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Oreninc Index Update: August 6, 2015

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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 Update: July 30, 2015

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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 Update: July 23, 2015

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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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Oreninc Index Update: July 16, 2015

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Oreninc Index Avoids 16-Week Low

The Oreninc Index stayed flat, narrowly avoiding a 16-week low for the week ending July 16, 2015. Total dollars announced continued to fall ending at $35.8m, a 16-week low. No brokered deals were announced for the second time in two weeks; no bought deals were announced for the sixth time in eight weeks.

The natural resource market continues to take a beating from all sides. The recent fall in chinese equities has done the industry no favors as metals were sold in order fund margin calls. Additionally, on Friday, gold fell to a five-year low.

At this point, the fundraising markets have pretty well dried up. Hopefully a few companies have raised enough for summer programs and will have exciting results come fall. 

 

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Oreninc Index Update: July 9, 2015

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Oreninc Index Drops to 15-Week Low

The Oreninc Index dropped to a 15-week low for the week ending July 9, 2015. Total dollars announced fell to $41.8m, an 11-week low. No brokered deals were announced for the first time in 26 weeks; No bought deals were announced for the fifth time in seven weeks.

The most notable deal of the week was the announcement that Fission Uranium Corp. (TSX:FCU) and Denison Mines Corp. (TSX:DML) would merge to create a new company called Denison Energy Corp. worth around $900m. Gold stayed down for the week, falling slightly. Iron ore had an up and down week, but ended higher on news that the Chinese government would take regulatory measures to attempt to stymie the fall of Chinese markets.

While the spring months can be looked back on as a relatively positive financing season, we have clearly entered the the summer lull now that we have fully entered July.

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Oreninc Index Update: July 2, 2015

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Oreninc Index Stays Afloat during Holiday-Shortened Week

The Oreninc Index stayed afloat during the holiday-shortened week ending July 2, 2015. Total dollars increased to $110.4m, a four-week high. Two brokered financings were announced for $30.9m, a two-week high; no bought deal financings were announced for the fourth time in six weeks. 

The main deal-making news of the week included reports of “serious talks” between X2 Resources and Rio Tinto plc (NYSE:RIO) regarding X2’s interest to acquire some of Rio’s Australian coal assets. The deal, said to still be in the early stages, would be worth multiple billions of dollars. Gold was down on the week, reaching the lowest level seen since March. Iron ore and copper were also down for the week.

The strong financing numbers were a welcomed surprise considering the holiday-shortened week.

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Oreninc Index Update: June 25, 2015

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Oreninc Index Falls to Nine-Week Low

The Oreninc Index fell to a nine-week low for the week ending June 25, 2015. Total dollars dropped $85.4m, a two-week low. One brokered financing was announced for $1m, a 24-week low; no bought deals were announced for the third time in five weeks.

The largest deal for the week was Glencore Xstrata’s (LON:GLEN) sale of their Cosmos Nickel Complex to Western Areas Ltd (ASX:WSA) for $23.3m. Gold came back down for the week, declining well below $1,200 an ounce. Iron ore recovered and increased marginally.

It appears that the yearly slowdown that the official start of summer brings may finally be upon us. 

 

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Oreninc Index Update: June 18, 2015

Oreninc Index
b2ap3_thumbnail_Index-Heade2-6-18-15.png Oreninc Index Jumps to Four-Week High The Oreninc Index jumped to a four-week high for the week ending June 18, 2015. Total dollars announced rose to $99.1m, a two-week high....
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Oreninc Index Update: June 11, 2015

Oreninc Index

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Oreninc Index Falls to Two-Week Low

The Oreninc Index fell for the week ending June 11, 2015. Total dollars announced dropped to $25.6m, a two-week low. Seven brokered deals were announced for $25.6m, a three-week high; no bought deals were announced for the second time in three weeks.

Deal making was heavier, with the biggest news coming from Newmont Mining Corp (NYSE:NME) and their purchase of the Cripple Creek & Victor Gold Mine from AngloGold Ashanti Ltd. (NYSE:AU) for US$820m cash, in addition to a cut of future returns from the mine’s underground operations. Iron ore had another fantastic week, almost reaching a five-month high, while gold had another hard week, hitting a 12-week low.

The weak financing market should not come as a surprise now that summer has arrived.

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Oreninc Index Update: June 4, 2015

Oreninc Index

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Oreninc Index Creeps up to Two-Week High

The Oreninc Index crept up to a two-week high for the week ending June 4, 2015. Total dollars exploded to $141m, a three-week high. Three brokered financings were announced for $20m, a two-week high; and two bought deal financings were announced for $5m, also a two-week high. 

The main deal-making news from the week was Premier Gold Mines Limited’s (TSX:PG) completion of their acquisition of 40% of Goldcorp’s (NYSE:GG) South Arturo Mine Project for US$20m and other considerations. Gold had a rough week after positive employment data out of the United States. Iron ore, on the other hand, reached a three-month high in what has been a surprisingly good couple months for the ferrous metal.

While numbers are still not where the industry as a whole would like them to be, both from a financing and commodity price perspective, this spring has given us some hope that there may be some light at the end of the tunnel. That said, it is hard to be too confidant as the warm months approach and activity is bound to, as is has in the past, slow down during July and August.

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