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Episode 10

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Oreninc Index Update: July 3rd, 2017

ORENINC INDEX fells as gold slide continues

 

ORENINC INDEX - Monday, July 3, 2017

North America’s leading junior mining finance data provider

 

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Last week index score: 86.47

This week: 61.25

 

Zinc One Resources (TSXV: Z) exercised an option to acquire the Bongará zinc oxide and Charlotte Bongará zinc oxide

Avrupa Minerals (AVU:TSXV) arranged a $500,000 private placement that it subsequently increased C$1 million.

LiCo Energy Metals (TSXV: LIC) opened an exploration & development office in Santiago, Chile

 

The Oreninc Index fell in the week ending June 29th, 2017 to 61.25 from 86.47 the previous week.

Total fund raises announced fell to C$97.1 million, a four-week low, which included two brokered financings for a total of C$65.0 million, a four-week low, within which there were two bought-deal financings for C$65.0 million, a 15-week high. The average offer size fell to C$3.5 million, a four-week low, whilst the total number of financings announced fell to 28, a seven-week low.

Spot gold closed at US$1,241/oz, down from US$1,256 the previous week. Signs indicating that gold could have a rebound week punctured early on when a massive sell order of 1.8 million ounces trade executed at the close of the Asian trading day. Some commentators said this must have been a fat-finger muppet trade, stating that a trade of 18,149 ounces is very typical, but a trade of 18,149 lots of a futures contract (100 times bigger) is not. Others focused on that fact that the gold market absorbed this US$2.2 billion sale in less than a minute, during a period of illiquidity and the price only fell 1%.

The van Eck managed GDXJ has been on a downward trend since its recent rebalance and is now up 5.8% so far in 2017. The inventory of the SPDR GLD ETF remained flat at 854 tonnes, the same as the previous week. This week saw US Global launch its GO GOLD and Precious Metal Miners ETF (NYSE: GOAU) that will be a quant-driven ETF fund rebalanced quarterly that will actively look at factors that separate the good from bad.

In other commodities, silver spot price had a falter week closing US$16.62/oz from US$16.71 the previous week. The Comex copper price continued its steady run up to close at US$2.71 per pound from US$2.63 the previous week. Oil had a better week, finally breaking its losing streak to close at US$46.24 per barrel from US$43.01 last week. This was its longest run of gains in six months although it is still down 10% during the second quarter, which has cut US$113 billion from the value of companies listed in the MSCI World Energy Sector Index.

The Dow Jones Industrial Average saw a rare losing week to close down at 21,349 from 21,394 the previous week. Canada’s S&P/TSX Composite Index also fell to close at 15,182 from 15,319 the previous week. The S&P/TSX Venture Composite Index continued its general downward trend to close at 766.74.

Summary:

  • Number of financings fell to 28, a seven-week low.
  • Two brokered financings were announced for $65.0m, a four-week low.
  • Two bought-deal financing were announced for $65.0m, a 15-week high.
  • Total dollars dropped to $97.1m, a four-week low.
  • Average offer size decreased to $3.5m, a four-week low.

 

Financial news highlights

Alio Gold (TSX: ALO) entered into a bought deal agreement with a syndicate of underwriters led by Cormark Securities and Clarus Securities

  • 8.0 million units @ C$6.25 for gross proceeds of C$50.0 million.
  • Each unit comprises one share and half a warrant exercisable for one share @ C$8.00 for one year.
  • Net proceeds will be used to advance the Ana Paula project in Guerrero, Mexico.

Bowmore Exploration (TSX-V:BOW) opened a C$15 million offering underwritten by a syndicate led by Canaccord Genuity on a bought deal basis.

  • Bowmore begin trading this week as Osisko Metals (TSXV: OM) following a 3:1 share consolidation
  • Aim to build a base metal exploration and development company, with an emphasis on zinc.
  • The company will explore the Bathurst mining camp in New Brunswick, Canada and evaluate zinc targets in Québec.
  • Jeff Hussey president & CEO

Major Financing Openings:

  • Alio Gold (TSX-V:ALO) opened a C$50 million offering underwritten by a syndicate led by Cormark Securities on a bought deal basis. Each unit includes half a warrant that expires in 12 months.
  • Bowmore Exploration (TSX-V:BOW) opened a C$15 million offering underwritten by a syndicate led by Canaccord Genuity on a bought deal basis. Each unit includes a warrant that expires in 24 months. The deal is expected to close on or about July 14th.
  • Bowmore Exploration (TSX-V:BOW) opened a C$7 million offering on a best efforts basis. Each unit includes a warrant that expires in 24 months.
  • K92 Mining (TSX-V:KNT) opened a C$3.55 million offering on a best efforts basis. Each unit includes a warrant that expires in 12 months.

Major Financing Closings:

  • Nemaska Lithium (TSX-V:NMX) closed a C$50 million offering underwritten by a syndicate led by National Bank Financial on a bought deal basis.  
  • K92 Mining (TSX-V:KNT) closed a C$16.55 million offering on a best efforts basis.  Each unit includes a warrant that expires in 12 months.
  • Minera Alamos (TSX-V:MAI) closed a C$5.4 million offering underwritten by a syndicate led by Haywood Securities on a best efforts basis.  
  • AuRico Metals (TSX:AMI) closed a C$5 million offering underwritten by a syndicate led by Red Cloud Klondike Strike on a best efforts basis.  

 

Company news

Avrupa Minerals (AVU:TSXV) arranged a $500,000 private placement that it subsequently increased C$1 million.

  • The private placement is fully subscribed.
  • Placement of 5 million units @ C$0.10
  • Each unit is comprised of one share and a warrant exercisable @ C$0.15 for three years.
  • Proceeds will be used for exploration and operations in Portugal, Kosovo and Vancouver.

Conclusion

Having consolidated the Alvalade copper-zinc project in Portugal, Avrupa needed to top up the kitty to prepare for the next stage of drilling.

 

Zinc One Resources (TSXV: Z) exercised an option to acquire the Bongará zinc oxide and Charlotte Bongará zinc oxide

  • Cash payments of US$1.15 million
  • Foundation laid for the redevelopment of Bongará
  • Zinc One is the first company to own these projects together
  • A 6km long trend of known high-grade, zinc-oxide mineralization
  • Bongará was in production 2007 to 2008, but shut with the fall in zinc prices after the global financial crisis
  • Past production showed +20% zinc grades and +90% recoveries

Conclusion

This acquisition will help Zinc One on its path to becoming a zinc producer. It now controls two high-grade zinc projects and will advance them quickly to take advantage of the growing zinc bull market.

 

LiCo Energy Metals (TSXV: LIC) opened an exploration & development office in Santiago, Chile

  • Company preparing to advance the first phase of the Purickuta exploration program within the Salar de Atacama and review additional lithium and cobalt properties for potential acquisition.
  • LiCo holds an option to acquire up to a 60% interest in Purickut.

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