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Oreninc Index Update: August 28, 2017

 

ORENINC INDEX falls as vacation season continues

 

ORENINC INDEX - Monday, August 28th, 2017

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Last week index score: 29.82

This week: 24.70

 

Zinc One Resources (TSXV: Z) received approval from the Ministry of Energy and Mines for its request to suspend the mine closure at the former Bongará zinc oxide mine in Peru.

Prospero Silver (TSXV: PSL) updates on reconnaissance drilling on early stage projects in the world class Mexican Altiplano mineral belt.

LiCo Energy Metals (TSXV: LIC) extended its option agreement with Durus Copper Chile due to contracting drilling.

 

The Oreninc Index fell in the week ending August 25th, 2017 to 24.70 from 29.82 the previous week with the markets very quiet as vacation season draws to a close. With the markets continuing to be quiet there were no brokered or bought deals this week. Since June 1st there has been 12 weeks of trading and out of those 12, six weeks have seen more deals close than open.

Total fund raises announced increased to C$48.7 million, a three-week high, which included no brokered financing and no bought-deal financings. The average offer size grew to C$2.7 million, a seven-week high, whilst the total number of financings announced decreased to 19, a two-week low.

Despite relatively low levels of activity, gold had an interesting and strong week including briefly breaking through the US$1,300/oz mark, benefitting from mixed opinions among members of the Federal Open Market Committee on inflation and future interest rate hikes, which were interpreted to mean that future rate hikes will come later rather than sooner. Gold also benefitted from flight-to-safety moves as the stock market sold off as attention focused on the US president.

Gold saw another push towards US$1,300/oz and closed the week at US$1,297/oz up from slightly from US$1,291 last week. The van Eck managed GDXJ was lifted by the gold price increase and is now up 7.6% so far in 2017 at US$33.94. The recently launched US Global Go Gold ETF had a strong week to close at US$12.65 from US$12.43 last week, whilst the inventory of the SPDR GLD ETF broke over the 800t mark for the first time since July 25th to close the week at 805 from 799 tonnes the previous week.

In other commodities, silver continued its dance with the US$17/oz mark and closed at US$17.07 up from US$16.98/oz last week. The copper price put in a strong week to finally sail through the US$3/lb level and closed up at US$3.05/lb from US$2.96/lb the previous week. Oil gave up some recent gains and closed down at US$47.87 per barrel from US$48.51 per barrel last week.

The markets returned to growth this week with the Dow Jones Industrial Average increasing to 21,813 from 21,674 last week. Canada’s S&P/TSX Composite Index mirrored the DJIA chart and grew to 15,055 from 14,952the previous week. The S&P/TSX Venture Composite Index fell slightly to close at 769.47 from 769.76 the previous week.

Summary:

  • Number of financings decreased to 19, a 2-week low.
  • No brokered financings were announced this week, a 5-week low.
  • No bought-deal financings were announced this week, a twelve-week low.
  • Total dollars increased to $48.7m, a 3-week high.
  • Average offer size also increased to $2.7m, a 7-week high.

 

Financial news highlights

Reunion Gold (TSXV: RGD) opened a C$15 million offering on a best efforts basis @ C$0.13.

  • Each unit includes half a warrant @ C$0.20 that expires in 36 months. The deal is expected to close on or about September 7th.
  • The proceeds will be used for exploration and development of the company’s gold projects in French Guiana.

 

 Major Financing Openings:

  • Reunion Gold (TSXV: RGD) opened a C$15 million offering on a best efforts basis. Each unit includes half a warrant that expires in 36 months. The deal is expected to close on or about September 7th.
  • Jericho Oil (TSXV: JCO) opened a C$10 million offering on a best efforts basis. Each unit includes half a warrant that expires in 36 months.
  • Compass Gold (TSXV: CVB) opened a C$5 million offering on a best efforts basis.
  • Rise Gold (CSE: RISE) opened a C$3.6 million offering on a best efforts basis. Each unit includes a warrant that expires in 24 months.

Major Financing Closings:

  • Senator Minerals (TSXV: SNR) closed a C$ =INT(2,500,000.00)/1000000 2.5 million offering on a best efforts basis.    
  • Pine Point Mining (TSXV: ZINC) closed a C$2 million offering on a best efforts basis. Each unit included half a warrant that expires in 24 months.
  • Global Li-Ion Graphite (CSE: LION) closed a C$1.5 million offering on a best efforts basis. Each unit included a warrant that expires in 12 months.
  • Trigon Metals (TSXV: TM) closed a C$1.49 million offering on a best efforts basis.

Company news

Zinc One Resources (TSXV: Z) received approval from the Ministry of Energy and Mines for its request to suspend the mine closure at the former Bongará zinc oxide mine in Peru.

  • The decision allows the company to start exploration under the current environmental impact assessment.
  • The sampling programme to update the environmental baseline study is near completion and an application for the initial drilling platforms will be submitted imminently. Drilling is anticipated to start in in September.
  • Company gearing up to produce a resource estimate and preliminary economic assessment for completion in early 2018.

Analysis

Obtaining approval to suspend the mine closure is a crucial advance as the company looks to restart zinc production from Bongara. Zinc One is looking to move forward rapidly to take advantage of the increasing zinc price and to calculate a resource and PEA within months.

 

Prospero Silver (TSXV: PSL) updates on reconnaissance drilling on early stage projects in the world class Mexican Altiplano mineral belt.

  • Drilling is anticipated to begin at El Petate project in Hidalgo in September, the company’s most advanced project, with total meterage of up to 2,800m.
  • High-level epithermal alteration is exposed over a 5x4 km area with highly anomalous gold and silver hosted in extensive outcrops and float of steep to strata-bound jasperoid. The size of the silicified zones indicates that Petate is a robust mineralized system and where surface sampling at the Apartadero target returned a continuous channel sample of 67.5m @ 0.93 g/t Au.
  • Drill permits about to be granted for 29 drill sites. Surface access has been secured. Drilling funded by strategic partner Fortuna Silver Mines (TSX: FVI).

Analysis

Petate will see significant drilling and is one of Propsero’s highest profile targets and so it is key in validating its hypothesis for finding potentially large silver deposits under geological cover.

 

LICO ENERGY ANNOUNCES EXTENSION AGREEMENT TO MINING OPTION AGREEMENT WITH DURUS COPPER

LiCo Energy Metals (TSXV: LIC) extended its option agreement with Durus Copper Chile due to contracting drilling.

  • The next payment of US$2 million that was to be paid in October will now be paid in two instalments with US$200,000 to be paid upon signing the extension and the remainder in December.
  • The agreement enables the company to acquire up to a 60% interest in the Purickuta lithium property.
  • Purickuta is within the Atacama Salar where Sociedad Quimica y Minera (SQM)  produces lithium.

Analysis

The extension will allow the company to complete drilling on Purickuta to see if it is a project worth continuing with prior to making a significant payment to the vendor.

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