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Episode 10

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Oreninc Index Update: August 21, 2017

ORENINC INDEX falls as vacation season continues

 

ORENINC INDEX - Monday, August 21th, 2017

North America’s leading junior mining finance data provider

 

Follow us on facebook and find us on Twitter @Oreninc

Last week index score: 46.26

This week: 29.82

The Oreninc Index fell in the week ending August 18th, 2017 to 29.82 from 46.26 the previous week with the markets very quiet as vacation season continues. The index is a little odd this week as it is down although several of the metrics increased, the reason being the lack of brokered deals this week and the four-day trading week last week that artificially boosted last week’s score. In addition, many open deals extended their closing dates.

Total fund raises announced increased to C$45.3 million, a two-week high, which included one brokered financing for C$4.2 million, a four-week low, and no bought-deal financings. The average offer size grew to C$2.1 million, a six-week high, whilst the total number of financings announced increased to 22, a two-week high.

On the political front, omissions can have far-reaching consequences as US president Donald Trump is find out. His failure to speak out against a white supremacist rally in Virginia has seen an exodus of business leaders from his CEO think-tanks (prompting him to close them) and being able to do what most presidents cannot: see Republicans and Democrats unite in non-partisan agreement on an issue. Interestingly, markets reacted more to this Trump news than about the puerile bellicose exchange the previous week with North Korea.

Despite relatively low levels of activity, gold had an interesting and strong week including briefly breaking through the US$1,300/oz mark, benefitting from mixed opinions among members of the Federal Open Market Committee on inflation and future interest rate hikes, which were interpreted to mean that future rate hikes will come later rather than sooner. Gold also benefitted from flight-to-safety moves as the stock market sold off as attention focused on the US president.

Gold closed the week at US$1,284/oz down slightly from US$1,289 last week. The van Eck managed GDXJ also retrenched slightly and is now up 5.8% so far in 2017 at US$33.39. The recently launched US Global Go Gold ETF posted gains to close at US$12.43 from US$12.40 last week, whilst the inventory of the SPDR GLD ETF poseted gains to close the week at 799 tonnes from 787 tonnes the previous week.

In other commodities, silver bounced over and below the US$17/oz mark and closed just under at US$16.98/oz from US$17.11/oz. The Comex copper price continues to hover just under the US$3/lb level and closed up at US$2.96/lb from US$2.91/lb the previous week. Zinc is on a charge with the LME price breaking through the US$3,000/t level to close at US$3,124/t from US$2,896/t a week ago. Oil spent most of the week falling but recovered at week end to close slightly down at US$48.51 per barrel from US$48.82 per barrel last week.

The markets had enough of Trump’s guff this week, prompting a late-week sell-off that saw the Dow Jones Industrial Average fall to 21,674 from 21,858 last week. Canada’s S&P/TSX Composite Index mirrored the DJIA chart and also saw a late week sell-off to close down below 15,000 at 14,952 from 15,033 the previous week. The S&P/TSX Venture Composite Index increased to close at 769.76 from 762.81 the previous week.

Summary:

  • Number of financings increased to 22, a 2-week high.
  • One brokered financings were announced this week for $4.2m, a 4-week low.
  • No bought-deal financings were announced this week, an eleven-week low.
  • Total dollars grew to $45.3m, a 2-week high.
  • Average offer size also grew to $2.1m, a 6-week high.

 

Financial news highlights

Almonty Industries (TSXV: AII) opened and closed a C$6.4 million with its president & CEO Lewis Black to subscribe for 21.2 million shares @ C$0.30.

  • Upon closing Black holds 36.5 million shares representing about 22.55% of the issued and outstanding stock.
  • Proceeds will be used for the equity portion of the development financing necessary for the Sangdong mine project in China
  • Sangdong was historically one of the largest tungsten mines in the world and was acquired in September 2015 through the acquisition of Woulfe Mining

 Orosur Mining (TSX: OMI) announced a financing to raise C$4.0 million through a placement of 16.7 million shares @ C$0.24.

  • The subscription was oversubscribed
  • Each subscription includes a warrant exercisable @ C$0.337 for three years
  • The net proceeds are to be used for drilling the Anzá gold project in Colombia

 

Major Financing Openings:

  • Ikkuma Resources (TSXV: IKM) opened a C$10.00 million offering on a best efforts basis. The deal is expected to close on or about September 1st.
  • Almonty Industries (TSXV: AII) opened a C$6.35 million offering on an insider only basis.
  • Orosur Mining (TSXV: OMI) opened a C$4.20 million offering underwritten by a syndicate led by Numis Securities on a best efforts basis. Each unit includes half a warrant that expires in 36 months.
  • American CuMo Mining (TSXV: MLY) opened a C$3.75 million offering on a best efforts basis. Each unit includes a warrant that expires in 24 months.

