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Oreninc Index: July 2, 2018

 

ORENINC INDEX all but disappears under lethargy overhang

ORENINC INDEX - Monday, July 1st 2018

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Last week index score: 25.93(updated)

This week: 15.50

 

NuLegacy Gold (TSXV:NUG) reported assay results of the first hole of its seven-hole 10,000 ft. phase-1 2018 drilling program.

 

The Oreninc Index virtually evaporated in the week ending June 29th, 2018 to 15.50 from an updated 25.93 a week ago as lethargy set in over mining following the recent fall in metals prices.

Trade balances and tariffs continue to dominate financial headlines as Canada announced US$16 billion in reciprocal tariffs on US imports such as steel, aluminium and other products from July 1st in retaliation of tariffs implemented by US president Donald Trump. With several countries now raising tariffs, the question becomes who will blink first? At a corporate level, that honour could go to US motorcycle manufacturer Harley-Davidson that will look to establish manufacturing facilities outside the US to avoid the average US$2,200 tariff per bike to export into the EU.

Recent weeks have seen the US dollar continue to strengthen on the back of robust US economic data, but it lost some shine after rumours that the US may pull out of the World Trade Organization. Despite that, metal markets continued to be soft in the face of tariff implementation, with copper seeing a particular easing, with prices falling to a six-month low, compounded by weak Chinese economic data.

Despite OPEC agreeing to increase output at the Vienna, Austria meeting recently, a significant decline in crude stocks saw prices continue to increase.

On to the money: total fund raises announced plunged to C$24.1 million, a 16-week low, which included no brokered financings and no bought deal financings. The average offer size increased to C$1.8 million, a two-week high, whilst the number of financings halved to 13, a 16-week low.

Gold continues to weaken and closed the week down at US$1,252/oz from US$1,270/oz a week ago, recovering from a week low of US$1,248/oz. Gold is now down 3.85% this year. The US dollar index fell slightly to 94.47 from 94.52 a week ago, pulling back from a mid-week high of 95.31. The van Eck managed GDXJ lost a little ground to close down at US$32.70 from US$32.78 a week ago. The index is down 4.19% so far in 2018. The US Global Go Gold ETF also lost a little ground to close down at US$12.72 from US$12.80 a week ago. It is now down 2.21% so far in 2018. The HUI Arca Gold BUGS Index closed down at 174.52 from 176.93 last week. The sell-off in the SPDR GLD ETF continued with its inventory closing down at 819.04 tonnes from 824.63 tonnes a week ago.

In other commodities, silver closed down at US$16.12/oz from US$16.46/oz a week ago. Copper’s fell below the US$3.00/lb mark to close at US$2.96/lb from US$3.05/lb last week. Oil jumped to close up at US$74.15 a barrel from US$68.58 a barrel a week ago.

The Dow Jones Industrial Average had another losing week to close at 24,271 from 24,580 last week. Canada’s S&P/TSX Composite Index also had a losing week to close down at 16,277 from 16,450 the previous week. The S&P/TSX Venture Composite Index also closed down at 739.96 from 754.24 last week.

 

Summary:

·       Number of financings plunged to 13, a 16-week low.

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

·       No bought-deal financing was announced this week, a one-week low.

·       Total dollars fell to C$24.1m, a 16-week low.

·       Average offer size increased to C$1.8m, a two-week high.

 

 

Financing Highlights

 

Adventus Zinc (TSXV:ADZN) announced a fully subscribed non-brokered private placement for C$9.2 million.

·       10.2 million shares @ C$0.90

·       Wheaton Precious Metals (TSX:WPM) is the lead order and will hold 9.99% of Adventus upon Closing.

·       Net proceeds will be used to fund exploration and development at the Curipamba VMS project in Ecuador.

 

 

Major Financing Openings

 

·       Adventus Zinc (TSXV:ADZN) opened a C$ 9.18 million offering on a strategic deal basis. The deal is expected to close on or about July 17th.

·       Treasury Metals (TSX:TML) opened a C$ 5 million offering on a best efforts basis. Each unit includes a warrant that expires in five years.

·       Anaconda Mining (TSX:ANX) opened a C$ 4.5 million offering on a best efforts basis. Each unit includes half a warrant that expires in two years.

·       Nicola Mining (TSXV:NIM) opened a C$ 1.5 million offering on a best efforts basis. Each unit includes half a warrant that expires in two years.

 

Major Financing Closings

·       Kintavar Exploration (TSXV:KTR) closed a C$ 11.21 million offering on a best efforts basis. Each unit included half a warrant that expires in two years.

·       Zinc One Resources (TSXV:Z) closed a C$ 5.42 million offering on a best efforts basis. Each unit included half a warrant that expires in three years.

·       Power Metals (TSXV:PWM) closed a C$ 2 million offering underwritten by a syndicate led by Eight Capital on a best efforts basis. Each unit included half a warrant that expires in two years.

 

Company News

NuLegacy Gold (TSXV:NUG) reported assay results of the first hole of its seven-hole 10,000 ft. phase-1 2018 drilling program.

·       SR18-01C returned assays of 51.1m @ 1.47g/t Au to expand the Serena zone.

·       The 2018 exploration program is focused on identifying higher-grade intersections of the low-angle feeder structures. Two holes are targeted as extensions of the Avocado zone and five as extensions of the Serena and North zones.

·       Phase 2 (10,000 ft.)  drilling is planned to commence as soon as all Phase-1 results are fully integrated into the drill targeting model.

 

Analysis

NuLegacy continues to step out and expand the mineralisation footprint at Red Hill, which bodes well for the possibility of strong news flow as drilling continues and adding greater scale to the project.

 

 

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