ORENINC INDEX down as market sees bounce

ORENINC INDEX - Monday, August 27th 2018

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Last week index score: 57.95 (updated)

This week: 44.35

Zinc One Resources (TSXV:Z) announced results from the last 27 drill holes of the Mina Grande Sur zone at its Bongará zinc mine in north-central Peru.

The Oreninc Index fell in the week ending August 24th, 2018 as it pulled back to 44.35 from an updated 57.95 a week ago as the market continues to see some bounce as the summer draws to a close and Labor Day approaches.

Gold showed the initial signs of a fight-back at the week closed to move above the US$1,200/oz level as US Federal Reserve chairman Jerome Powell, speaking in Jackson Hole Wyoming at its annual policy symposium, reiterated its intention to continue with interest rate increases whilst the US economy continues at very strong levels. “The economy is strong. Inflation is near our 2% objective, and most people who want a job are finding one,” he said in his speech.

Gold market observers are starting to postulate that a market bottom has now been reached as the yellow metal trades at its lowest value relative to S&P 500 Index futures since the start of the global financial crisis in 2007/2008 and the CFTC's weekly Commitment of Traders data show that investors (non-commercial traders) are short 670 metric tonnes, the largest bearish position in 25 years.

On to the money: total fund raises announced rose to C$39.8 million, a five-week high, which included two brokered financings, a five-week high, and no bought deal financings. The average offer size rose to C$2.4 million, a six-week low, whilst the number of financings decreased to 16, a one-week low.

Gold climbed back over the US$1,200/oz level to close out the week at US$1,205/oz from US$1,184/oz a week ago. It is now down 7.48% this year. The US dollar index eased off to close down at 95.14 from at 96.13 last week. The van Eck managed GDXJ started staging a recovery to close up at US$28.21 from US$26.81 a week ago. The index is down 17.35% so far in 2018. The US Global Go Gold ETF also began staging a recovery to close up at US$10.89 from US$10.75 a week ago. It is now down 16.33% so far in 2018. The HUI Arca Gold BUGS Index closed up at 146.81 from 142.43 last week. Despite all these increases, the SPDR GLD ETF continued in sell mode with its inventory closing down at 746.58 tonnes from 772.24 tonnes a week ago.

In other commodities, silver continued below the US$15/oz mark although closing slightly up at US$14.82/oz from US$14.80/oz a week ago. With threat of a strike at Escondida in Chile, the world’s largest copper mine, averted, the red metal put on some cents to close up at U$2.72/lb from US$2.64/lb last week. Oil also returned to growth as it closed up at US$68.72 a barrel from US$65.91 a barrel a week ago.

The Dow Jones Industrial Average saw the tiniest growth to close up at 25,790 from 25,669 last week. Canada’s S&P/TSX Composite Index also returned to growth as it closed up at 16,356 from 16,323 the previous week. The S&P/TSX Venture Composite Index put in some strong growth to close up at 711.37 from 678.01 last week.

Summary:

·       Number of financings decreased to 16, a one-week low.

·       Two brokered financings were announced this week, a five-week high.

·       No bought-deal financing was announced this week, a ten-week low.

·       Total dollars increased to C$39.8m, a five-week high.

·       Average offer size rose to C$2.4 m, a six-week high.

 

 

Financing Highlights

Regulus Resources (TSXV:REG) announced a private placement on a best efforts basis to raise C$20.1 million.

·       Syndicate led by Canaccord Genuity and including PI Financial and Haywood Securities.

·       10.6 million shares and no warrant @ C$1.90

·       Route One Investment Company intends to participate for 7.0 million shares. Route One currently owns or exercises control over 14.1 million shares, representing about 18% of the stock.

·       The offering is expected to close before the end of September and prior to the closing of the proposed plan of arrangement among Regulus, Sibanye Gold and Aldebaran Resources.

·       Regulus will use the net proceeds for exploration on its AntaKori copper-gold-silver project in Peru.

 

Osisko Mining (TSX:OSK) announced a two- tranche bought deal private placement with tranche 1 consisting of 14.0 million flow-through shares @ C$2.85 for aggregate gross proceeds of about C$40 million. Tranche 2 will consist of 12.1 million flow-through shares @ C$2.30 for aggregate gross proceeds of about C$28 million. This was subsequently increased by 2.6 million shares @ C$1.70 for additional gross proceeds of about C$4.5 million.

 

Major Financing Openings

·       Regulus Resources (TSXV:REG) opened a C$ 20.14 million offering underwritten by a syndicate led by Canaccord Genuity on a best efforts basis. The deal is expected to close on or about September 21st.

·       Osisko Metals (TSXV:OM) opened a C$ 10 million offering underwritten by a syndicate led by Industrial Alliance Securities on a best efforts basis. The deal is expected to close on or about September 12th.

·       Klondike Silver (TSXV:KS) opened a C$ 1.75 million offering on a best efforts basis. Each unit includes a warrant that expires in two-and-a-half years.

·       Auxico Resources Canada (TSXV:AUAG) opened a C$ 1.5 million offering on a best efforts basis. Each unit includes half a warrant that expires in two years.

 

Major Financing Closings

·       Silver Bull Resources (TSX:SVB) closed a C$ 5.02 million offering on a best efforts basis. Each unit includes half a warrant that expires in two years.

·       Aben Resources (TSXV:ABN) closed a C$ 4.28 million offering on a best efforts basis. Each unit includes a warrant that expires in two years.

·       HPQ-Silicon Resources (TSXV:HPQ) closed a C$ 1.95 million offering on a best efforts basis. Each unit includes a warrant that expires in three years.

·       Tethyan Resources (TSXV:TETH) closed a C$ 1.5 million offering on a best efforts basis.

 

Company News

Zinc One Resources (TSXV:Z) announced results from the last 27 drill holes of the Mina Grande Sur zone at its Bongará zinc mine in north-central Peru.

·       95 holes for 2,328m have been drilled at Mina Grande Sur.

·       Noteworthy intercepts included 18.0m @ 36.0% Zn.

Analysis

Drilling at Mina Grande Sur has delineated near-surface, zinc-oxide mineralization over 350m in a north-south direction and up to 200m in an east-west direction. The success of this drill program is expected to contribute to the resource estimate of the project, with a resource update expected in 4Q18.