Major Financing Closings:

  • Red Eagle Mining (TSX: R) closed a C$29.96 million offering on a best efforts basis. Each unit included a warrant that expires in 60 months.
  • Peregrine Diamonds (TSX: PGD) closed a C$10.28 million offering on a best efforts basis.    
  • Almonty Industries (TSXV: AII) closed a C$$6.35 million offering on a insiders only basis.
  • GT Gold (TSXV: GT) closed a C$5.75 million offering underwritten by a syndicate led by Haywood Securities on a best efforts basis. 

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Closed Deals and Value of Closed Deals YTD 2017

Following a brisk start to the year when financings for mining and exploration in the Canadian financial markets hit a year-to-date high of around C$800 million in about 180 deals in February, have been on the back foot and trailing lower with each passing month through May where they hit a 2017 low of about $400 million in about 130 deals. Since then, the total amount raised has increased slightly to around $500 million in July in about 120 deals. The value of bought deal and brokered financings have followed a similar trajectory so far in 2017.

 

Several reasons are advanced for the development of financings so far in 2017. Some market observers suggest that many companies have funded in the past 12 months reducing their need to go to market. The reduced number of sub $1 million subsistence financings also suggests that companies are in better financial health. Furthermore, a lack of M&A activity meaning companies do not need to raise to fill their war chest; and the failure of gold to break back through the US$1,300 per ounce level has curtailed investor appetite in the junior market space.

 

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Oreninc Index Update: August 14, 2017

ORENINC INDEX falls as vacation season continues

 

ORENINC INDEX - Monday, August 14th, 2017

North America’s leading junior mining finance data provider

 

Follow us on facebook and find us on Twitter @Oreninc

 

Last week index score: 61.18

This week: 46.26

 

NuLegacy Gold (TSXV: NUG) commenced follow-up drilling to extend the gold mineralization discovered at North Iceberg.

 

The Oreninc Index fell in the week ending August 11th, 2017 to 46.26 from 61.18 the previous week with the markets very quiet as vacation season is in full swing and a public holiday to boot.

Total fund raises announced fell to C$36.6 million, a three-week low, which included four brokered financings for C$20.6 million, a two-week low, and no bought-deal financings. The average offer size remained at C$1.9 million, whilst the total number of financings announced fell to just 19, a five-week low.

US foreign policy dominated news headlines this week with US president Donald Trump exchanging bellicose rhetoric with his North Korean counterpart Kim Jong-Un about who could beat who the hardest, with residents of the Pacific island and US territory of Guam somehow getting into the crosshairs of Kim’s missiles.

Gold continued to strengthen to close at US$1,289/oz, inching towards the US$1,300/oz level that it has not since seen since November of 2016, and up from US$1,258/oz the previous week.

The increasing gold price was reflected in the van Eck managed GDXJ which is now up 6.6% so far in 2017 at US$33.63. The recently launched US Global Go Gold ETF also posted gains to close at US$12.40 from US$12.00 last week, whilst the inventory of the SPDR GLD ETF slid a little to close the week a smidge under 787 tonnes from a smidge over 787 tonnes the previous week.

In other commodities, silver reflected gold’s rise to break through US$17/oz again and almost added a dollar to close at US$17.11/oz from US$16.27/oz the previous week. The Comex copper price continues to inch up towards the US$3/lb level to close slightly up at US$2.91/lb up from US$2.88/lb the previous week. Oil gave back some of its recent gains to close slightly down at US$48.82 per barrel from US$49.58 last week.

The sky seems to be the limit for the Dow Jones Industrial Average hit a high of 22,118 early in the week then softened to close at 21,858 from 22,092 the previous week. Canada’s S&P/TSX Composite Index saw a steady week and then a drop off in the latter half to close down at 15,033 from 15,257 the previous week. The S&P/TSX Venture Composite Index increased to close at 762.81 from 765.68 the previous week.

Summary:

  • Number of financings fell to 19, a 5-week low.
  • Four brokered financings were announced this week for $20.6m, a 2-week low.
  • No bought-deal financings were announced this week, a ten-week low.
  • Total dollars decreased to $36.6m, a 3-week low.
  • Average offer size stayed the same at $1.9m, a 3-week high.

 

 

Financial news highlights

Nouveau Monde Graphite (TSXV: NOU) announced a private placement to raise C$10 million for working capital as it evaluates its Matawinie graphite project in Quebec, Canada.

  • Matawinie has a PEA that outlined an after-tax NPV of C$237.0 million at an 8% discount rate and after-tax IRR of 24.7% with a 25.7 years life of mine an capex of C$144.5 million.

