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Oreninc Index: June 18, 2018

ORENINC INDEX falls financing drought continues

ORENINC INDEX - Monday, June 18th 2018

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Last week index score: 36.89 (updated)

This week: 29.73

 

The Oreninc Index fell in the week ending June 15th, 2018 to 29.73 from an updated 36.89 a week ago as the financing drought continued, even though the faintest broker action returned.

Gold briefly broke back above the US$1,300/oz mark during the week before being firmly shoved back down below it Friday as the US dollar index reached an 11-month high. Gold had shrugged off news from the latest US Federal Reserve Open Market Committee (FOMC) meeting on Wednesday that as expected raised US interest rates by 0.25%, but that also indicated the likelihood of two more rate rises this year, to the surprise of many commentators.

Gold’s fall comes despite increasing concern about the possibility of a trade war after US president Donald Trump levied US$50 billion of new tariffs on Chinese imports. China is expected to retaliate with tariffs of its own against US imports and the Trump administration indicated that it is preparing even more tariffs against China.

The oil market looks set for a showdown at the next OPEC meeting with Russia and Saudi Arabia looking to increase production whilst Iran, Iraq and Venezuela looking to resist this. Crude prices have been heading higher after reports that Venezuela is about a month behind delivering crude to customers due to a backlog at its export terminals. Reuters reported that tankers are sitting off the country’s coast waiting to load 24M-plus barrels of crude.

On to the money: total fund raises announced fell to C$45.8 million, a three-week low, which included four brokered financings for C$8.0 million, three-week high and three bought deal financings for C$5.0 million, also a three-week high. The average offer size remained at C$2.0 million, whilst the number of financings fell to 19, a three-week low.

Gold closed the week at US$1,278/oz from US$1,298/oz a week ago. Gold is now down 1.80% this year. The US dollar index closed up at 94.78 from 93.53 from 94.15 a week ago. Despite the fall in the gold price, the van Eck managed GDXJ closed down a smidge at US$32.71 from US$32.78 a week ago. The index is down 4.16% so far in 2018. The US Global Go Gold ETF took more of a hit to close down at US$12.79 from US$12.95 a week ago. It is now down 1.66% so far in 2018. The HUI Arca Gold BUGS Index closed down at 177.88 from 178.83 last week. The sell-off in the SPDR GLD ETF came to an end with its inventory remaining at 828.76 tonnes, the same as a week ago.

 

In other commodities, silver closed down at US$16.56/oz from US$16.78/oz a week ago. Copper’s also saw a big loss it closed down at US$3.13/lb from US$3.30/lb last week. Oil continued to lose ground as it closed down at US$64.38 a barrel from US$65.74 a week ago.

The Dow Jones Industrial Average had a losing week to close at 25,090 from 25,316 last week. Canada’s S&P/TSX Composite Index saw a winning week to close up at 16,314 from 16,202 the previous week. The S&P/TSX Venture Composite Index closed down at 754.40 from 775.22 last week.

 

Summary:

·       Number of financings plunged to 19, a three-week low.

·       Four brokered financings were announced this week for C$8.0m, a three-week high.

·       Three bought-deal financings were announced this week for C5.0m, a three-week high.

·       Total dollars lowered to C$45.8m, a three-week low.

·       Average offer size increased to C$2.0m, a two-week high.

 

 

Financing Highlights

 

Sandspring Resources (TSXV:SSP) announced a non-brokered private placement to raise C$9.0 million.

·       36.0 million units @ C$0.25

·       Each unit consists of one share and a warrant exercisable @ C$0.40 for five years.

·       Gran Colombia Gold to subscribe for C$4.0 million

·       Proceeds to be used to complete a transaction with Gran Colombia Gold, to develop and advance an exploration for the Chicharron project, to complete a feasibility study for the Toroparu project in Guyana and related hydroelectric project

·       Sandspring entered into a LOI to acquire the Guia Antiqua mine in Antioquia, Colombia from vendors including Gran Colombia Gold.

 

 Major Financing Openings

 

·       Sandspring Resources (TSXV:SSP) opened a C$ 9 million offering on a best efforts basis. Each unit includes a warrant that expires in 60 months.

·       Belvedere Resources (TSXV:BEL) opened a C$ 6.5 million offering on a best efforts basis.

·       Arrowstar Resources (TSXV:AWS) opened a C$ 5 million offering on a best efforts basis.

·        Horizon Petroleum (TSXV:HPL) opened a C$ 5 million offering on a best efforts basis.

 

Major Financing Closings

·       Mirasol Resources (TSXV:MRZ) closed a C$ 8.64 million offering on a best efforts basis. Each unit included half a warrant that expires in two years.

·       Wealth Minerals (TSXV:WML) closed a C$ 6.91 million offering on a best efforts basis. Each unit included half a warrant that expires in two years.

·       Erdene Resource Development (TSX:ERD) closed a C$ 4.12 million offering on a best efforts basis. Each unit included a warrant that expires in 30 months.

·       Rambler Metals and Mining (TSXV:RAB) closed a C$ 3.82 million offering underwritten by a syndicate led by Lombard Odier Asset Management on a best efforts basis.

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