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Oreninc Index Rises but Remains in Late Summer Slump

The Oreninc Index rose, but remained fully entrenched in the depths of a summer slump for the week ending August 21, 2014. While it increased a decent margin from the week before, this marks week three of the worst three-week stretch of the past few years. Total dollars jumped to $67.6m, a four-week high. Four brokered deals were announced for $18.5m, a three-week high; one bought deal was announced for $12.5m, a four-week high. 

The biggest news of the week came with BHP announcing their intentions to spin off non-core assets into a new company that will be run independently (100% of the shares of the new company will be distributed to their current shareholders). BHP says they are demerging assets that they consider not part of the future of their core business (many of these are operations gained in the 2001 merger). Shares fell 5% on the news. Gold prices hit a two-month low after the United States Federal Reserve’s July meeting minutes indicated that the organization was slightly more likely to increase interest rates if the economy continued to gain strength. The TSX-V composite index did rise marginally this week, though junior miner North American Nickel (TSX-V:NAN) fell 40% on news of their summer drill results.

While the Oreninc Index’s numbers are certainly disappointing, Labour Day can be seen in the distance, and with it the promise of bankers back at their desks and companies back trying to raise money. The question is whether this unusually poor August is just part of a lazy summer or a sign of an equally disturbing September to come.

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Benjamin Cox covers how to properly assess and value your project for those discussions with potential interested parties.

Oreninc Index Falls to Worst Week Since January 

The Oreninc Index fell to its lowest level since January for the week ending August 14, 2014. Total dollars raised fell to $35.8m, an eight-week low. No brokered or bought deals were announced, 33-week and four-week lows respectively. Obviously, returning to a full five-day trading week did not increase activity or inspire any real movement in the space.

Deals were light; among them was Anglo’s deal with Redhawk Resources, giving Anglo the right to buy into Redhawk’s Copper Creek project on one of the lone deals involving the majors this week. Still, with copper prices dropping to an eight-week low, this is probably a week the industry would like to forget. 

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Benjamin Cox discusses the perils of identifying quality projects, including how most projects will not/should not be able to survive a stringent vetting process.

Bonus: Benjamin also discusses how interns can be used for important (but time-consuming) work so that they actually learn something while also being valuable to the company.

Oreninc Index Falls to Seven-Week Low in Holiday-Shortened Week

The Oreninc Index fell to a seven-week low in the holiday-shortened week ending August 7, 2014. Total dollars for the week dropped to $50.2m, a seven-week low. One brokered deal, led by Macquarie, was announced for 10m shares on terms that are TBA. For the first time in three weeks, no bought deals were announced. The shortened week underscores the tone of what appears to be one of the quietest weeks of the year.

The tailings pond spill at the Mount Polley mine in British Columbia stoked fear across North America of a possible backlash against mine development. While it is easy to attribute a down week in financing activity on such a disaster, it could be premature blame given its marginal effect on the S&P/TSX-V composite index over the course of the week. That being said, disasters in the resources space have caused investor skittishness before (such as the down uranium and general resource markets after the Japanese tsunami in 2011) and it is not a stretch to think that shades of similar sentiment could appear in the coming weeks. 

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