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Oreninc Index Update: March 20, 2017

ORENINC INDEX increases as gold moves up

 

ORENINC INDEX - Monday, March 20, 2017

North America’s leading junior mining finance data provider

 

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Kootenay Silver Inc. (TSXV: KTN) began phase II leach testing of oxide and sulphide silver mineralization on bulk samples from the La Cigarra silver deposit using SILVOX process.

AuRico Metals Inc. (TSX: AMI) receives environmental assessment approval for Kemess underground project.

 

Last week index score: 65.62

This week: 69.20

 

The Oreninc Index increased in the week ending March 16, 2017 to 69.20 following the previous week’s strong retrenchment to 65.62 as gold consolidated above the US$1,200 per ounce level to close the week at US$1,228.

Gold, silver and copper increased mid-week after the US Federal Reserve announced a 0.25% increase in interest rates. Market analysts say that this increase was expected and already priced into the market, and the fact that the press conference comments by Federal Reserve Chair Janet Yellen were dovish, provided a sell-the-rumour, buy-the-fact trading action. Whilst the Federal Reserve is expected to continue raising rates throughout 2017 and 2018 market observers believe that rate increases will now happen at a slower pace than previously thought.

The period following the PDAC (Prospectors and Developers Association Conference) in Toronto in early March has traditionally corresponded to the shutting of the first significant financing window of the year, with deals dropping off after the conference, known as the PDAC curse. Evidence of this was present this week as the number of financings fell to 27, a nine-week low, even though the total dollars increased to C$128.9m, a two-week high and the average offer size doubled to C$4.7m, a two-week high. This latter figures were skewed however by a financing by oil company Painted Pony. Of the 27 financings announced, there were two brokered financings for C$102.8m, a four-week high, and one bought-deal financing for C$98.8m, a seven-week high. The PDAC curse of reduced financings usually recovers in April. 

With gold having a stronger week, the industry’s leading benchmark index, the van Eck GDXJ saw growth resume and is now up 14.99% so far in 2017, as did the inventory of the SPDR GLD ETF which increased from 825.22 tonnes a week ago to 834.1 tonnes this week.

With strikes continuing at some of the world’s largest copper mines the copper price strengthened slightly to close at US$2.69 per compound compared to US$2.60 per pound a week ago. With management and the union at Escondida no closer to negotiation than when the strike started over a month ago, management is considering a lock-out and closure of its installations.

WTI crude remained under US$50 after falling below that psychological level last week for the first time since December 2016.

The Dow Jones Industrial Average continued above the 20,000 mark and consolidated at 20,914 after closing the previous week at 20,902. In Canada, the S&P/TSX Composite Index also had a week of consolidation although trending down on the previous weeks’ 15,506 to close at 15,490. In the junior space, the S&P/TSX Venture Composite Index closed up on the week at 810.59 from 799.19 the previous week. This index hit a year high of 844.96 on 21st February.

This past week, Oreninc published its latest podcast with The Mercenary Geologist Mickey Fulp recorded at the PDAC, to get his observations on the event, which is available on www.oreninc.com.

Financial news highlights

Trevali Mining (TSX: TV) entered into an agreement with BMO Capital Markets for a bought deal private placement of C$230 million. The proceeds will be used to pay for the purchase of a portfolio of zinc assets from Glencore for an aggregate purchase price of US$400 million. Traveli also expects to fund a portion of the cash consideration through a new senior secured credit facility of US$190 million.

K92 Mining (TSX-V:KNT) arranged a non-brokered private placement to raise up to C$10.0 million to raise funds for grade control, expansion and exploration drilling, work on the underground incline drive at its Kora deposit of its Kainantu project in Papua New Guinea. K92 began an underground drive at Kora in early March that is a a continuation of the Irumafimpa incline drive. Kora is a high-grade gold deposit with a resource estimate of 4.36 million tonnes grading 7.3 g/t Au, 35 g/t Ag & 2.23% Cu. K92 is targetting first production from Kora oin 1H18.

 

Summary:

  • Number of financings dropped to 27, a nine-week low.
  • Two brokered financings were announced for $102.8m, a four-week high.
  • One bought-deal financings were announced for $98.8m, a seven-week high.
  • Total dollars increased to $128.9m, a two-week high.
  • Average offer size doubled to $4.7m, a two-week high.

