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Oreninc Index: April 22, 2019

 

ORENINC INDEX increases as financings jump

ORENINC INDEX - Monday, April 22nd 2019

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Last week index score: 28.46

This week: 46.86

Aura Resources (TSXV:AUU) completed the sale of an 80% interest in its East Taviche project in Oaxaca, Mexico to Minaurum Gold.

The Oreninc Index fell in the week ending April 19h, 2019 to 46.86 from 28.46 a week ago as financings jump in number and value, although with no brokered activity.

What a week for news!

In the US, special counsel Robert Mueller published a report about his investigation into Russian involvement in the 2016 US presidential election, effectively accusing president Donald Trump of obstructing justice by witness tampering. There will be fallout from this.

Meanwhile, jobless claims in the US fell for the third week in a row to their lowest level in 50 years, boosting the stock market and US dollar index to the detriment of gold.

In Peru, former two-time president Alan García shot himself in his home as police sought to arrest him on charges of taking bribes from Brazilian company Odebrecht during his presidency. Garcia later died of his wounds and left a letter stating he never took bribes and that he would not have received a fair process as he was a victim of political interests.

In China, there are signs of increasing industrial activity as Beijing’s stimulus program appears to be filtering through to the real economy. China's GDP grew at 6.4% in the first quarter compared to last year. Industrial value-added production figures jumped from 5.3% year-on-year in February to 8.5% in March, while fixed investment accelerated to 6.3% and new construction starts came in 18% higher than March last year.

And the Notre Dame cathedral in Paris, France went up in flames, losing its roof and spire in the process, although the structure of the building was saved. Over US$1 billion has subsequently been pledged for tis reconstruction.

 

Gold had a volatile week, surging higher only to suffer deflation to return more-or-less to where it started after suffering a 1.5% drap on Thursday as US consumer prices increased by a seasonally adjusted 0.4% in March, slightly higher than forecast. Analysts expect a recovery in the week ahead as the US Dollar Index weakened.

On the political front, the US and China are still engaged in trade talks although an outcome still seems uncertain in terms of both timing and content.

The European Union (EU) gave the UK an extension until October to decide how or if it wants to leave the block. There is growing pressure in the opposition Labour Party to back a second referendum and make it a part of its official policy going forward rather than just an option.

On to the money: total fund raises announced increased to C$80.8 million, a five-week high, that included no brokered financings and no bought-deal financings. The average offer size increased again to C$2.1 million, a five-week high, whilst the number of financings jumped to 38, a nine-week high.

Another losing week for gold as it closed down at US$1,275/of from US$1,290/oz a week ago. The yellow metal is down 0.54% so far this year. The US dollar index returned to growth as it closed up at 97.37 from 96.97 last week. The van Eck managed GDXJ closed down again at US$29.57 from US$31.13 a week ago. The index is now down 2.15% so far in 2019. The US Global Go Gold ETF also lost more ground as it closed down at US$12.03 from US$12.64 last week. It is up 5.43% so far in 2019. The HUI Arca Gold BUGS Index closed down at 160.42 from 168.27 last week. The SPDR GLD ETF continued to sell off as its inventory closed down at 751.68 tonnes from 757.85 tonnes a week ago. It was last at these inventory levels in October 2018.

In other commodities, silver climber back above the US$15/oz level as it closed up at US$15.03 from US$14.97/oz a week ago. Copper shed a couple of cents as it closed down at US$2.92/lb from US$2.94/lb a week ago. Oil continued to see growth as WTI closed up at US$64.00 a barrel from US$63.89 a barrel a week ago.

The Dow Jones Industrial Average returned to growth as it closed up at 26,559 from 26,412 last week. Canada’s S&P/TSX Composite Index closed down at 16,612 from 16,480 the previous week. The S&P/TSX Venture Composite Index closed down again at 609.21 from 625.64 last week.

Summary

·       Number of financings increased to 38, a nine-week high.

·       No brokered financings were announced this week, a six-week low.

·       No bought-deal financings were announced this week, a six-week low.

·       Total dollars increased to C$80.8m, a five-week high.

·       Average offer increased to C$2.1m, a five-week high.

 

                                                          

Financing Highlights

Thor Explorations (TSXV:THX) executed an agreed term sheet with the Africa Finance Corporation (AFC) for a US$78 million financing package for the construction and ramp-up of its Segilola gold project in Nigeria.

·       $54 million senior secured credit facility, a $9 million gold stream prepayment and a $15 million equity investment.

·       Equity placement of 99.8 million shares @ C$0.20 for C$19.95 million.

·       First production targeted within 18 months. For Thor to be fully funded to production, it will seek to raise an additional of $18m from debt or equity.

 

Major Financing Openings

·       Thor Explorations (TSXV:THX) opened a C$19.95 million offering on a strategic deal basis.

·       TomaGold (TSXV:LOT) opened an C$8.0 million offering on a best efforts basis.   

·       Triumph Gold (TSXV:TIG) opened a C$5.95 million offering on a best efforts basis. 

 

Major Financing Closings

·       Maritime Resources (TSXV:MAE) closed a C$6.06 million offering on a best efforts basis.

·       Midland Exploration (TSXV:MD) closed a C$5.85 million offering on a strategic deal basis.

·       Tethyan Resources (TSXV:TETH) closed a C$5.0 million offering underwritten by a syndicate led by TD Securities on a best efforts basis.

·       Western Uranium & Vanadium (CSE:WUC) closed a C$3.84 million offering on a best efforts basis.

 

Company News

Aura Resources (TSXV:AUU) completed the sale of an 80% interest in its East Taviche project in Oaxaca, Mexico to Minaurum Gold.

·       Payment of 100,000 shares in Minaurum and re-imbursement of US$39,452 in project concession plus an additional 100,000 shares upon receipt of all relevant approvals to start exploration and drilling.

·       Aura’s 20% interest is free-carried.

·       Minaurum granted an option to acquire the remaining 20% for C$1.0 million.

Analysis

Aura started working at Taviche in 2006 and has operated it since 2010. It holds potential for the further discovery of silver and gold along the prospective Mezcal structure. The transaction assures that exploration will continue allowing Aura to realize value for its investment in the project and to focus on new opportunities.

 

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