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Oreninc Index Update: January 29, 2018

Oreninc Index Update: January 29, 2018

ORENINC INDEX falls as financings reduce to trickle

 

ORENINC INDEX - Monday, January 29th, 2018

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Last week index score: 34.36
This week: 22.99

 

Zinc One Resources (TSXV:Z) received additional results from an ongoing surface-sampling program at its Bongará zinc mine project in north-central Peru.
Prospero Silver (TSXV:PSL) started drilling at the Pachuca SE project in Hidalgo, Mexico.
NuLegacy Gold (TSXV:NUG) reported further results from its Serena and North Iceberg Zones as part of a 16-hole fall drill program in Nevada, USA.
Avrupa Minerals (TSXV:AVU) provided an exploration update for its Alvito project in Portugal where work is funded by OZ Minerals.

 

The Oreninc Index fell in the week ending January 26th, 2018, as a lack of activity saw the metaphorical tumbleweeds rolling down Bay St with the index falling to 22.99 from 34.36 a week ago.

Conference season has begun with the Vancouver Resource Investment Conference and AMEX Roundup in Vancouver, Canada this past week. And whilst both events were well attended, interest from the financial sector in mining continues to be muted. This is peculiar considering that the prices for gold, copper and other metals have been riding high(er) since the start of the year.

February sees a number of banks hosting conferences for their own clients culminating in the BMO Metals and Mining event in Florida at the end of the month, arguably the best mining event in the world, and then the main exploration event of the year the Prospectors and Developers Association Conference (PDAC) in Toronto. Expect a lot of news flow in the coming weeks and a pick-up in equity raises.

On the geopolitical front, all eyes were on the Davos conference of world leaders and leading businessmen last week. Whilst there was a lot of talk about equality, much of that seemed to be of the male-female kind rather than the rich world-not so rich world kind. US president Donald Trump was in attendance and surprised many people with the uncharacteristically measured tone of his discourse rather than his habitual tub-thumping.

On to the money: total fund raises announced fell to a paltry C$19.6 million, a three-week low, which included no brokered financings and no bought-deal financings. The average offer size fell to just C$0.9 million, a four-week low, whilst the total number of financings increased to 22, a two-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$1,357/oz from US$1,333/oz a week ago. The yellow metal is now up 3.1% so far in 2018. The van Eck managed GDXJ had an up-and-down week, to close slightly up at US$34.79 from US$34.40 after seeing an intra-week high of US$35.74. The index is up 1.9% so far in 2018. The US Global Go Gold ETF saw growth to close up at US$13.06 from US$12.84 a week ago after hitting an intraweek high of US$13.30. It is up 0.38% so far in 2018. The SPDR GLD ETF saw modest growth, adding a couple of tonnes to close at 848.14 tonnes from 846.67 tonnes a week ago.

In other commodities, silver saw a strong gain to close up at US$17.40/oz from US$17.02/oz a week ago. Copper also had a flat week to close up slightly at US$3.19/lb from US$3.18/lb last week after hitting an intraweek low of US$3.11/lb. Meanwhile, oil continues its upward climb to close at US$66.14 a barrel from US$63.37 a barrel a week ago.

The Dow Jones Industrial Average continued its climb to close at 26,616 from 26,071 last week. Canada’s S&P/TSX Composite Index saw a volatile week to close down at 16,239 from 16,353 the previous week. The S&P/TSX Venture Composite Index closed up at 890.80 from 880.44 last week.

 

Summary:

  • Number of financings increased to 22, a two-week high.
  • No brokered financings were announced this week, a three-week low.
  • No bought-deal financings were announced this week, a three-week low.
  • Total dollars fell to C$19.6m, a four-week low.
  • Average offer size also fell to C$0.9m, a four-week low.

 

 

Financing Highlights

Royal Road Minerals (TSXV:RYR) opened a C$3.42 million offering on a best efforts basis together with a C$1.58 million offering on a strategic deal basis.

  • Barrick Gold (TSX:ABX) agreed to purchase 9.9M shares @ C$0.16 to bring its total holding in the company to 12.5%.
  • Royal Road will also issue an additional 21.4M shares to investors to bring the financing to C$5.0M.
  • Royal Road and Barrick entered into an investor rights agreement giving Barrick the right to participate in future equity financings and maintain its pro rata ownership.
  • Proceeds will be used for exploration and development at Royal Road¿s Colombian and Nicaraguan properties.