 

Major Financing Openings:

  • Painted Pony Petroleum (TSX:PPY) opened a C$ =INT( 100,901,360.00 )/1000000 100.9 million offering underwritten by a syndicate led by Cormark Securities on a bought deal basis. The deal is expected to close on or about April 4, 2017.
  • K92 Mining (TSX-V:KNT) opened a C$10 million offering on a best efforts basis. Each unit includes a warrant that expires in 12 months.
  • Aurania Resources (TSX-V:ARU) opened a C$4 million offering underwritten by a syndicate led by Maison Placements Canada on a best efforts basis. Each unit includes half a warrant that expires in 18 months. The deal is expected to close on or about March 31, 2017.
  • Tower Resources (TSX-V:TWR) opened a C$3.2 million offering on a best efforts basis.  Each unit includes half a warrant that expires in 60 months.

 

Major Financing Closings:

  • Argonaut Gold (TSX:AR) closed a C$ =INT( 40,080,000.00 )/1000000 40.08 million offering underwritten by a syndicate led by BMO Capital Markets on a bought deal basis.
  • Golden Predator (TSX-V:GOM) closed a C$17.25 million offering underwritten by a syndicate led by Clarus Securities on a bought deal basis.
  • Lithium X Energy (TSX-V:LIX) closed a C$15.01 million offering underwritten by a syndicate led by Canaccord Genuity on a bought deal basis.
  • Perpetual Energy (TSX:PMT) closed a C$9 million offering on a best efforts basis.

 

Company news

Kootenay Silver Inc. (TSXV: KTN) C$0.28, Mkt Cap C$48.9 million

  • Began phase II leach testing of oxide and sulphide silver mineralization on bulk samples from the La Cigarra silver deposit in Chihuahua, Mexico, using the proprietary SILVOX Technologies process.
  • The program will determine if La Cigarra silver mineralization is amenable to low-cost heap leach processing using SILVOX.
  • Previous metallurgical work focused on conventional floatation to produce a concentrate that achieved recoveries up to 88% silver and produced a high-grade lead-silver concentrate containing 34% lead and 23,000 g/t silver.
  • Preliminary oxide mineralization metallurgical testing showed a significant improvement in silver recoveries using standard leaching with SILVOX versus standard leaching without it.
  • Kootenay aims to maximize la Cigarra’s economic viability through resource expansion and optimization.

Kootenay Silver is an exploration company with projects in the Sierra Madre region of Mexico and in British Columbia, Canada. Its leading properties are the La Cigarra silver project and the Promontorio Mineral Belt, in Chihuahua, Mexico and Sonora, Mexico. The Promontorio mineral belt includes the La Negra high-grade silver discovery and its Promontorio silver resource that is under option to Pan American Silver.

Conclusion:

If phase II leach testing of oxide and sulphide silver mineralization is successful, Kootenay will have a strong handle on a key cost component as it looks to prepare a preliminary economic assessment for La Cigarra going forward in addition to be able to factor in higher silver recoveries.

 

AuRico Metals Inc. (TSX: AMI) C$1.13, Mkt Cap C$178.6 million

  • Received a positive decision statement from the Canadian Environmental Assessment Agency (CEAA) and that the British Columbia Environmental Assessment Office (EAO) granted an Environmental Assessment Certificate for the Kemess underground project.
  • Obtaining these approvals was possible through support from the company’s First Nations partners: the Tsay Keh Dene, Kwadacha and Takla Lake First Nations.
  • The Keness project will require various additional normal course licenses and permits that are expected to be received early in 2018.
  • The March 2016 feasibility study for Kemess underground contemplates a low-cost panel caving operation with an initial 12-year mine life with total mine production of 1.4Moz of gold, 573Mlb copper and 4.5Moz of silver.  Gold-equivalent production for the first five years is expected to average 238koz/y. Project capex is estimated at US$452 million.

 Conclusion:

The main permitting hurdle to Kemess is now overcome giving the company a line-of-sight on being able to complete the paperwork and be in a position to make a construction decision.

 

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Oreninc Interview Series with Mickey Fulp - Episode 04

Our exclusive, bi-weekly interview series with Mickey Fulp, the Mercenary Geologist.

We discuss the recent developments in the markets, take a closer look at current financings and the overall sentiment.

Mickey, Kai and Paul sat down 60min after the doors of PDAC 2017 closed on Wednesday.

 

The interview was receorded on March 8th, 2017.

  Participants:
- Mickey Fulp, Mercenary Geologist
- Kai Hoffmann, CEO Oreninc
- Paul Harris, Staff Writer Oreninc

 

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Oreninc Index Update: March 13, 2017

ORENINC INDEX sees strong pullback as gold tests $1,200 USD

 

ORENINC INDEX - Monday, March 13, 2017

North America’s leading junior mining finance data provider

 

Follow us on facebook and find us on Twitter @Oreninc

AuRico Metals Corp. (TSX: AMI): Completed acquisition of Kiska Metals

Kootenay Silver Inc. (TSXV: KTN) new Oreninc sponsor

Last week index score: 94.43

This week: 65.62

The Oreninc Index saw a strong pullback in the week ending March 9, 2017 to 65.62 from 93.45 the previous week as gold pulled back and fell below the $1,200 USD per ounce before closing the week at $1,204 USD.

