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Episode 10

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Oreninc Index Update: July 31, 2017

ORENINC INDEX rises as gold and copper show growth

 

ORENINC INDEX - Monday, July 31th, 2017

North America’s leading junior mining finance data provider

 

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Last week index score: 20.33

This week: 29.32

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.

NuLegacy Gold (TSXV: NUG) discovered a material new gold zone 375m west of the North zone of the Iceberg gold deposit in Nevada, USA.

 

The Oreninc Index grew in the week ending July 27th, 2017 to 29.32 from 20.33 the previous week despite gold, copper and silver posting strong weeks. The summer doldrums continue to mean that there are slim pickings on the fund-raising front.

Total fund raises announced rose to C$23.7 million, a two-week high, which included one brokered financing—also a two-week high—and no bought-deal financings. The average offer size increased to C$1.2 million, a two-week high, whilst the total number of financings announced increased to 21, a two-week high.

Gold continued to strengthen to close at US$1,269/oz, up from US$1,254 the previous week as the US Federal Reserve didn’t raise interest rates.

The strengthening gold price as seen the van Eck managed GDXJ strengthen too and is now up 6.6% so far in 2017. The inventory of the SPDR GLD ETF has still yet to experience the rebound in gold and in fact saw its inventory fall to close the week at 792 tonnes from 814 tonnes the previous week.

In other commodities, silver is also continued to strengthen to close at US$16.75 from US$16.51/oz the previous week. The Comex copper price went on a tear this week to close at US$2.87 per pound up from US$2.72 the previous week having broken through the US$6,000/t mark. Oil had another week of strengthening to close up at US$49.71 per barrel from US$45.77 last week.

The Dow Jones Industrial Average returned to its winning ways closing at 21,830 from 21,580 the previous week. Canada’s S&P/TSX Composite Index, however, was more of a damp squib closing down at 15,128 from 15,183 the previous week. The S&P/TSX Venture Composite Index improved to close at 772.57 from 760.88 the previous week.

This week also saw Oreninc record issue #10 of the podcast series with Mercenary Geologist Micky Fulp, which is available on the website. We ponder why copper stocks have responded to the copper price strengthening yet gold stocks have not responded to a strengthening gold price.

 

Summary:

  • Number of financings increased to 21, a 2-week high.
  • One brokered financings were announced this week for $5.0m, a 2-week high.
  • No bought-deal financings were announced this week, an 8-week low.
  • Total dollars moved up to $23.7m, a 2-week high.
  • Average offer size also increased to $1.2m, a 2-week high.

 

Major Financing Openings:

  • GT Gold (TSXV: GT) opened a C$5 million offering underwritten by a syndicate led by Haywood Securities on a best efforts basis. The deal is expected to close on or about August 17th.
  • Rhys Resources (TSXV: RYS.H) opened a C$4 million offering on a best efforts basis. Each unit includes half a warrant that expires in 24 months.
  • RMP Energy (TSX: RMP) opened a C$2.2 million offering on an insider only basis. Each unit includes a warrant that expires in 48 months.
  • Abraplata Resource (TSXV: ABRA.H) opened a C$1.63 million offering on a best efforts basis.

Major Financing Closings:

  • NexGen Energy (TSXV: NXE) closed a C$65.2 million offering on a best efforts basis.    
  • West African Resources (TSXV: WAF) closed a C$17.25 million offering underwritten by a syndicate led by Sprott Capital Partners on a bought deal basis.
  • Velocity Minerals (TSXV: VLC.H) closed a C$2.21 million offering on a best efforts basis. Each unit includes half a warrant that expires in 12 months.
  • NioCorp Developments (TSXV: NB) closed a C$1.93 million offering underwritten by a syndicate led by Mackie Research Capital on a bought deal 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.

 

NuLegacy Gold (TSXV: NUG) discovered a material new gold zone 375m west of the North zone of the Iceberg gold deposit in Nevada, USA.

  • Drill hole IN17-03 encountered 125m of strongly brecciated jasperoid hosted in the Devonian Horse Canyon formation (an important host for gold in Carlin-type deposits).
  • Within this formation drilling intercepted 85.4m @ 0.64g/t Au that included 50.5m @ 1.00g/t Au.
  • The 2017 drilling program focuses on wildcat holes into targets identified by geophysical and geochemical surveys to find additional gold deposits.
  • Drilling to further define and expand the gold content of the Iceberg gold deposit will resume in the fall.

Analysis

The discovery of a new gold zone underlines the potential of the targets identified by geophysical and geochemical exploration, with an intercept of 50.5m @ 1.00g/t Au being very attractive. This, and any other subsequent discoveries by the current drilling program, have the potential to add ounces to the Iceberg and other gold deposits NuLegacy has defined on its Red Hill property.

 

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