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Episode 10

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Oreninc Index Update: June 26th, 2017

ORENINC INDEX up as gold shows promise of growth spurt

 

ORENINC INDEX - Monday, June 26, 2017

North America’s leading junior mining finance data provider

 

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Last week’s index score: 73.66

This week: 86.47

 

Avrupa Minerals (TSXV: AVU) recovered 100% ownership of the Alvalade VMS copper-lead-zinc project in the Iberian pyrite belt in southern Portugal.

Prospero Silver (TSXV: PSL) started drilling at the Matorral project in in the Santa Maria del Oro camp, Durango state, Mexico.

NuLegacy Gold (TSXV: NUG) announced results from the 40-hole, 10,500m drilling campaign on the Red Hill property in the Cortez gold trend of Nevada, USA.

Zinc One (TSXV: Z) plans drilling and PEA

 

The Oreninc Index increased in the week ending June 22th, 2017 to 86.47 from 73.66 the previous week.

Total fund raises announced jumped to C$219.7 million, a 16-week high, which included four brokered financings for a total of C$110.0 million, an 18-week high, within which there were two bought-deal financings for C$30.0 million, a two-week low. The average offer size grew to C$5.4 million, a 16-week high, whilst the total number of financings announced increased to 41, a two-week high.

Gold posted a robust week on the back of weaker US treasury yields and the US dollar index falling to close the week at 97.3 from 97.5 the previous week. The ten-year Treasury Inflation Protected Securities (TIPS) yields also peaked and started moving down again, which in recent history has seen the gold price strengthen.

Gold closed at US$1,256/oz, up from US$1,253 the previous week, but will this upward move see it break through the US$1,300/oz mark?

With its rebalance firmly under its belt the van Eck managed GDXJ put in some good growth as the gold price improved and is now up 8.4% so far in 2017. The inventory of the SPDR GLD ETF remained flat at 854 tonnes, the same as the previous week.

In other commodities, silver spot price mirrored gold’s trajectory and closed the week at US$16.71/oz from US$16.70 the previous week. The Comex copper price had an up-and-down week recovering strongly to close at US$2.63 per pound from US$2.57 the previous week, after falling to US$2.57 mid-week. Oil is the commodity that cannot get a break continuing its losing streak as WTI crude fell to US$43.17 per barrel from US$44.74 last week, but ending the week on an up-tick after hitting a low of US$42.53.

The Dow Jones Industrial Average continued to climb to close up at 21,394 although it ended the week on a down trend after peaking at 21,528. Canada’s S&P/TSX Composite Index saw a stronger week to close at 15,319 up from 15,192 the previous week. The S&P/TSX Venture Composite Index was in growth mode again to close at 777.25.

 

Summary:

  • Number of financings increased to 41, a two-week high.
  • Four brokered financings were announced for $110.0m, an 18-week high.
  • Two bought-deal financing were announced for $30.0m, a two-week low.
  • Total dollars jumped to $219.7m, a 16-week high.
  • Average offer size grew to $5.4m, a 16-week high.

 

 

Financial news highlights

North American Palladium (TSX:PDL) opened a C$40 million offering and C$10 million in flow-through shares by a syndicate coled by Scotiabank, BMO Capital Markets and CIBC Capital Markets and including RBC Capital Markets and TD Securities.

  • The net will be used to repay a portion of the C$123 million debt owed to Brookfield Capital Partners and The Bank of Nova Scotia, exploration, the advancement of open pit pre-stripping and the tailings management facility at its 15,000 tpd Lac des Iles palladium mine in Ontario, Canada that has reserves of 38Mt @ 2.25 g/t palladium.

Major Financing Openings:

  • Oryx Petroleum (TSX:OXC) opened a C$59.37 million offering on a strategic deal basis.
  • Oronova Energy (TSXV: ONV) opened a C$40 million offering underwritten by a syndicate led by Peters and Co on a best efforts basis. The deal is expected to close on or about August 17th.
  • North American Palladium (TSX:PDL) opened a C$40 million offering underwritten by a syndicate led by Bank of Nova Scotia on a best efforts basis.
  • Newcastle Gold (TSXV:NCA) opened a C$15.01 million offering underwritten by a syndicate led by Beacon Securities on a bought deal basis. The deal is expected to close on or about July 13th.

