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Oreninc Index: February 18, 2019

ORENINC INDEX doubles as gold continues above US$1,300/oz

ORENINC INDEX - Monday, February 18th 2019

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Last week index score: 32.13

This week: 43.47

 

NuLegacy Gold (TSXV:NUG) completed the fall 2018/winter drilling program on its Red Hill property in the Cortez gold trend of north central Nevada, USA on January 15th with several widely-spaced outlier holes.

Nexus Gold (TSXV:NXS) signed a definitive agreement to acquire the McKenzie gold project in the Red Lake region of Northwestern Ontario, Canada. It also announced a C$2.0 million private placement.

Prospero Silver (TSXV:PSL) received TSX Venture Exchange acceptance of its option agreement with Fortuna Silver Mines, pursuant to which Fortuna can earn up to a 70% interest in the Pachuca South East Property in Hidalgo, Mexico.

 

The Oreninc Index continued to increase in the week ending February 15th, 2019 to 43.47 from 32.13 a week ago as  

Gold continued to hold firm and even show strength last week despite strong performance from the US dollar, the US stock markets and oil. The yellow metal ended the week on a high note following US Labor Department data on Thursday showed weekly jobless claims rose by 4,000 to a seasonally adjusted 239,000, higher than expected.

Financing activity for the junior sector picked up and included Revival Gold announcing the first brokered financing by any junior of 2019.

US President Donald Trump dominated headlines as he declared a national emergency on the border with Mexico to access billions of dollars to build a wall having failed to get the funds he was seeking from Congress. His announcement followed Congressional Republican and Democrat negotiators agreeing to allocate US$1.375 billion to increased barriers along the frontier with Mexico, less than the $5.7 billion the president sought. His action has resulted in debate over the separation of powers outlined in the Constitution with Democrats calling the measure unconstitutional.

Meanwhile, trade talks with China are reported to be making progress with negotiations to continue during the coming week with the aim of reaching an agreement before March 2nd when President Trump said he would raise tariffs on US$200 billion worth of Chinese goods to 25% from 10%.

Oil prices look set to continue to increase after OPEC said that production from its members fell by nearly 800,00 barrels a day in January to 30.8 million bbl/day, with Saudi Arabia stating that it would cut output by at least 500,000 bbl/day more than originally planned to 9.8 million bbl/day.

On to the money: total fund raises announced increased to C$59.0 million, an eight-week high, that included the first brokered financing of 2019 for C$5.0 million, a four-week high, and no bought-deal financings. The average offer size decreased to C$1.7 million, a four-week high, whilst the number of financings increased to 35, an eight-week high.

Gold continued above the US$1,300/oz mark despite a rising US dollar, to close the week up at US$1,322 from US$1,316/oz a week ago. The yellow metal is up 3.12% this year. The US dollar index continued to show strength as it closed up at 96.90 from 96.63 last week. The van Eck managed GDXJ put in growth as it closed up at US$32.95 from US$32.33. The index is up 9.03% so far in 2019. The US Global Go Gold ETF also closed up at US$12.51 from US$12.50 a week ago. It is up 9.64% so far in 2019. The HUI Arca Gold BUGS Index also closed down at 167.91 from 168.87 last week. The SPDR GLD ETF continued to see inventory sell off as it closed down at 793.03 tonnes from 802.12 tonnes a week ago.

In other commodities, silver slipped a few cents to close down at US$15.79 from US$15.82/oz a week ago. Copper also shed a few cents to close down at US$2.79/lb from US$2.81/lb a week ago. Oil added a couple of dollars as WTI closed up at US%55.59 a barrel from US$52.72 a barrel a week ago.

The Dow Jones Industrial Average continued to grow as it closed up at 25,883 from 25,106 last week. Canada’s S&P/TSX Composite Index also continued to grow as it closed up at 15,838 from 15,633 the previous week. The S&P/TSX Venture Composite Index closed up at 615.92 from 611.94 last week.

Summary

·       Number of financings increased to 35, an eight-week high.

·       The first brokered financing of 2019 was announced this week for $5.0m, a four-week high.

·       No bought-deal financings were announced this week, a one-week low.

·       Total dollars heightened to $59.0m, an eight-week high.

