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Orenthink

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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Oreninc Index Falls Even Further

The Oreninc Index fell further to an overall five-week low for the week ending September 18, 2014. Total dollars fell were at $58.5m, a two-week high. Four brokered deals were announced for $8.7m, a two-week high. No bought deals were announced for the seventh time since the beginning of summer. The most shocking aspect of September so far has been the abysmal broker activity; it appears that bankers have stayed on the links to get in a couple rounds before the leaves turn.

Deals were light this week, as there were no big announcements from any majors. Juniors had some minor announcements, with Pacific Ridge Exploration (TSX-V:PEX) entering into an option agreement with Centerra Gold (TSX:CG) for their King Solomon Gold project in Nevada.

It is still early, and the poor performance of the past few weeks may be a result of a slightly stronger than anticipated July. Still, with the industry now in its third year of a down-turn, the chances that fundraising performance in the space will be improved in any significant way over last year is getting slimmer and slimmer with each passing week.

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Oreninc Index Falls to Four-Week Low

The Oreninc Index fell to a four-week low for the week ending September 11, 2014. Total dollars fell to $58.3m, a four-week low. Two brokered deals were announced for $5.5m, a four-week low; no bought deals were announced for the second time in six weeks. 

Deals for the week were stronger, with Agnico-Eagle Mines (TSX: AEM) agreeing to buy Cayden Resources (TSX-V: CYD) for $205m. Taseko Mines (TSX: TKO) agreed to buy Curis Resources (TSX: CUV) in an all-stock deal valued at $80m. Both deals are still subject to shareholder approval. 

Junior financing activity is down, but it appears that majors are at least out and trying to make things happen. While too early to tell if this is just a summer hang-over or a real issue, it is not a good sign that a high number of deals with a low number of overall dollars were announced. Juniors may be out trying to raise money, but it seems they just aren’t able to find investment appetite.

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 Benjamin discusses the silver lining present in any recession, even one as tough as this, and suggests not focusing on long-term pain in order to take advantage of what opportunities exist.

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