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Oreninc Index Update: February 26th, 2018

Oreninc Index Update: February 26th, 2018

ORENINC INDEX falls as few companies finance pre PDAC

 

ORENINC INDEX - Monday, February 26th, 2018

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Last week index score: 46.39

This week: 40.31

 

Meet the Oreninc and the Mining Deal Club Team at PDAC 2018. You can find us at booth #3010. Make sure to stop by. We are also raffling off a rare find in North America – Monkey 47 Gin from Germany’s Black Forest.

 

Zinc One Resources (TSXV:Z) received results from the final batch of surface and pit samples at its Bongará zinc mine project in north-central Peru.

 

The Oreninc Index fell in the week ending February 23rd, 2018, with the index falling to  40.31 from 46.39 a week ago as financings continued to be scarce as Canada saw a four-day week as much of the country took Family Day. Only 13 deals opened during the week, which was the second in a row that there were more closings than openings. The dearth of financings is even stranger considering that the PDAC (Prospectors and Developers Association Conference), the largest mining show in the Americas, is just a week away.

The past week was quieter than recent weeks, with reduced volatility as markets stabilised somewhat. Gold was held back by a strengthening US dollar boosted by continued gains by US treasuries. Gold stocks continue to lag gold with some commentators pointing out the existence of a giant disconnect between the price of gold and the stock prices of the miners. This despite many miners posting very healthy profits, paying down large chunks of debt and having more than enough left over to reinstate juicy dividend policies, for example Glencore (LSE:GLEN).

On to the money: total fund raises announced fell even further to C$34.8 million, a five-week low, which included one brokered financing for C$21.0m, a two-week high, and one bought-deal financing for C$21.0 million, a two-week high. The average offer size fell to C$2.6 million, a four-week low, whilst the total number of financings fell to just 13, a 109-week low.

 

One market sub-sector that does appear to be healthy is lithium, which accounted for five of the 21 closings (some C$24.9m of the C$73.5M total closing dollars, or 33.8%).

 

Gold fell to US$1,328/oz from US$1,346/oz a week ago. The van Eck managed GDXJ closed down at US$31.91 from US$32.51 last week. The index is down 6.50% so far in 2018. In similar fashion, the US Global Go Gold ETF also closed down at US$12.31 from US$12.44 a week ago. It is down 5.38% so far in 2018. The SPDR GLD ETF continued to see inflows to close at 829.26 tonnes from 824.54 tonnes a week ago.

 

In other commodities, silver closed down at US$16.53/oz from US$16.64/oz a week ago. Copper also had a losing week to close down at US$3.23/lb from US$3.26/lb last week. Meanwhile, oil continued to improve and closed up at US$63.55 a barrel from US$61.68 a barrel a week ago.

The Dow Jones Industrial Average continued to recover from its recent battering to close up at 25,309 from 25,219 last week. Likewise, with Canada’s S&P/TSX Composite Index that closed up at 15,638 from 15,452 the previous week. The S&P/TSX Venture Composite Index saw a slight pull back to close down at 826.09 from 830.17 last week.

 

Summary:

·      Number of financings dipped to 13, a 109-week low.

·      One brokered financing was announced this week for C$21.0m, a five-week low.

·      One bought-deal financing was announced this week for C$21.0m, a two-week high.

·      Total dollars decreased to C$34.8m, a five-week low.

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

 

 

Financing Highlights

Millennial Lithium (TSXV:ML) opened a C$21 million bought deal underwritten by a syndicate led by Canaccord Genuity and Cantor Fitzgerald Canada as joint bookrunners and including Cormark Securities and Sprott Capital Partners.

·      6.0 million units @ C$3.50 including half a warrant exercisable @ C$4.25 for 24 months with 15% over-allotment option.

·      The net proceeds will be used for exploration and development of the company's lithium properties in Argentina.

 

Major Financing Openings:

·      Millennial Lithium (TSXV:ML) opened a C$21 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. The deal is expected to close on or about March 13th.

·      Guyana Goldstrike (TSXV:GYA) opened a C$3.2 million offering on a strategic deal basis. Each unit includes a warrant that expires in 24 months.

·      New Dimension Resources (TSXV:NDR) opened a C$3 million offering on a best efforts basis. The deal is expected to close on or about March 29th.

·      Tantalex Resources (CSE:TTX) opened a C$2.5 million offering on a strategic deal basis with Ruihua Investment (Hong Kong). Each unit includes a warrant that expires in 36 months.

 

Major Financing Closings:

·      Gold Standard Ventures (TSX:GSV) closed a C$28.19 million offering underwritten by a syndicate led by Macquarie Capital Markets Canada on a bought deal basis.

·      Standard Lithium (TSXV:SLL) closed a C$21.66 million offering underwritten by a syndicate led by Canaccord Genuity on a bought deal basis. Each unit included half a warrant that expires in 24 months.

·      Gold Standard Ventures (TSX:GSV) closed a C$10 million offering on a strategic deal basis with Goldcorp and Oceanagold.

·      Tantalex Resources (CSE:TTX) closed a C$2.5 million offering on a strategic deal basis with Ruihua Investment (Hong Kong).

 

Company News

Zinc One Resources (TSXV:Z) received results from the final batch of surface and pit samples at its Bongará zinc mine project in north-central Peru.

·      The program included 446 samples from historic pits and surface channel samples from the Bongarita, Mina Chica, Mina Grande Sur, and Mina Grande Norte areas of known mineralization.

·      Highlights from the Mina Grande Norte area included 5.0m @ 43.9% zinc from exploration pit P185-17.

Analysis

The sampling was consistent with historical legacy information and confirmed high-grade zinc results throughout the 1.4km trend of surface and near-surface zinc mineralization. The drill program that is underway will add thicknesses data to the reas of mineralization at Bongarita, Mina Chica, and Mina Grande.

 

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