·       Average offer size raised to $1.7m, a four-week high.

 

                                                          

Financing Highlights

Euromax Resources (TSX:EOX) announced a C$13.3 million offering

·       A non-brokered private placement with shareholder Galena Asset Management, an affiliate of Trafigura.

·       122.5 million units @ C$0.075 for gross proceeds of C$9.2 million.

·       Each unit comprises one share and a warrant exercisable @ C$0.23 for two years.

·       Concurrent financing on the same terms of up to 55.0 million for gross proceeds of up to C$4.1 million.

·       Proceeds will be used for the development of the Ilovica-Shtuka copper-gold project in Macedonia.

 

 

Major Financing Openings

·       Euromax Resources (TSXV:EOX) opened a C$13.3 million offering on a best efforts basis. Each unit includes a warrant that expires in two years.

·       Amex Exploration (TSXV:AMX) opened a C$5.02 million offering on a best efforts basis. Each unit includes half a warrant that expires in a year-and-a-half.

·       Revival Gold (TSXV:RVG) opened a C$5.0 million offering underwritten by a syndicate led by Paradigm Capital on a best efforts basis.

·       Sandy Lake Gold (TSXV:SLAU) opened a C$3.6 million offering on a best efforts basis. Each unit includes half a warrant that expires in two years.

Major Financing Closings

·       Reunion Gold (TSXV:RGD) closed a C$13.09 million offering on a strategic deal basis with Barrick Gold (TSX:ABX).

·       Pacific Rim Cobalt (CSE:BOLT) closed a C$1.26 million offering on a best efforts basis. Each unit included a warrant that expires in one  year.

 

Company News

NuLegacy Gold (TSXV:NUG) completed the fall 2018/winter drilling program on its Red Hill property in the Cortez gold trend of north central Nevada, USA on January 15th with several widely-spaced outlier holes.

·       Numerous anomalous intercepts were encountered with the highlight being hole WS18-01, drilled 1,200m west of the Serena zone that returned 3.1m @ 0.39g/t gold. More importantly, upon re-interpretation of the geophysics, it evidences that the structural components critical to hosting a major part of the Red Hill’s Carlin-style gold systems has been hidden under the post-mineralisation basalt flows well to the west of the Serena-Iceberg complex.

·       Follow up drilling will begin in the spring with an initial 8,700m in 20 holes at the Rift Anticline (four holes), West Avocado (three holes), East Avocado (one hole), Serena extension (four holes), East Vio extension (two holes) and West Vio (six holes).

Analysis

The narrow interval with modest grade confirms that a Carlin-style gold system continues to the west and has a large footprint. It indicates the possibly that a major portion of the Red Hill’s Carlin-gold systems are covered by post-mineralisation basalt flows. The 2019 drilling program will test this theory, amongst other things, and its results could provide an important catalyst for the company.

 

Nexus Gold (TSXV:NXS) signed a definitive agreement to acquire the McKenzie gold project in the Red Lake region of Northwestern Ontario, Canada. It also announced a C$2.0 million private placement.

·       Nexus will issue 4.0 million shares and make a one-time cash payment of C$150,000.

·       The McKenzie project is a 1,348.5-hectare property in the heart of the Red Lake gold camp that hosts nine documented historical gold occurrences with limited exploration.

·       2017 grab samples included 331g/t and 313g/t gold.

·       600m strike length established through prior drilling in 2005.

·       Non-brokered private placement of up to 17.4 million units @ $0.115 for gross proceeds of up to $2.0 million.

·       Each unit will consist of one share and a warrant exercisable @ $0.18 for two years.

·       Proceeds will be used for ongoing drilling at the Bouboulou-Rakounga projects and exploration at Dakouli 2 in Burkina Faso, and for summer work programs at New Pilot in BC and McKenzie.

Analysis

This acquisition adds a Canadian-based project with high-grade potential in a recognised district to the company’s portfolio, providing addition diversification in a stable jurisdiction.

 

Prospero Silver (TSXV:PSL) received TSX Venture Exchange acceptance of its option agreement with Fortuna Silver Mines, pursuant to which Fortuna can earn up to a 70% interest in the Pachuca South East Property in Hidalgo, Mexico.

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