Major Financing Closings:

  • Oryx Petroleum (TSX:OXC) closed a C$ =INT( 59,369,952.00 )/1000000 59.37 million offering on a strategic deal basis.
  • Oryx Petroleum (TSX:OXC) closed a C$13.46 million offering on a strategic deal basis.
  • Standard Lithium (TSXV: SLL) closed a C$7.42 million offering on a best efforts basis.    
  • Aldridge Minerals (TSXV: AGM) closed a C$6.62 million offering on a strategic deal basis.  

 

Company news

NuLegacy Gold (TSXV: NUG) announced results from the 40-hole, 10,500m drilling campaign on the Red Hill property in the Cortez gold trend of Nevada, USA.

  • Every drill hole drilled to date has encountered gold mineralization.
  • Near surface gold mineralization intercepted at Iceberg South with 4.5m @ 0.6 g/t Au opening a ~1,000m as yet undrilled area to the west and northwest.
  • Iceberg Central was drilled as a 70m step out and encountered multiple gold values that opens a corridor that it is anticipated connects to the North zone, with an intercept of 20.5m @ 0.3g/t Au.
  • NuLegacy plans to drill the gold-in-soil anomaly at the VIO claim area some 4km west of the Iceberg's Central zone, as well as the Jasperoid Basin area in the near future.

Analysis

Drilling continues to intercept gold mineralization that will potentially add to the size of NuLegacy’s existing deposits and build its story by showing that there is potential for additional ounces to be added to its overall resources at the Iceberg project from other targets in the area.

 

Prospero Silver (TSXV: PSL) started drilling at the Matorral project in in the Santa Maria del Oro camp, Durango state, Mexico.

  • Drilling is part of a planned 6,900m program to test three projects under the terms of a strategic investment from Fortuna Silver Mines (TSX: FVI).
  • Four holes are planned at Matorral, followed by eight at the Petate project and eight holes at Pachuca SE.
  • The first hole at Matorral is laid out to pin the dip of what is believed to be the controlling structure on potential mineralization at depth. Matorral has over 7km of prospective structures

Analysis

This drilling program is proof of concept drilling that will test the company’s hypothesis of locating potentially large-scale blind silver deposits that are under geological cover.

Avrupa Minerals (TSXV: AVU) recovered 100% ownership of the Alvalade VMS copper-lead-zinc project in the Iberian pyrite belt in southern Portugal.

  • Avrupa signed agreements with two former partners that transfer the outstanding 60% ownership of the project back to the company for debt forgiveness and future payments.
  • An initial drill hole into the Sesmarias target intersected 10.85m @ 1.81% Cu, 2.57% Pb & 4.38% Zn.
  • Drilling hit mineralization over a 1.8km strike length.
  • Subsequent drilling at Sesmarias extended a massive sulphide lens to +300m length with a 20-40m thickness.

Analysis

Recovery of Alvalade means Avrupa is in full control of the highly prospective VMS project. Expect a future plan to be announced once the company has reviewed all project data.

 

Zinc One (TSXV: Z) plans drilling and PEA

  • Plans to collect core for metallurgical testing from an upcoming drill programme as part of a preliminary economic assessment.
  • Drill-platform permit applications being submitted with the intent to begin drilling in the third quarter.
  • The drill program will involve low-cost shallow drilling and tight drill spacing in zones of known mineralization, and test zones on the periphery of the known mineralization.
  • Drilling to be completes by year end with a PEA technical report to be completed shortly thereafter.

Analysis

An independent report on zinc oxide production prepared by Pascal Briol and Noel Masson said that the zinc-oxide ore Bongará in Peru shares a similar mineralogy and general geochemistry of the zinc-oxide ore at the Shaimerden deposit in Kazakhstan that is treated at the Ridder Smelter complex in Kazakhstan with a reported zinc recovery of 95% utilizing a Waelz kiln. As the previous operator of the Bongará mine processed the zinc-oxide mineralization with a Waelz kiln this bodes well for the processing option for a future production scenario.

 

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