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Oreninc Index Rises to Respectability 

The Oreninc Index improved to a respectable level for the week ending August 20, 2015. Total dollars announced jumped to $113.1m, a seven-week high. Two brokered financings were announced for $27.3m, a seven-week high; one bought deal financing was announced for $26.3m, a nine-week high.

Deal making was extremely light for the week, with the biggest news being the sale of Goldman Sach’s (NYSE:GS) Colombian coal mining division to Murray Energy for an undisclosed amount. With this sale, Goldman no longer has any physical asset holdings. Gold had a fantastic week as markets around the world faced losses due to concerns over the Chinese economy. That said, due to the very same concerns most other commodities had a difficult week.

With markets having a rough go of it around the globe, we’ll see if these increased financing activity numbers can be built on, or if investors will be skittish to invest in markets that, at this point, are relatively unstable. 

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Summary:

  • Number of financings increased to 23, a three-week high.
  • Two brokered financings were announced for $27.3m, a seven-week high.
  • One bought deal financing was announced for $26.3m, a nine-week high.
  • Total dollars exploded to $113.1m, a seven-week high.
  • Average offer size jumped to $4.9m, a 14-week high.  

Major Financing Openings:

  • Africa Oil Corp (TSX:AOI) opened a $65.46 million offering on a strategic deal basis.    
  • Klondex Mines Ltd. (TSX:KDX) opened a $26.27 million offering underwritten by a syndicate led by GMP Securities LP on a bought deal basis. The deal is expected to close on or about September 10, 2015.
  • Alphamin Resources Corp. (TSX-V:AFM) opened a $6.5 million offering on a best efforts basis.  Each unit includes a 1/2 warrant that expires in 12 months. The deal is expected to close on or about August 31, 2015.
  • Kicking Horse Energy Inc. (TSX-V:KCK) opened a $4 million offering on a best efforts basis.    

Major Financing Closings:

  • Heron Resources Ltd. (TSX:HER) closed a $6.8 million offering on a strategic deal basis.    
  • Search Minerals Inc. (TSX-V:SMY) closed a $0.67 million offering on a best efforts basis.  Each unit includes 1 warrant that expires in 24 months.
  • Anfield Resources Inc. (TSX-V:ARY) closed a $0.55 million offering on a best efforts basis.  Each unit includes 1 warrant that expires in 24 months.
  • Macarthur Minerals Ltd. (TSX-V:MMS) closed a $0.51 million offering on a best efforts basis.

 

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Oreninc Index Remains Frozen at Bottom

The Oreninc Index remained frozen at the bottom for the week ending August 13, 2015. Total dollars announced dropped to 41.3m, a two-week low. One brokered financing was announced for 0.3m, a four-week low; no bought deals were announced for the eighth straight week. 

The top deal-making news of the week were reports that Anglo American plc (LON:AAL) was on the verge of selling two of their Chilean copper assets to an unnamed British fund for somewhere between $500m-$1bn. Gold had a stellar week, reaching a three-week high on the back of Chinese currency concerns. Those same concerns did not seem to affect iron ore negatively, as it stayed mostly flat for the week, though that may have been somewhat offset by concerns of iron ore shipments out of China’s Tianjin port, which suffered an explosion that affected operations on Wednesday.

As we move closer to Labor Day, the low index numbers are starting to become more and more of a concern for what it could mean for fall performance.

 

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 Oreninc Index Bottoms Out

The Oreninc Index bottomed out for the holiday shortened week ending August 6, 2015. Total dollars announced jumped to $53m, a five-week high. Two brokered financings were announced for $0.8m, a two-week high; No bought deals were announced for the seventh straight week.

The largest deal of the week was OceanaGold’s (TSX:OGC) agreement to acquire Romarco Minerals Inc (TSX:R) for $856m in stock. OceanaGold will own 51% of the resulting company, with the remaining 49% being controlled by Romarco. Gold stayed mostly flat throughout the week, while iron ore had another positive performance.

Although this week's numbers were rough, the five-week moving average, which has hit its lowest point YTD, is potentially a greater concern. Let’s see if things can pick up, particularly with regards to the number of deals announced, as we head into a full week.

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Oreninc Index Stays Low

The Oreninc Index stayed low for the week ending July 3, 2015. Total dollars announced fell to $29.3m, an 18-week low. One brokered financing was announced for $0.75m, a two-week low; no bought deals were announced for the sixth straight week.

The largest deal of the week was Barrick Gold’s (NYSE:ABX) sale of a 50% stake in their Zaldivar copper mine in Northern Chile to Antofagasta PLC (LON:ANTO) for just over $1bn in cash. Gold remained flat after last week’s steep fall, and iron ore had a surprisingly decent week.

As the summer lull continues, one of the bigger issues, specific to this year’s downturn, is the dramatic decrease in the number of announced and completed bought deals; with this being the sixth straight week of no bought deals announced. While a decline in broker activity during the summer is not unusual, the decline in bought deals completed this year is. It will be interesting to see if this is a summer-only shift that picks back up in the fall.

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Oreninc Index Remains in Funk 

The Oreninc Index remained in a funk for the week ending July 23, 2015. Total dollars announced jumped to $45.4m, a two-week high. Three brokered financings were announced for $4.6m, a three-week high; no bought deals were announced for the fifth straight week.

Deal-making was mostly quiet; Royal Gold (NASDAQ:RGLD) announced its agreement with New Gold Inc. (NASDAQ:NGD) to acquire a percentage of the gold and silver production from New Gold’s Rainy River project for $175m. Gold fell even further into its five-year low during the week, before recovering slightly. Iron ore also had a down week.

The summer funk appears to be in full swing and this season seems particularly bleak considering the fall in commodity prices and chinese equities. While this may be a particularly bad year, it is important to remember that this summer lull is an unsurprising trend in the annual financing cycle.

 

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