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Oreninc Index Update: January 15, 2018

Oreninc Index Update: January 15, 2018

ORENINC INDEX falls as gold threatens breakout

 

ORENINC INDEX - Monday, January 15th 2018

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Last week index score: 47.26 (Updated)

This week: 40.52

NuLegacy Gold (TSXV:NUG) reported encouraging gold mineralisation in one of two core holes drilled into the West Avocado zone.

Prospero Silver (TSXV:PSL) released a final update on the first-stage reconnaissance drilling of its Petate project in Hidalgo, Mexico.

 

The Oreninc Index fell in the week ending January 12th, 2018, as activity pulled back, to 40.52 from an updated 47.26.

The Fire and Fury: Inside the Trump White House, by Michael Wolff continues to provide a backdrop to the goings on inside the Tump Whitehouse, with the president continuing a rich vein of Trumpian form through comments about some of the countries where US immigrants come from. Quoting the words of former Trump Whitehouse communications director as expressed in the book: “you cannot make this s$&t up”.

A quieter week on the international front with the two Koreas engaged in a budding rapprochement that is reducing tension. In the UK, the politician that was one of the driving forces behind the referendum campaign for the UK to leave the European Union said that there should perhaps be another referendum before a final decision to leave the EU is made, and that the campaign to remain would probably have the upper hand.

Facebook founder Mark Zuckerberg saw a US$3 billion fall in his net worth on Thursday after commenting that he may restrict or remove paid-for advertising from users’ personal timelines.

Total fund raises fell to C$45.8 million, a two-week low, which included one brokered financing for C$10.5 million, a three-week high, and one bought-deal financing for the same amount, and also a three-week high. The average offer size fell to just C$1.6 million, a two-week low, whilst the total number of financings increased to 29, a three-week high.

Against this backdrop, gold continued its strong start to 2017 as the US dollar continued to show weakness.

Gold continued its recent growth spurt to close at US$1,337/oz from US$1,319/oz a week ago. The yellow metal is now up 2.7% so far in 2018. The van Eck managed GDXJ had a a rollarcoaster week, recovering strongly after shrugging off better than expected US CPI data, to close up at US$34.94 from US34.48 after seeing an intra-week low of US$33.27. The index is up 2.4% so far in 2018. The US Global Go Gold ETF saw an even stronger recovery to close up at US$13.05 from US$12.81 the week before. It is up 0.3% so far in 2018. The SPDR GLD ETF saw more selling to close at 828.96 tonnes from 835.86 tonnes a week ago.

In other commodities, silver closed down slightly at US$17.21/oz from US$17.22/oz a week ago. Copper also had a flat week to close down slightly at US$3.21/lb from US$3.22/lb last week. Oil was the big commodity winner of the week as it continued its breakout to close at US$64.30 a barrel from US$61.44 a barrel a week ago.

The Dow Jones Industrial Average continued its climb to close at 25,803 from 25,295 last week. Canada’s S&P/TSX Composite Index saw a volatile but flat week to close down at 16,308 from 16,349 the previous week. The S&P/TSX Venture Composite Index closed down at 878.20 from 895.71 last week.  

Summary:

  • Number of financings increased to 29, a three-week high.
  • One brokered financing was announced this week for C$10.5m, a three-week high.
  • One bought-deal financing was announced this week for C$10.5m, a three-week high.
  • Total dollars fell to C$45,8m, a two-week low.
  • Average offer size also fell to C$1.6m, a two-week low.

 

Financing Highlights

 

Liberty Gold (TSX:LGD) opened a C$10.47 million offering underwritten by a syndicate led by National Bank Financial on a bought deal basis.

  • Bought deal of 24.9 million units @ C$0.42
  • RCF Opportunities Fund agreed to purchase 14.8 million units and will own 8.4% of the company.
  • Each unit consists of one share and half a warrant exercisable @ C$0.65 for three years.
  • The proceeds will be used for continued exploration and drilling programs and to finalize a resource estimate for its Goldstrike project.

Major Financing Openings:

  • Liberty Gold (TSX:LGD) opened a C$10.47 million offering underwritten by a syndicate led by National Bank Financial on a bought deal basis. Each unit includes half a warrant that expires in 36 months. The deal is expected to close on or about January 26th.
  • Cornerstone Capital Resources (TSXV:CGP) opened a C$5.17 million offering on a best efforts basis. The deal is expected to close on or about February 1st.
  • Melior Resources (TSXV:MLR) opened a C$5 million offering on a best efforts basis. Each unit includes a warrant that expires in 24 months. The deal is expected to close on or about January 24th.
  • DLV Resources (TSXV:DLV.H) opened a C$3.2 million offering on a best efforts basis. Each unit includes a warrant that expires in 12 months.

Major Financing Closings:

  • Harte Gold (TSXV:HRT) closed a C$26.97 million offering underwritten by a syndicate led by Cantor Fitzgerald Canada on a bought deal basis.
  • Kootenay Silver (TSXV:KTN) closed a C$4.02 million offering on a best efforts basis. Each unit includes half a warrant that expires in 36 months.
  • Horizonte Minerals (TSX:HZM) closed a C$3.64 million offering underwritten by a syndicate led by Numis Securities on a best efforts basis.    
  • Mineral Mountain Resources (TSXV:MMV) closed a C$2.89 million offering on a best efforts basis.

Company News

NuLegacy Gold (TSXV:NUG) reported encouraging gold mineralisation in one of two core holes drilled into the West Avocado zone.

  • Hole drilled 120m east of last year's discovery holes 32.5m @ 0.61g/t Au.
  • Another hole drilled 120m north of the 2016 Avocado discovery holes contained anomalous gold.
  • Fourteen additional holes, drilled in the North Iceberg, Serena, VIO and Western Slope zones are out for assay.

 

Analysis

 

These results establish continuity in the Avocado Zone by defining a 120m corridor of gold mineralization that is open for at least another 600m to the east and northeast, towards mineralization established in the East Avocado discovery.

 

Prospero Silver (TSXV:PSL) released a final update on the first-stage reconnaissance drilling of its Petate project in Hidalgo, Mexico.

  • Twelve shallow holes were completed to establish structure and to allow for more accurate targeting of deeper mineralized zones.
  • Drilling at Petate is being carried out as part of its reconnaissance drilling campaign of three targets financed by strategic partner Fortuna Silver Mines.
  • Prospero aims to mobilise onto the next target, Pachuca SE, as soon as possible with a 3-4-hole, ±1,800m program scheduled.

 

Analysis

Prospero has completed drilling the three projects under the arrangement with Fortuna and Fortuna has the right to select one for a JV.

The El Petate results highlighted interesting grades over intervals of up to 24.9m downhole, indicating prospective deeper targets for a follow-up program.

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