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Episode 10

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Oreninc Index Update: August 7, 2017

 

 ORENINC INDEX jumps as gold falls

 

 

ORENINC INDEX - Monday, August 7th, 2017

North America’s leading junior mining finance data provider

 

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Last week index score: 30.00 (Updated)

This week: 61.18

 

The Oreninc Index jumped in the week ending August 3rd, 2017 to 61.18 from an updated 30.00 the previous week.

Total fund raises announced jumped to C$83.3 million, a four-week high, which included six brokered financing for C$22.5 million, a five-week high, and no bought-deal financings. The average offer size increased to C$1.9 million, a two-week high, whilst the total number of financings announced increased to 44, an eight-week high.

US non-farm payroll data at the end of the week was strong, which finally allowed the US dollar to snap its losing streak to close at 93.5 from 93.3 a week ago. Earnings season is upon us, which has seen a fair amount of reward and punishment meted out to precious metals miners in response to their 2Q17 results, reinforcing the divergence of the wheat from the chaff during this thin trading part of the year. Gold fell for the first time in several weeks to close at US$1,258/oz, down from US$1,269/oz the previous week.

The softening gold price was reflected in the van Eck managed GDXJ which fell and is now up 2.6% so far in 2017 at US$32.39. The recently launched US Global Go Gold ETF fared slightly better, although falling to US$12.00 from US$12.38 last week, whilst the inventory of the SPDR GLD ETF continued its slide and its inventory fell to close the week at 787 tonnes from 791 tonnes the previous week.

In other commodities, silver reflected gold’s fall to close at US$16.27/oz from US$16.75/oz the previous week. The Comex copper price consolidated recent gains to close slightly up at US$2.88/lb up from US$2.87/lb the previous week. Oil also saw some price consolidation, although with a more volatile week than copper, to close slightly down at US$49.58 per barrel from US$49.71 last week.

The sky seems to be the limit for the Dow Jones Industrial Average which posted more strong growth to break through 22,000 and close at 22,092 from 21,830 the previous week. Canada’s S&P/TSX Composite Index also saw growth to close up at 15,257 from 15,128 the previous week. The S&P/TSX Venture Composite Index fell to close at 765.68 from 772.57 the previous week.

 

Summary:

  • Number of financings increased to 44, an 8-week high.
  • Six brokered financings were announced this week for $22.5m, a 5-week high.
  • No bought-deal financings were announced this week, a 9-week low.
  • Total dollars moved jumped up to $83.3m, a 4-week high.
  • Average offer size had a small increased to $1.9m, a 2-week high.

 

 

Major Financing Openings:

  • LSC Lithium (TSXV: LSC) opened a C$20 million offering underwritten by a syndicate led by GMP Securities on a best efforts basis.
  • Wellgreen Platinum (TSXV: WG) opened a C$9.53 million offering on a best efforts basis. Each unit includes half a warrant that expires in 60 months. The deal is expected to close on or about August 4th.
  • Sabina Gold & Silver (TSX: SBB) opened a C$6 million offering on a best efforts basis. The deal is expected to close on or about September 10th.
  • Jericho Oil (TSXV: JCO) opened a C$5.66 million offering on a best efforts basis. Each unit includes half a warrant that expires in 36 months.

LSC Lithium (TSXV: LSC) opened a C$20 million offering underwritten by a syndicate led by GMP Securities.

  • Pricing will be determined by the market.
  • Financing to fund an accelerated and expanded exploration program on its lithium brine projects in Northern Argentina and to increase its cash position following payment of C$14.3 million to secured lenders who did not exercise conversion rights regarding the LitheA acquisition.
  • Exploration initiated at Salar de Pozuelos that includes 15 holes to test depths and collect brine and Relative Brine Release Capacity (RBRC) samples.  

Wellgreen Platinum (TSXV: WG) opened a C$9.53 million offering.

  • 25.1 million units @ C$0.26 comprised of one share and half a warrant exercisable @ C$0.35 for five years plus 8.7 million FT units @ C$0.3458 comprised of one flow-through share and half a warrant exercisable @ C$0.35 for five years.
  • Tocqueville Gold Fund, Resource Capital Fund VI, Electrum Strategic Opportunities Fund and Drake Private Investments will participate in the financing.
  • Gross proceeds will be to continue development of the Wellgreen Ni-PGM-Cu project in Yukon.

 

Major Financing Closings:

  • Fiore Exploration (TSXV: F) closed a C$17.01 million offering underwritten by a syndicate led by GMP Securities on a best efforts basis. Each unit included a warrant that expires in 36 months.
  • PentaNova Energy (TSXV: PNO) closed a C$16.5 million offering on a best efforts basis. Each unit included a warrant that expires in 60 months.
  • Wealth Minerals (TSXV: WML) closed a C$5.48 million offering on a best efforts basis.
  • Oceanus Resources (TSXV: OCN) closed a C$3 million offering on a best efforts basis.

 

Company news

Castle Silver Resources (TSXV: CSR) said testing by SGS Lakefield produced a 14.8% cobalt concentrate from sampled material from the first level of the Castle mine.

  • An 82kg sample of vein material taken from the first level of the Castle mine
  • The cobalt concentrate will now go through CSR's proprietary Re-2OX process that is designed to meet the cobalt hydroxide specifications of four large Japanese metal trading companies
  • Surface drilling, underground sampling and preparations for underground drilling continue at the Castle mine near Gowganda, Ontario, Canada

Analysis

Production of a cobalt concentrate for subsequent testing by potential Japanese metal traders is a key step on Castle’s plan to explore and develop cobalt production at the former silver mine. Being able to produce an acceptable concentrate will be one of the key milestones for the project.

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