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Oreninc Index: June 4, 2018

ORENINC INDEX increases although brokers disappear

ORENINC INDEX - Monday, June 4th 2018

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Last week index score: 30.90

This week: 45.96

 

Oreninc Podcast Series Ep 05 with David Erfle, Junior Miner Junky

Oreninc Podcast Series Ep 24 with Mickey Fulp, The Mercenary Geologist

 

 

Prospero Silver (TSXV:PSL) started drilling the Buenavista project in Durango, Mexico.

Zinc One Resources (TSXV:Z) announced additional results from its drill program at the southern area of the Mina Grande Sur zone, part of the Bongará zinc mine in north-central Peru.

 

The Oreninc Index increased in the week ending June 1st, 2018 to 45.96 from 30.90 a week ago as financings increased despite the absence of broker action.

Topsy-turvy times continue. Gold spent the week flirting with the US$1,300/oz level, before finally succumbing at the end of the week as the US added a higher-than-expected number of jobs in May. The US Labor Department reported that 223,000 jobs were added, over the 188,000 figure that were expecting.

Consciously or not, US president Donald Trump seems to be balancing the fear trade. As the week ended, he went ahead and implemented tariffs of 25% on steel and 10% on aluminium against production from the EU, Canada and Mexico, prompting fears of a trade war, whilst softening his trade tone against China. And then taking risk off the table by stating the talks are on again with his North Korean counterpart Kim Jong Un.

On to the money: total fund raises announced increased to C$92.7 million, a three-week high, which included no brokered financings and no bought deal financings. The average offer size fell to C$2.6 million, a four-week low whilst the number of financings increased to 35, a seven-week high.

Gold closed at US$1,293/oz down from US$1,302/oz a week ago. Gold is now down 0.724% this year. The US dollar index closed down a tad at 94.15 from 94.25 a week ago. The van Eck managed GDXJ also lost a tad to close down at US$32.80 from US$32.89 last week. The index is down 3.90% so far in 2018. The US Global Go Gold ETF fell as well to close at US$12.71 from US$12.93 a week ago. It is now down 2.31% so far in 2018. The HUI Arca Gold BUGS Index closed down at 179.15 from 180.20 last week. The SPDR GLD ETF continued to sell off and closed its inventory at 836.42 tonnes from 848.50 tonnes a week ago.

 

In other commodities, silver closed down at US$16.41/oz from US$16.51/oz a week ago. Copper continued to gain and closed up at US$3.09/lb from US$3.07/lb last week. Oil continued to lose ground and saw another losing week to close down at US$65.81 a barrel from US$67.88 a barrel a week ago.

The Dow Jones Industrial Average saw sold off to close down at 24,635 from 24,753 last week. Canada’s S&P/TSX Composite Index continued to its losses to close down at 16,043 from 16,075 the previous week. The S&P/TSX Venture Composite Index also closed down again at 765.94 from 775.41 last week.

 

Summary:

·       Number of financings grew to 35, a seven-week high.

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

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

·       Total dollars rose to C$92.7m, a three-week high.

·       Average offer size decreased to C$2.6m, a four-week low.

 

 

Financing Highlights

 

Orca Gold (TSXV:ORG) opened a C$ 21.85 million offering on a strategic deal basis with Resolute Mining (ASX:RSG).

·       32.4 million shares @ C$0.675 for gross proceeds of C$22.0 million. Resolute will own about 15% of Orca.

·       Each unit includes a warrant that expires in two months.

·       Resolute to receive a special warrant pursuant to acquire an additional 1.9 million shares @ C$0.675 following the issuance to Kinross Gold of 10.6 million shares with the completion of the acquisition from Kinross of two exploration companies in Côte d’Ivoire.

·       Net proceeds will be used to fund a feasibility study on the Block 14 gold project in Sudan.

·       The deal is expected to close on or about July 16th.

 

 

 Major Financing Openings:

 

·       Orca Gold (TSXV:ORG) opened a C$ 21.85 million offering on a strategic deal basis. Each unit includes a warrant that expires in two months. The deal is expected to close on or about July 16th.

·       Alphamin Resources (TSXV:AFM) opened a C$ 19.2 million offering on a best efforts basis. The deal is expected to close on or about June 18th.

·       White Gold (TSXV:WGO) opened a C$ 10 million offering on a best efforts basis.    

·       Royal Nickel (TSX:RNX) opened a C$ 6 million offering on a best efforts basis.  Each unit includes a warrant that expires in 30 months. The deal is expected to close on or about June 14th.

 

Major Financing Closings:

·       Rio2 (TSXV:RIO) closed a C$ 10 million offering underwritten by a syndicate led by Clarus Securities on a bought deal basis

·       Minaurum Gold (TSXV:MGG) closed a C$ 7.08 million offering on a best efforts basis. Each unit includes half a warrant that expires in 18 months.

·       Core Gold (TSXV:CGLD) closed a C$ 3.31 million offering on a best efforts basis. Each unit included half a warrant that expires in 24 months.

·       Plateau Energy Metals (TSXV:PLU) closed a C$ 2.5 million offering on a best efforts basis.

 

Company News

Prospero Silver (TSXV:PSL) started drilling the Buenavista project in Durango, Mexico.

·       The 3,000m program will test at least four principal drill-ready zones.

·       This is the fourth project to be drilled under the terms of a second round of strategic investment from Fortuna Silver Mines. Drilling is preliminary in nature to confirm below surface structures and determine where in the vertical epithermal column an ore zone might lie.

·       Prospero also completed the second and final tranche of a private placement financing @ C$0.09 raising aggregate gross proceeds of C$1.0 million that will be used for its generative exploration programs in Mexico.

 

Analysis

Buenavista hosts precious metal-bearing, structurally controlled vein systems centered on a rhyolite dome complex. With Fresnillo plc’s recently commissioned San Julian mine 20km to the northwest the target is in the right neighbourhood. Indeed, previous drilling between 1996 and 2008 included intersections such as 2.37m @ 400g/t Ag & 0.27g/t Au. The antecedents for Buenavista are good but so there will be a lot of interest in the drilling results of the current program.

 

Zinc One Resources (TSXV:Z) announced additional results from its drill program at the southern area of the Mina Grande Sur zone, part of the Bongará zinc mine in north-central Peru.

·       With the drill program now completed at Mina Grande Sur, to date, results from 50 drill holes for 803.6m have been reported.

·       Drilling will move to Mina Grande Centro and Mina Grande Norte.

·       Highlights included 11.2m @ 24.7% Zn

·       A resource estimate is expected to be released in 3Q18.

 

Analysis

The latest results continue to show that Bongará is an exceptional zinc-rich deposit, and the drilling results bode well for the upcoming resource calculation for the entire project. The company will be looking to repeat the positive results at the Mina Grande Centro and Mina Grande Norte zones.

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