The first quarter of the year is traditionally the strongest financing window of the year, with deals dropping off in March after the PDAC (Prospectors and Developers Association Conference) in Toronto, and this year is playing out true to form. Total fund raising dollars announced fell significantly to C$97.1m from C$285.5m, a nine-week low, which included five brokered financings for a total of C$25.1m within which was one bought-deal financing for C$4.0m. The average offer size fell to a nine-week low as well, to C$2.1m from $6.5m, whilst the total number of financings announced increased slightly to 47, a two-week high. As a footnote, financings and therefore the Oreninc Index has historically experienced a hard fall in early March—what many people refer to as the PDAC hangover or PDAC curse—and usually recovers sometime in April. 

With gold having a weak week, the industry’s leading benchmark index, the van Eck GDXJ continued to retrench and is now up just 9.95% so far in 2017. In line with the gold pullback, the SPDR GLD ETF gold inventory sold of 825.22 tonnes, its lowest volume since February 6, 2017.

Despite strikes at three of the world’s largest copper mines (Escondida in Chile, Grasberg in Indonesia and as of Friday 10 March, joined by Cerro Verde in Peru) the copper price weakened to close at $2.60 per pound. With the Escondida strike passing thirty days (longer than the 25-day stoppage in 2006), management is now making overtures to the strikers to come to terms. Before these strikes, many copper analysts were forecasting copper to enter supply deficit in 2017.

It is not just gold and copper that are down: WTI crude took a sharp drop and fell below $50 USD for the first time since December 2016.

The Dow Jones Industrial Average continued above the 20,000 mark and coming off a record 21,155 the previous week to close at closing at 20,902. The S&P/TSX Composite Index also continues at near historic high levels but down slightly on the prior week at 15,506.

The past week saw the behemoth PDAC conference that brought together over 24,000 people from the juniors, mid tiers and majors, finance people and suppliers. Attendance was up a couple of thousand over 2016 and juniors expressed greater optimism. Many have been able to finance in recent weeks and have sufficient cash for 12-18 months’ work. One takeaway is that money is starting to trickle down to explorers and not just in low political risk jurisdictions such as Canada and the US. There was standing room only in the presentations by Argentina, Ecuador and Colombia showing that appetite for risk is starting to return.

Whilst at PDAC, Oreninc also sat down with The Mercenary Geologist Mickey Fulp to record Podcast #4 in the ongoing series, to get his observations on the event, which will be available on www.oreninc.com shortly.

 

Financial news highlights

GoldQuest Mining Corp. (TSXV: GQC) announced and closed a strategic investment by Agnico Eagle Mines (TSX: AEM) via a non-brokered private placement of 38.1M shares at a price of C$0.60 for a total investment of C$22.86M that saw Agnico take a 15% stake in the explorer. The proceeds will be primarily used for exploration and development of properties in the Tireo Belt in Dominican Republic.

Highland Copper Company Inc. (TSXV: HI) (the “Company”) increased the size of the non-brokered private placement it originally announced in Novermber 2016 to up to 265.0M units at a price of $0.10 per unit. The original C$17M raise has been increased to $26.5M. The company expects to close a final tranche of the placement by March 17. So far the company has issued 49.4M units under the first and second tranches that closed on November 30, 2016 and February 22, 2017. Highland intends to use the proceeds to update the feasibility study on its Copperwood project, to complete the acquisition of the White Pine project and to settle its liabilities.

Summary:

  • Number of financings increased to 47, a two-week high
  • Five brokered financings were announced for $25.1m, a nine-week low.
  • One bought-deal financings were announced for $4.0m, a two-week high.
  • Total dollars decreased to $97.1m, a nine-week low.
  • Average offer size lower to $2.1m, a nine-week low.

 

Major Financing Openings:

  • Goldquest Mining Corp. (TSXV:GQC) opened a $22.86 million offering on a strategic deal basis.
  • Renaissance Oil Corp. (TSXV:ROE) opened a $10 million offering underwritten by a syndicate led by Haywood Securities on a best efforts basis. Each unit includes one warrant that expires in 27 months. The deal is expected to close on or about March 29, 2017.
  • White Gold Corp. (TSX-V:WGO) opened a $10 million offering underwritten by a syndicate led by GMP Securities on a best efforts basis. The deal is expected to close on or about March 21, 2017.
  • Goldstrike Resources Ltd. (TSX-V:GSR) opened a $6.03 million offering on a strategic deal basis. Each unit includes one warrant that expires in 48 months.