 

Major Financing Openings:

  • Royal Road Minerals (TSXV:RYR) opened a C$3.42 million offering on a best efforts basis. The deal is expected to close on or about February 9th.
  • Sennen Potash (TSXV:SN) opened a C$2 million offering on a best efforts basis. Each unit includes a warrant that expires in 12 months.
  • Royal Road Minerals (TSXV:RYR) opened a C$1.58 million offering on a strategic deal basis. The deal is expected to close on or about February 9th.
  • Berkwood Resources (TSXV:BKR) opened a C$1.5 million offering on a best efforts basis. Each unit includes a warrant that expires in 24 months.

 

Major Financing Closings:

  • PetroShale (TSXV:PSH) closed a C92.46 million offering on a strategic deal basis.
  • Excelsior Mining (TSXV:MIN) closed a C$38.64 million offering on a best efforts basis.
  • Alphamin Resources (TSXV:AFM) closed a C$28.53 million offering underwritten by a syndicate led by Sprott Capital Partners on a best efforts basis. Each unit included half a warrant that expires in 36 months.
  • Alphamin Resources (TSXV:AFM) closed a C$27.47 million offering on a best efforts basis.

 

Company News

NuLegacy Gold (TSXV:NUG) reported further results from its Serena and North Iceberg Zones as part of a 16-hole fall drill program in Nevada, USA.

  • Serena holes essentially connected the Serena zone with the North Zone.
  • Drill assays included 3.3m @ 14.7g/t Au.
  • The previously unexplored Serena zone is now nearly 300m by 200m of continuous mineralization averaging ~1.0g/t Au.

Analysis

As NuLegacy continues to explore it is becoming better able to target Carlin-style gold mineralization along structural corridors that have been identified by geophysical and geochemical data. The 2018 drilling programme will aim to further expand the Serena zone.

 

Avrupa Minerals (TSXV:AVU) provided an exploration update for its Alvito project in Portugal where work is funded by OZ Minerals.

  • Avrupa has completed ground magnetics and gravity geophysical surveys, geological mapping, rock chip sampling and drill targeting.
  • A 1,500m drilling program but was suspended as ground exploration work continued to be successful, such that the company may increase the program to 2,000-2,500m.
  • Most exploration has concentrated on the southern half of the license where numerous copper prospects along two sub-parallel, 10-km long, NNW-trending structures highlight the potential for copper-gold mineralization.

Analysis

With the company undertaking the first, truly systematic exploration of the area, its considered early-stage exploration approach is resulting in the identification of copper and gold mineralization in a number of areas, which bodes well for when drilling finally commences around the end of March.

 

Prospero Silver (TSXV:PSL) started drilling at the Pachuca SE project in Hidalgo, Mexico.

  • This is the third project in a 6,900m program to test three of Prospero’s projects under the terms of a strategic investment from Fortuna Silver Mines (TSX:FVI).
  • A 3-4 hole, 1,800m drill program will test two targets with deep, angled holes.
  • Pachuca SE is on strike from the Pachuca-Real del Monte epithermal vein camp, one of the world’s largest epithermal precious metal deposits and the local geology is typical of a high-level epithermal environment.

Analysis

The completion of this program will also mark the completion of the first phase of Fortuna’s strategic investment. The drilling it funded was to determine which targets are the most interesting and highest potential and so following the completion of the Pachuca SE drilling, Fortuna and will decide which project it will enter into a JV to continue exploring.

 

Zinc One Resources (TSXV:Z) received additional results from an ongoing surface-sampling program at its Bongará zinc mine project in north-central Peru.

  • Surface channel sample C-011-17 returned 45.0m @ 27.7% Zn from the southern end of a 1.4km trend of surface and near-surface zinc mineralization called Mina Grande Sur.
  • Drilling is to commence in February with 124 drill platforms approved. Two portable drill rigs are currently being mobilized, where nearly all 15 permitted platforms at Bongarita have been prepared for drilling.

Analysis

The high zinc values augment previous high-grade results from samples collected at Mina Grande Sur, Bongarita and Mina Chica. With drilling to commence shortly, and 124 platforms permitted, the news flow over the coming months should be considerable and continual regarding the potential for Bongara to host economic quantities of high-grade zinc.    

 

 

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