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Orenthink

On April 27th, Benjamin Cox discussed the role of junior exploration companies in a changing market. Mr. Cox focused on the current state of the fundraising market (including data from Q1 2015), why traditional structures no longer work, and what changes management teams should consider in order to survive. 

Please click on the image below to view the presentation.

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Oreninc Index Falls to Four Week Low

The Oreninc Index fell to a four-week low for the week ending April 23, 2015. Total dollars increased to $39.5m on 27 financings, both two-week highs. Two brokered financings were announced for $4.3m, a four-week low. No bought deals were announced for the first time in four weeks.

A number of smaller and mid-sized deals were announced for the week, the largest being the finalization of Coeur d'Alene Mines Corp’s (NYSE:CDE) purchase of Paramount Gold and Silver Corp. (TSX:PZG) for $146m. Commodities for the week were mixed, with gold dropping marginally and iron ore having a strong week.

It’s difficult to remain optimistic when the Index’s levels fall as they did, however considering the increase in money raised and the number of deals, we anticipate some marginal increase in activity as companies gear up for summer exploration.

 

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Oreninc Index Take a Normalizing Dive

The Oreninc Index took a normalizing dive for the week ending April 16, 2015. Total dollars announced fell to $29.7m on 16 deals, three- and four-week lows respectively. One brokered and one bought deal were announced for $13.8m, three-week lows for both.

Deal-making was up again this week, with the planned merger between Alamos Gold (TSX:AGI) and AuRico Gold (TSX:AUQ) being the largest confirmed deal. Shareholders of both companies will each own roughly 50% of the merged company in the US$1.5b deal. Commodities had another up and down week, with gold staying mostly flat and iron ore having a nice couple of days to begin the week before coming back down towards the end.

Last week’s Index performance and the increased level of deal-making in recent weeks is great to see considering the lackluster year, however it’s unsurprising that the Index has fallen to it’s trending level.

 

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Oreninc Index Explodes to 25-Week High

The Oreninc Index exploded to a 25-week high in the holiday-shortened week ending April 9, 2015. Total dollars announced jumped to $166.1m on 32 financings, eight- and six-week highs respectively. Five brokered and bought financings were announced for $138m, eight-week highs for both.

Deal-making was robust with one of the biggest deals of the year (so far) being announced—Royal Dutch Shell’s (NYSE: RDS) acquisition of BG Group (LON:BG) for a cash and stock deal worth $70b (USD). Commodities had another up and down week, with gold gaining a bit before falling below $1,200 an ounce. Oil prices, on the other hand, rose for the fourth straight week.

While one week’s performance is never going to move the needle enough to make up for what has been, up to this point, a horrific financing season, it’s great to finally see a bright spot in the Canadian natural resources space.

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Oreninc Index Crawls Back Up

The Oreninc Index crawled back up for the week ending April 2, 2015. Total dollars announced rose to $38.3m on 23 deals, three and five week highs respectively. Two brokered financings were announced for $17.4m, one of which has yet to announce an offer size, a two-week high. One bought deal was announced for $17.4m, a two-week high.

The only major deal from the week was Israel Chemicals Ltd. (NYSE:ICL) agreeing to purchase Allana Potash Corp. (TSX:AAA) for $137m CDN. Commodities had a roller coaster of a week, with iron ore dropping 15% in just one week and gold moving up and down before settling right around $1,200. Oil was down slightly on news that a framework of an Iranian nuclear deal had been achieved, though it did not drop as much as analysts had been expecting.

While not great, seeing an improvement over last week’s horrendous performance is a positive, even if the five-week moving average plunged further than last week’s multi-year low.

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