Major Financing Closings:

  • Itafos (TSXV:IFOS) closed a $45.93 million offering underwritten by a syndicate led by Raymond James on a best efforts basis.
  • Goldquest Mining Corp. (TSXV:GQC) closed a $22.86 million offering on a strategic deal basis.
  • Ascendant Resources Inc. (TSXV:ASND) closed a $20.04 million offering underwritten by a syndicate led by Eight Capital on a best efforts basis. Each unit includes a 1/2 warrant that expires in 60 months. 
  • IDM Mining Ltd. (TSX:IDM) closed a $15.25 million offering on a strategic deal basis.

Company news

AuRico Metals Corp (TSX: AMI) C$1.00, Mkt Cap C$149.7 million

  • Completed acquisition of Kiska Metals Corp.

  • Kiska's royalty portfolio consists of six royalties including on the East Timmins and Boulevard properties operated by Kirkland Lake Gold and Independence Gold

  • Kiska's six exploration projects present organic royalty creation opportunities.

  • AuRico now has a portfolio of 17 royalties

AuRico Metals is a mining development and royalty company the gold-copper Kemess property in British Columbia, Canada that hosts the feasibility-stage Kemess Underground project and the Kemess East exploration project. AuRico's royalty portfolio includes a 1.5% NSR royalty on the Young-Davidson gold mine and a 2% NSR royalty on the Fosterville mine.

Conclusion: The Kiska Metals acquisition provides royalty diversification and long-term growth potential through assets located in North America. It also sees the company grow its exploration portfolio in British Columbia within relative proximity to Kemess.

 

Kootenay Silver Inc. (TSXV: KTN) C$0.30, Mkt Cap C$51.5 million

Oreninc welcomes Kootenay Silver as a sponsor. Kootenay is an exploration company with projects in the Sierra Madre region of Mexico and in British Columbia, Canada. Its leading properties are the La Cigarra silver project and the Promontorio Mineral Belt, in Chihuahua, Mexico and Sonora, Mexico. La Cigarra hosts a resource estimate of 18.54Mt containing 51.47Moz of silver in the Measured & Indicated categories grading 86.3 g/t Ag & 4.45Mt tonnes containing 11.46Moz Ag in the Inferred category grading 80 g/t Ag. The Promontorio mineral belt includes the La Negra high-grade silver discovery and its Promontorio silver resource that is under option to Pan American Silver. The Promontorio silver resource hosts a resource estimate of 44.5Mt containing 92Moz AgEq in the Measured & Indicated categories grading 64.3 g/t AgEq & 14.6Mt containing 24.3Moz AgEq in the Inferred category grading 52 g/t AgEq.

 

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Oreninc Index Update: March 6,2017

ORENINC INDEX falls below 100 as gold falters

 

ORENINC INDEX - Monday, March 6, 2017

North America’s leading junior mining finance data provider

 

Follow us on facebook and find us on Twitter @Oreninc

 

NuLegacy Gold Corp. (TSXV: NUG): Provided guidance on its 2017 exploration and corporate programs.

Last week index score: 107.24

This week: 93.45

The Oreninc Index retrenched in the week ending March 2, 2017 to 93.45 from 107.24 the previous week as gold pulled back from $1,249 USD per ounce the previous week to $1,234 USD.

Total fund raising dollars announced rose to C$285.5m from C$175.3m, a seven-week high, which included nine brokered financings for a total of C$9.3m within which were one bought-deal financings for C$0.4m. However, the average offer size almost doubled to C$6.5m from $3.5m, whilst the total number of financings announced pulled back further to 44, a four-week low.

Whilst the gold price had a strong week, the industry’s leading benchmark index, the van Eck managed GDXJ pulled back sharply and is now just 12.61% so far in 2017. However, the SPDR GLD ETF gold inventory grew slightly to 845.32 tonnes, its highest volume since December 15, 2016.

The copper price remained firm to close at $2.71 per pound despite the strike at Escondida, the world’s largest copper mine, completing 23 days. Escondida produces about 1.1 million tonnes a year of copper, some 5% of the world’s copper production.

The Dow Jones Industrial Average continued to plough ahead in record territory, breaking through the 21,000-mark reaching a mid-week peak of 21,155 and closing at 21,005. The S&P/TSX Composite Index had an even week closing at 15,536.

