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Oreninc Index: May 7, 2018

ORENINC INDEX remains flat leading into the summer

 

ORENINC INDEX - Monday, May 7th 2018

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Last week index score: 37.75

This week: 44.92

 

Zinc One Resources (TSXV:Z) extended the recently discovered high-grade zinc deposit at the Mina Chica zone of the Bongará zinc project in north-central Peru.

Avrupa Minerals (TSXV:AVU) will begin drilling at its Alvito project in southern Portugal.

NuLegacy Gold (TSXV:NUG) reported the retirement of founding partner Dr Roger Steininger as chief geoscience officer.

 

The Oreninc Index  remains flat during the week ending May 4th, 2018.

One of the quieter and less volatile weeks experienced for a while that saw the gold price eroding back towards the US$1,300/oz level. Mid-week, the yellow metal had given up about 2.5% since mid-April in the face of downward pressure from a belief that the US Federal Reserve would again increase interest rates. However, the Fed did not raise rates allowing gold to bounce-back slightly at the end of the week.

On to the money: total fund raises announced fell to C$60.9 million, a two-week low, which included three brokered financings for C$18.0 million, a two-week high, and two bought deal financings for C$10.0 million, a three-week low. The average offer size halved to C$2.1 million, a six-week low as the number of financings increased to 29, a three-week high.

 

Another negative week for gold as it closed down at US$1,314/oz from US$1,324/oz a week with a mid-week low of US$1,303/oz. Gold is now up 0.90% this year. Meanwhile, the US dollar index continued to rise and closed up at 92.56 from 91.54 a week ago. The van Eck managed GDXJ rebounded strongly at the end of the week to close up at US$33.55 from US$33.03 last week. The index is down 1.70% so far in 2018. The US Global Go Gold ETF also saw growth to close up at US$13.11 from US$12.99 a week ago. It is up 0.77% so far in 2018. The HUI Arca Gold BUGS Index closed down at 181.39 from 182.04 last week. The SPDR GLD ETF saw sales for the first time in a few weeks to close its inventory at 864.13 tonnes from 872.2 tonnes a week ago.

 

In other commodities, silver made a miniscule gain to close up at US$17.53/oz from US$16.51/oz a week ago. Likewise, copper made a few cents to close up at US$3.08/lb from US$3.06/lb last week. Oil continued to post gains to close up at US$69.72 a barrel from US$68.10 a barrel a week ago.

The Dow Jones Industrial Average saw a rare losing week to close down at 24,262 from 24,311 last week. Canada’s S&P/TSX Composite Index saw growth to close up at 15,729 from 15,668 the previous week. The S&P/TSX Venture Composite Index closed down at 772.24 from 783.76 last week.

Summary:

·       Number of financings increased to 29, a three-week high.

·       Three brokered financings were announced this week for C$18.0m, a two-week high.

·       Two bought-deal financings were announced this week for C$13.0m, a three-week low.

·       Total dollars dropped to C$60.9m, a two-week low.

·       Average offer size halved to C$2.1m, a six-week low.

 

 

Financing Highlights

 

Pure Gold Mining (TSXV:PGM) announced a C$17.4 million financing, including C$10 million bought deal private placement and concurrent C$7.4 million non-brokered private placement.

·       Sprott Capital Partners lead underwriter with a syndicate including Macquarie Capital Markets Canada, Raymond James, Haywood Securities, Velocity Trade Capital, Canaccord Genuity and Echelon Wealth Partners to purchase on a bought-deal basis 11.3 million units @ C$0.62 for gross proceeds of C$7.0 million and 4.0 million flow-through shares @ C$0.75 for gross C$3.0 million.

·       The bought deal units were subsequently increased to 16.1 million for C$13.0 million.

·       Anglogold Ashanti concurrently agreed to purchase a further 12.0 million units @ C$0.62 for gross proceeds of C$7.4 million on a non-brokered private placement basis, increasing its ownership position to 14.9% from 11.4%.

·       Each unit consists of one share and half a warrant exercisable @ C$0.85 for two years.

·       The proceeds will be used for exploration and development of the Madsen gold project.

 

 

Major Financing Openings:

 

·       SRG Graphite (TSX-V:SRG) opened a C$8 million offering underwritten by a syndicate led by National Bank Financial on a best efforts basis. Each unit includes a warrant that expires in 12 months. The deal is expected to close on or about May 18th.

·       Pure Gold Mining (TSXV:PGM) opened a C$7.4 million offering on a strategic deal basis.

·       Pure Gold Mining (TSXV:PGM) opened a C$10.0 million offering underwritten by a syndicate led by Sprott Capital Partners on a bought deal basis. Each unit includes half a warrant that expires in 24 months.

·       Constantine Metal Resources (TSXV:CEM) opened a C$6.0 million offering on a strategic deal basis. Each unit includes a warrant that expires in 60 months.

 

Major Financing Closings:

·       Tinka Resources (TSXV:TK) closed a C$8.18 million offering on a best efforts basis. Each unit included half a warrant that expires in 24 months.

·       Critical Elements (TSXV:CRE) closed a C$7 million offering underwritten by a syndicate led by Canaccord Genuity on a bought deal basis. Each unit includes half a warrant that expires in 24 months.

·       Avino Silver & Gold Mines (TSXV:ASM) closed a C$5 million offering underwritten by a syndicate led by Cantor Fitzgerald Canada on a best efforts basis.   

·       Namibia Rare Earths (TSX:NRE) closed a C$4 million offering on a best efforts basis.

 

Company News

Zinc One Resources (TSXV:Z) extended the recently discovered high-grade zinc deposit at the Mina Chica zone of the Bongará zinc project in north-central Peru. It also announced a non-brokered private placement of up to 16.7 million units @ C$0.24 for gross proceeds of up to C$4.0 million. Each unit will be comprised of one share and half a warrant exercisable @ C$0.35 for three years.

·       Four drill holes show that high-grade mineralization continues to the northwest for more than 50m with true vertical thicknesses ranging from 7.4m to 20.1m and zinc grades in excess of 20%.

·       Drilling at Mina Chica is part of the ongoing program targeting several areas of known high-grade zinc mineralization.

·       53 holes for 2,371m have been drilled from 18 platforms to date.

·       Highlights of holes reported in this release included 12.7m @ 38.0% Zn in hole MCH18022.

 

Analysis

The drill program at Mina Chica continues to expand the deposit, which could have a positive impact on a future resource estimate for Bongará, which is expected in 3Q18. A successful fund-raising will provide the company with the capital it requires to continue drilling and produce the resource estimate.

 

Avrupa Minerals (TSXV:AVU) will begin drilling at its Alvito project in southern Portugal.

·       Exploration work is funded by OZ Minerals which can earn-in to 51%he project by spending A$1 million on exploration.

·       The drill project has been increased to 15 holes and about 2,100m over seven target areas. It is expanded from the original 1500m program following positive results from ongoing ground exploration.

·       The results are anticipated by the end of 2Q18.

 

Analysis

With Avrupa and OZ geologists considering the targets to potentially fit into the exploration model for iron oxide (magnetite) copper gold (IOCG) deposits, the Alvito project will now be drill-tested. With results expected before the end of the second quarter, the company will soon have a better idea of Alvito’s potential.

 

NuLegacy Gold (TSXV:NUG) reported the retirement of founding partner Dr Roger Steininger as chief geoscience officer.

·       Charles Weakly (of partner Barrick Gold) and chief geologist Derick Unger, are taking over responsibility for drill targeting.

  

 

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