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Oreninc Index: June 3, 2019

 

ORENINC INDEX continues to fall as market remains in apathy

ORENINC INDEX - Monday, June 3rd 2019

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Last week index score: 25.28

This week: 20.38

The Oreninc Index fell again in the week ending May 31st, 2019 to 20.38 from 25.28 a week ago as market remain in apathy.

Trade conflict continues to dominate commodities news with the US and China looking increasingly unlikely to resolve their trade differences in the near-term. China is set to take strategic trade retaliation measures targeting US agricultural exports such as soybeans from states in Trump’s main support base. It is also looking to restrict exports of rare earth minerals, a market it dominates with about 80% of world supply, to the US, which would have a particular impact on technology and defence companies.

The US trade tantrum continues as US president Donald Trump said he will impose a 5% tariff on Mexican goods from June 10th if the country does not stop the flow of illegal immigrants, with a possible increase to 25% by October.

As trade tensions increase and spread, yields on government bond around the world are falling, with the US 10-year treasury falling to 2.23%. Oil is also falling for similar reasons. And the Dow Jones sunk to its lowest point for months.

On to the money: total fund raises announced increased to C$20.4 million from C$19.4 million, a two-week high, that included no brokered financings and no bought-deal financings. The average offer size increased to C$1.1 million, a two-week high, whilst the number of financings stayed at 19.

Gold climbed strongly as the week closed and hauled itself back about the US$1,300/oz level as it closed up at US$1,305/oz from US$1,284/oz a week ago. The yellow metal is up 1.80% so far this year. The US dollar index nudged up to close at 97.75 from 97.61 last week. The Van Eck managed GDXJ gained more than a dollar as it closed up at US$29.53 from US$28.19 a week ago. The index is now down 2.28% so far in 2019. The US Global Go Gold ETF also saw a strong rise as it closed up at US$12.18 from US$11.73 a week ago. It is up 6.79% so far in 2019. The HUI Arca Gold BUGS Index closed up as well at 157.08 from 149.07 last week. The SPDR GLD ETF continued to build inventory as it closed up at 743.21 tonnes from 738.81 tonnes a week ago.

In other commodities, silver lagged gold and only added a couple of cents as it closed up at US$14.59/oz from US$14.57/oz a week ago. Copper continued to shed cents as it closed down at US$2.64/lb from US$2.69/lb a week ago. Oil’s sell-off continued as WTI closed down at US$53.50 a barrel from US$58.63 a barrel a week ago.

The Dow Jones Industrial Average continued its descent as it closed down at 24,815 from 25,585 a week ago. Canada’s S&P/TSX Composite Index also continued its descent as it closed down at 16,037 from 16,230 the previous week. The S&P/TSX Venture Composite Index also closed down at 601.55 from 607.68 last week.

 

Summary

·       Number of financings stayed at 19.

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

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

·       Total dollars up to $20.4m, a two-week high.

·       Average offer increased to $1.1m, at two-week high.

                                                          

Financing Highlights

African Gold Group (TSXV: AGG) announced a C$5.0 million non-brokered private placement

·       23.8 million units @ C$0.21 per unit

·       Each unit will consist of one share and a warrant exercisable @ C$0.30 for two years.

·       The proceeds will be used to continue to develop the Kobada project in Mali.

Major Financing Openings

·       African Gold Group (TSXV:AGG) opened a C$5.0 million offering on a best efforts basis. Each unit includes a warrant that expires in two years. The deal is expected to close on or about June 21st.

·       Sandspring Resources (TSXV:SSP) opened a C$3.0 million offering on a best efforts basis. Each unit includes a warrant that expires in five years.

·       Libero Copper (TSXV:V:LBC) opened a C$2.7 million offering on a best efforts basis. Each unit includes a warrant that expires in two years.

·       Tudor Gold (TSXV:TUD) opened a C$2.0 million offering on a best efforts basis. Each unit includes a warrant that expires in a year.

Major Financing Closings

·       GT Gold (TSXV:GTT) closed a C$17.6 million offering on a strategic deal basis.

·       Royal Road Minerals (TSXV:RYR) closed a C$8.0 million offering underwritten by a syndicate led by Pollitt & Co on a strategic deal basis.    

·       Nexus Gold (TSXV:NXS) closed a C$2.04 million offering on a best efforts basis

 

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