The past week saw Canadian bank BMO host its Metals and Mining event where major miners and advanced exploration company went speed dating with fund managers, and now the behemoth PDAC conference gets underway in Toronto on Sunday March 5 that will bring together tens of thousands of people from the juniors, mid tiers and majors, finance people and suppliers.

Financial news highlights

Royalty company Altius Minerals Corp (TSX:ALS) linbed up additional cash with which to make deals after entering into a letter agreement with Fairfax Financial Holdings Ltd under which Fairfax will make an up to C$100 million private placement investment for 5% preferred securities issuable in tranches of not less than C$25 million by no later than December 31, 2017. The proceeds will be used for investing in opportunities it identifies within the mining and minerals sector and for general corporate purposes.

Leagold Mining Corp (TSX-V:LMC.H) had a big week from a finance point of view. It executed a non-binding term sheet with Orion Resources Partners to provide US$200 million in cash through a senior secured five-year loan facility for US$150 million and an equity private placement of US$50 million after receiving strong interest in an equity component rather than doing a US$200 million debt financing. A previously announced subscription receipt offering is now expected to raise gross proceeds of C$175 million. The proceeds will be used to finance the acquisition of the Los Filos Mine.

Summary:

  • Number of financings lowered to 44, a four-week low
  • Nine brokered financings were announced for $9.3m, a four-week low.
  • One bought-deal financings were announced for $0.4m, an eight-week low.
  • Total dollars rose to $285.5m, a seven-week high.
  • Average offer size almost doubled to $6.5m, a five-week high.

 

Major Financing Openings:

  • Altius Minerals Corp. (TSX:ALS) opened a $100 million offering on a strategic deal basis. Each unit includes 1 warrant that expires in 60 months.
  • Blackbird Energy (TSX-V:BBI) opened a $80 million offering underwritten by a syndicate led by Cormark Securities Inc. on a best efforts basis. The deal is expected to close on or about March 22, 2017.
  • Leagold Mining Corp (TSX-V:LMC.H) opened a $50 million offering on a strategic deal basis.
  • Knick Exploration Inc. (TSX-V:KNX) opened a $10.15 million offering on a best efforts basis. The deal is expected to close on or about March 15, 2017.

Major Financing Closings:

  • Osisko Mining Inc. (TSX:OSK) closed a $82.2 million offering underwritten by a syndicate led by BMO Capital Markets on a bought deal basis.  
  • INV Metals Inc. (TSX:INV) closed a $27.6 million offering underwritten by a syndicate led by GMP Securities LP on a bought deal basis.  
  • Serinus Energy Inc. (TSX:SEN) closed a $25.2 million offering underwritten by a syndicate led by GMP FirstEnergy on a best efforts basis.  
  • JDL Gold Corp. (TSX-V:JDL) closed a $20 million offering underwritten by a syndicate led by Haywood Securities Inc. on a bought deal basis.  

Company news

NuLegacy Gold Corp (TSXV: NUG) C$0.26, Mkt Cap C$77.6 million

  • Provided guidance on its 2017 exploration and corporate programs.
  • Initial 2017 drilling will consist of 38 to 40 holes totalling about 10,500m focused on determining the extent of the gold mineralization in the Avocado deposit, exploring the Deep Iceberg, VIO and Jasperoid Basin anomalies, and expanding the established near-surface Iceberg deposits.

  • 65% will consist of deeper drilling to explore for additional deposits and 35% will concentrate on expanding the gold footprint of Iceberg's near-surface deposits.

  • Further geophysical and geochemical surveys will be completed in areas identified prospective for mineralization by 2016 geologic mapping and survey programs to generate additional drill targets.

  • Once new deposits have been confirmed/discovered, budget approvals will be sought for immediate drilling program expansion.

 

NuLegacy Gold is an advanced stage Nevada exploration company focused on expanding its Carlin-style near-surface Iceberg oxide gold deposit. It is focused on establishing a multi-million ounce near-surface oxide gold resource at Iceberg that grades 0.9 g/t to 1.1 g/t Au during the 2017-2018 drilling seasons and expanding the gold endowment size of the recently discovered Avocado gold deposit;

 

Conclusion: NuLegacy has an aggressive exploration plan to advance its aim of selling or merging with a qualified producer.

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Oreninc Interview Series with Mickey Fulp - Episode 03

Our exclusive, bi-weekly interview series with Mickey Fulp, the Mercenary Geologist.

We discuss the recent developments in the markets, take a closer look at current financings and the overall sentiment.

The interview was receorded on February 27th, 2017.

 Participants:
- Mickey Fulp, Mercenary Geologist
- Paul Harris, Staff Writer Oreninc

 

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