 

Major Financing Openings:

  • Nouveau Monde Mining Enterprises (TSXV: NOU) opened a C$ =INT( 10,000,000.00 )/1000000 10 million offering underwritten by a syndicate led by Eight Capital on a best efforts basis. Each unit includes half a warrant that expires in 24 months. The deal is expected to close on or about September 8th.
  • Colorado Resources (TSXV: CXO) opened a C$7.24 million offering underwritten by a syndicate led by PearTree Securities on a best efforts basis. Each unit includes half a warrant that expires in 30 months. The deal is expected to close on or about August 31st.
  • North American Nickel (TSXV: NAN) opened a C$3.07 million offering on a best efforts basis. Each unit includes half a warrant that expires in 24 months.
  • Sable Resources (TSX: SAE.H) opened a C$3 million offering underwritten by a syndicate led by Haywood Securities on a best efforts basis. Each unit includes a warrant that expires in 24 months. The deal is expected to close on or about September 6th.

 

Major Financing Closings:

  • Wellgreen Platinum (TSXV: WG) closed a C$9.53 million offering on a best efforts basis. Each unit included half a warrant that expires in 60 months.
  • Japan Gold (TSXV: JG) closed a C$5 million offering on a strategic deal basis. Each unit included a warrant that expires in 60 months.
  • Kincora Copper (TSXV: KCC) closed a C$4.52 million offering on a best efforts basis. Each unit included half a warrant that expires in 24 months.
  • Wilton Resources (TSXV: WIL) closed a C$4 million offering on a best efforts basis.

 

Company news

NuLegacy Gold (TSXV: NUG) commenced follow-up drilling to extend the gold mineralization discovered at North Iceberg.

  • This prospective 375m west of the North Iceberg gold deposit, has been named the Serena zone.
  • Three holes will test extensions of the 50.3m @ 1.0 g/t gold discovery hole
  • Discovery hole SR17-01 encountered 123m of strongly brecciated jasperoid hosted in the Devonian Horse Canyon formation (an important host for gold in Carlin-type deposits in the Cortez gold-trend) starting at 133m deep.

Analysis

NuLegacy has completed this summer's program of wildcat drilling of geophysical and/or geochemical targets throughout its Red Hill property and whilst results are pending, it is taking the opportunity to further probe the recently discovered Serena zone prior to further defining and expanding the gold content of the Iceberg gold deposits this fall.

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Top 10 Financings of July 2017

July 2017 saw 138 financings close in the Canadian financial markets for C$656.1 million. 14 brokered financings closed in July for $249.1 million at an average size of $17.8 million, including ten bought deals for $186.8 million at an average size of $18.7 million.    

The top ten financings totalled $319.2 million with uranium company NexGen Energy taking top spot with $65.2 million. Gold companies took five of the top ten spots, with lithium, zinc and diversified one spot each.

#1 NexGen Energy $65.2 million

NexGen Energy (TSX: NXE) closed a US$50 million (C$65.2 million) stock placement with CEF Holdings and affiliates by selling 24.1 million shares @ C$2.70 to fund continuing exploration and development of its properties in the Athabasca Basin in Saskatchewan, Canada. The raise was part of a US$110 million financing with CEF Holdings and affiliates that in addition to the NexGen stock included US$60 million in unsecured convertible debentures. The debentures carry a 7.5% coupon over a 5-year term and are convertible into stock.

#2 Alio Gold $50.4 million

Alio Gold (TSX: ALO) raised $50.4 million to advance its Ana Paula gold project in Guerrero, Mexico via a bought deal underwritten by a syndicate led by Cormark Securities and Clarus Securities who purchased 8 million units @ $6.25. Each unit consisted of one share and half a warrant exercisable @ $8.00 for one year. The underwriters exercised their over-allotment option. Alio Gold was formerly Timmins Gold.

#3 New Pacific Holdings $44.1 million

New Pacific Holdings (TSXV: NUAG) closed financings for $44.1 million by selling 43.5 million subscription receipts @ US$0.80 for gross proceeds of US$34.8 million to pay the purchase price of the acquisition of Empresa Minera Alcira in Bolivia. Each subscription receipt is exercisable into one share. A subsidiary of Silvercorp Metals purchased 25 million subscription receipts. New Pacific subsequently raised an additional US$1.0 million by selling 1.3 million shares @ US$0.80. Alcira has seven silver-polymetallic mineral properties, the most significant of which is the Silver Sand property in Potosí department, which was drilled between 2012 and 2015.

 

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Oreninc Interview Series with Mickey Fulp - Episode 10

Recorded on July 27th in Vancouver and via Skype

July 27, 2017 // Our bi-weekly interview series with the Mercenary Geologist, Mickey Fulp.

Topics discussed
- Oreninc Index: Summer slow down
- Copper price rally and fundamentals
- Numbers of the weeks

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

VISIT www.oreninc.com
VISIT www.goldgeologist.com

 

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