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Oreninc Index Stumbles into Fall

The Oreninc Index stumbled for the week ending October 10, 2014. Total dollars announced dropped to $59.9m, a four-week low. Three brokered deals were announced for $42m, a three-week low. No bought deals were announced for the second time in four weeks. It seems that things are only getting worse in the financing market.

Deal making was active this week, with Lundin Mining (TSX:LUN) buying Freeport McMoRan (NYSE:FCX) 80% ownership interest in the Chilean Candelaria/Ojos del Salado mining operations for $1.8b in cash. Rumours also swirled of Glencore PLC (LON:GLEN) trying to merge with Rio Tinto Group (NYSE:RIO), though it appears Rio has rejected the reported all-stock offer made by Glencore. The deal would create the world’s largest publicly traded mining company.

While fundraising and equity numbers are increasingly getting worse and worse, the crazed deal making from this week is an interesting development. Maybe with companies out trying to make things happen, excitement will be spurred and investors will find value in what has been created. Nonetheless, it would not be wise to hold your breath in a market that has never looked worse during a time of the year that it generally looks its best. 

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Benjamin Cox discusses the dynamics of molybdenum supply and demand, focusing on its link to copper. 

Oreninc Index Remains the Same

The Oreninc Index remained stagnant for the week ending October 2, 2014. Total dollars announced rose to $160.4m, a four-week high. Three brokered deals were announced for $82m, a 14-week high; one bought deal was announced for $75m, a 14-week high.

While companies seem to have more confidence in their ability to raise money the past couple of weeks, deal-making remains light for Canadian juniors. That being said, majors were somewhat active with IAMGOLD Corp’s (TSX:IMG) sale of their Québécois Niobec niobium mine to the former Barrick Gold chief Aaron Regis’s private equity firm, Magris Resources. Newmont Mining Corporation (NYSE:NEM) and the Indonesian government agreed to a deal that allows the gold producer to resume copper exports from the country, ending the nine-month dispute.

Commodity prices had a rough week, with gold dropping to USD$1,200 for the first time in 2014, and platinum hitting a five-year low. Silver also had a rough time, hitting its lowest level in over four years.

While it’s nice to see some movement upwards in the financing market, we are far from out of the water yet. With commodity prices falling and numerous geopolitical issues dominating the headlines, it would not be surprising to see investors and promoters skittish. 

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Benjamin Cox discusses his issues with the lithium market, particularly the tendency to, more or less, count the chickens before they're hatched. 

Oreninc Index Finally Shows Life

The Oreninc Index finally showed some life for the week ending September 25, 2014. Total dollars announced rose to $147.1m, a three-week high. Brokered dollars rose to $49.4m on five deals, a three-week high; two bought deals were announced for $30.4, also a three-week high.

Deals were light again this week, with the big news in the space coming by way of falling metals prices. Both ends of the metal spectrum were down, with gold hitting its lowest price since January on Thursday before a strong rally late in the day, and iron ore hitting its lowest point in five years on Tuesday. BHP also announced consideration of a secondary listing of its recently announced spin out on the London Stock Exchange after investor backlash on its initial intentions to not do so.

While the Index is still not high enough to stay encouraged for very long, it’s good to see some real money announced and some bankers in the mix, as opposed to the total lack of activity that has existed since the beginning of the month. We’ll see if the upcoming first full week of fall will encourage companies to raise money and, more importantly, cause investors to have actual interest in what the juniors are saying.

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