesmarias Cu-Zn discovery on its Alvalade property in Portugal.

  • ·      Avrupa continues to work on an option agreement with a large international copper producer for three of its projects, including Alvalade, but due to delays and uncertainty of completion of that transaction, the board decided to advance the project to ensure its license continues in good standing.
  • ·      Avrupa made a blind discovery of Cu-Zn -rich massive sulphide mineralization at the Sesmarias site about four years ago, but follow-up has been sparse due to continuing delays caused by optionee partners.
  • ·      Avrupa plans a 2,500 to 3,000m drill programme to expand known mineralized areas and determine the potential size of the mineralization found to date.
  • ·      Avrupa also said that upon the completion of recent drilling at the Alvito IOCG project in Portugal, it would retain the project as the partner declined to earn its potential interest.

 

Analysis

Resuming drilling on Alvalade will provide the company with the opportunity to show additional potential at the project with the aim of securing a partner to advance its exploration, whilst maintaining the work commitment requirement to maintain the concession in good standing.

 

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