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Oreninc Index: July 16, 2018

ORENINC INDEX continues to shrink

 

ORENINC INDEX - Monday, July 16th 2018
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Last week index score: 21.54 (updated)

This week: 20.33

 

The Oreninc Index continued to shrink in the week ending July 13th, 2018 to 20.33 from an updated 21.54 a week ago as the average deal size fell below C$1.0 million.

Metals prices continued to reel and contract as a trade war between the US and China started to bite. All news seems to be bad for gold in particular as its price continues to weaken rather than strengthen as one would expect during turbulent times. Gold appears powerless in the face of the strength of the US dollar, whichas represented by the US Dollar Indexthat continues at close to year highs. In fact, gold has fallen in four of the five most recent weeks and closed the week at a new 12-month low despite the return of negative real interest rates in the US.

US president Donald Trump continued to ruffle feathers in the international community by stating that Europe should contribute more to pay for its defence, stating that the country’s partners in NATO (North Atlantic Treaty Organization) should increase their defence budgets to 4% of GDP from their current 2%, that most European do not meet. And during a state visit to the UK, he commented that Prime Minister Theresa May has mishandled the country’s negotiations to exit the European Union.

On to the money: total fund raises announced continued to fall to now C$14.0 million, an 18-week low, which included no brokered financings and no bought deal financings. The average offer size fell to a miserly C$0.7 million, a 28-week low, whilst the number of financings grew to 20, a three-week high.

Gold continued its recent fall to close the week down at US$1,244/oz from US$1,255/oz a week ago after recovering from a mid-week low of US$1,241/oz. Gold is now down 4.49% this year. The US dollar index increased to 94.68 from 93.96 a week ago. The van Eck managed GDXJ lost ground to close down at US$32.53 from US$33.50 a week ago. The index is down 4.69% so far in 2018. The US Global Go Gold ETF also lost ground to close down at US$12.76 from US$12.99 a week ago. It is now down 1.89% so far in 2018. The HUI Arca Gold BUGS Index closed down at 173.52 from 179.22 last week. The sell-off in the SPDR GLD ETF continued with its inventory closing down at 795.19 tonnes from 802.24 tonnes a week ago.

In other commodities, silver closed down at US$15.82/oz from US$16.05/oz a week ago. Copper’s fall continues as the US and China lock horns in a trade war, to close at US$2.77/lb from US$2.82/lb last week. Oil continued to ease to close down at US$71.01 a barrel from US$73.80 a barrel a week ago.

The Dow Jones Industrial Average continued its winning streak to close up at 25,019 from 24,456 last week. Canada’s S&P/TSX Composite Index also had a winning week to close up at 16,561 from 16,371 the previous week. The S&P/TSX Venture Composite Index also closed down at 725.24 from 740.10 last week.

 Summary:

·         Number of financings grew to 20, a three-week high.

·         No brokered financings were announced this week, for the fourth week in a row.

·         No bought-deal financing was announced this week, for the fourth week in a row.

·         Total dollars decreased to C$14.0m, an 18-week low.

·         Average offer size dropped to C$0.7m, a 28-week low.

 

Financing Highlight

Triumph Gold (TSXV:TIG)

Opened and completed a C$ 5.12 million private placement

·         14.6 million units @ C$0.

·         Each unit consists of one share and half a warrant exercisable @ C$0.55 for two years

·         The investment was made primarily by institutional investors including a private Hong Kong fund for C$2.5 million and three existing shareholders including Goldcorp that exercised its right to top up to a 19.9% ownership, and Palisade Global Investments.

·         The proceeds will be used for exploration at the Freegold Mountain project where Triumph has two diamond drills working on an 18,000m drilling program.

 

Major Financing Openings

·         Triumph Gold (TSXV:TIG) opened a C$ 5.12 million offering on a best efforts basis. Each unit includes half a warrant that expires in two years.

·         Labrador Gold (TSXV:LAB) opened a C$ 2.55 million offering on a best efforts basis. Each unit includes half a warrant that expires in two years.

 

Major Financing Closings

·         Triumph Gold (TSXV:TIG) closed a C$ 5.12 million offering on a best efforts basis. Each unit included half a warrant that expires in two years.

·         Hannan Metals (TSXV:HAN) closed a C$ 1.11 million offering on a best efforts basis. Each unit included a warrant that expires in three years.

 

Company News

NuLegacy Gold (TSXV:NUG) said certain directors and officers sold 2.5 million shares from their personal holdings @ C$0.20. The proceeds will be used to purchase 2.5 million units of its C$3.0 million non-brokered private placement financing of 15 million units @ C$0.20.

 

 

 

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